Overseas shopping a hot election issue
The overseas ownership debate has been reignited by revelations that Chinese-owned Shanghai Pengxin Group has made an application to the Overseas Investment Office to buy Lochinver Station to add to the Crafar farms it bought in 2012.
The timing of these revelations has made this a hot election issue, but election or not the conversation of foreign ownership is one that has the country divided.
In my opinion, it is about the big picture; you can't make more land. This is what we have - no more no less, and we need to navigate foreign sales of this precious resource very carefully. It is a common complaint amongst New Zealand farmers, especially the young ones, that the ability to own your own farm is threatened by the corporatisation of farms.
Given the location of Shanghai Pengxin's other landholdings to Lochinver Station, it only increases the foreboding feeling they have.
Don't get me wrong I am not totally against foreign ownership in farmland; we have many success stories of foreigners buying or investing in our farms, immigrating and adding value to the country.
What I am not thrilled about is the uncertainty surrounding the corporate model of farm sales that is pricing our young New Zealand farmers out of the market.
If the Lochinver station was broken up into a few smaller farms, young Kiwi farmers could afford to pay top dollar for it. Whilst this may not be practical for every farming operation it is worth considering for some farms. It's only natural that the seller wants the highest price, but inflated prices make the dream for farmers to buy their first farm that little bit harder. A dream that farmer who is selling the farm had and was fortunate to fulfil.
It does bring in the question of the individual's property rights and being able to sell to whomever they like, and fair call, but this is where the Overseas Investment Office (OIO) comes in. For as long as I can remember it has never been completely up to the landowner to whom they sell their land to overseas concerns. There are certain requirements that need to be met to safeguard our most precious asset, but does this need to be reviewed?
There seems to be an information vacuum around foreign ownership in New Zealand. Before 1998 there is little information on the level of overseas ownership in New Zealand. They record only approvals but not all approvals complete, so data may overstate what the real position is.
Back to the big picture, getting a key policy wrong like foreign investment could have major economic ramifications affecting all New Zealanders.
There is tens of thousands of hectares of farmland each year sold to overseas buyers without, in my opinion, a visual benefit to New Zealand.
I would be interested to see how the OIO determines the benefits that Shanghai Pengxin will bring to New Zealand's economy. It feels that the vendors and the agents are merely going through the motions knowing full well that the only real contenders are foreign corporates or celebrities.
Whilst New Zealanders may not be prepared to pay the asking price, we must be careful of the potential for overseas corporates to undercut us in our own market by farming and processing their own product directly back to their own country. These overseas buyers have a lot more money to spend on environmental upgrades such as the foreign investors who created the largest ever private land protection agreement at 53,000 hectares; which now covers the iconic high country over most of Motatapu, Mount Soho, Glencoe and Coronet Peak stations.
Farmland is a limited commodity so it is vital to exhaust every other option before selling to overseas buyers and making sure we are the direct benefactors when we do.
The Crafar farms deal saw a lost opportunity for New Zealand farmers and iwi to continue the family farming tradition that is becoming increasingly difficult to achieve.
It would be great to have confidence in the OIO investment model and see the direct benefits that we are receiving as consolation. We are fortunate that to date we have had a great success rate in foreigners buying farms and adding to the farming community, such as our current board member Anders Crofoot and past dairy chairman Willy Leferink.
May the positive trend and attitude continue.
* Chris Lewis is the president of Federated Farmers Waikato.