What to do with the Crafar Farms?
JOHN HARTEVELTWill the wretched Crafar Farms question whack the political stuffing out of John Key's new year?
It seems likely that Cabinet ministers are - if only informally - today chewing over the recommendation of the Overseas Investment Office on a bid by the Chinese Government-backed Shanghai Pengxin outfit.
If, as also seems likely, the OIO has finally approved the Pengxin bid, it will be tough for approving ministers to toss it out. Which leaves John Key in rather a tight spot.
There remains a strong sentiment against the sale of large tracts of farmland to foreign buyers, something Key has made no effort to discourage. In fact, he has stoked it, with one of his most frequently repeated lines as PM that he would not want New Zealanders to become tenants in their own land. If the Pengxin bid is as reported - that the farms would be leased back to state-owned Landcorp - then that is precisely the scenario that would play out.
And yet, the National-led Government has given foreign investment laws the once over and made no small issue of beefing them up. If Pengxin's tilt at the farms meets all the tests - or even exceeds them - where would Key and his responsible ministers find wiggle room to knock them back? Worse still, how would he explain such a transparently political decision tied fast back to him to the top tiers of the Chinese leadership? He finds it awkward enough tackling problems with China's human rights record. Talking his way out of this one in Beijing later this year - on the occasion of the 40th anniversary of diplomatic relations between the two countries, no less - would surely be beyond him.
The only thing for it, it seems, is to accept.
Besides anything else, the Crafar Farms saga has stretched on for too long. The 22 farms straddling 10,000-odd hectares with something like 20,000 cows have been in receivership since October 2009. A clutch of banks were owed $200 million, most of which they presumably still have not seen. Vets and feed suppliers were also owed cash by the farms. About 200 people were employed by the farms, which had also been the subject of an investigation over animal cruelty days before they went into receivership.
The OIO has already considered and biffed out the vexed Hong Kong-based Natural Dairy Holdings bid for the farms. And though it aims for 50 working days as a deadline for its decisions, Pengxin's bid was filed in April and has apparently only recently landed on Beehive desks. More than two years in receivership is too long.
If most New Zealanders cannot agree that foreign ownership of the Crafar Farms under almost any circumstances is acceptable and the Government is not prepared to challenge that view, then it simply must take yet another look at its rules. It can't overlook what is already on its books, especially since they were so recently updated.
As it stands, Key's only way out of this may be to accept and then promise another look at the rules. Any other ideas ...?
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Given the massive animal cruelty that has occurred here, seize it and retain it in public ownership, ideally to explore more ethical export market production options than dairy, i.e. micromanaged crop production.
NO land in NZ should be able to be purchased by foreign owners. If the dairy industry is our nations biggest earner, then why are we even considering selling the very resource the dairy industry needs most. If we can bale out a bunch of personal investers to the tune of 1.7 billion then surely we, NZers, can scrape up 200 million to secure a future earner for ourselves. Any Kiwis out there want to go shares in a farm? We need to get rid of the OIO. Money wasted on something that should not be happening. If foreign investment is a must, then lease them the land. And giving NZ citizenship to any clown with a few million in the bank has got to stop too.
As I understand it foreigners cannot own land in China? If that is so then reciprocal rights seem perfectly fair.
Did sir h have same issues in chile buying farms just before fontrear took a controlling stake.. Perhaps he can give some tips to the oio
I agree with GE #3 on this. There IS another option here - sell to the local buyers who have made an offer (albeit slightly lower). NZ is far too slack on this issue and there are many countries around the world ('first-world' included - try buying land in Europe) with much tighter rules. If we have the money here - which we do - why sell this land? The OIA rules need to be greatly tightened. This should not at all be seen as anti-Chinese - in fact the majority of land buying in NZ is by developed countries - but rather giving the local guys a chance.
No foreign ownership of land thank you Mr Key.
The OIO's process is couched in secrecy and it should not be because the OIO has govt appropriation of $2.6 in 2010/2011 and it goes up to $2.8 in 2011/2012. If govt is paying for the OIO to process applications, then there must be transparency as we as taxpayers have the right to know how they process the applications. I agree that it's time to get rid of the OIO as they are inefficient and ineffective - 9 months to make a recommendation when in fact they had considered similar information about the Crafar Farms as they had previously declined Natural Dairy's application to acquire the farms. The only difference in information would be how Pengxin intends to farm the properties and that should not have taken 9 months to do!!!!! Yes - time to say bye bye to the OIO - they serve no real purpose at all when public sector cuts are required. These people are not worth the public service salaries they are earning.
The Government has already shown that it will do as it pleases in relation to asset sales. They will take no notice and do as they please, I totally agree with MikeC #4. If this land gowes to the Chinese, there will be no local jobs created and produce grown here will be sent overseas. New Zealand land and assets should remain in New Zealand hands, not to foreign ownership who will only rape our land. KEEP NEW ZEALAND CLEAN & GREEN
Just another asset sale in drag
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I think it's very simple. As long as foreign owners don't have free access to Chinese markets, they shouldn't have it to ours. Is a foreign owner can't own 100% of a business in China why should they here. Our free trade deal with China was off the scale in their favour, which although understandable we now see NZ did have more to bargain with.