Waitomo News : NKC Farmer September 2014
Tuesday, September 9, 2014 5 OTOROHANGA P: Degan 021 285 1635 or 07 873 8196 TAUMARUNUI P: Ian 027 446 4849 or 07 895 7994 Agrofarm 115G with FEL FINANCE 1.95% FOR 36 MONTHS Agrolux 4.8 with FEL $46,990 ONLY $89,990 ONLY *CONDITIONS APPLY Benson Road, Te Awamutu | P 07 870 2411 | www.powerfarming.co.nz Te Awamutu Murray Barclay 027 475 3690 • A/H 07 872 1964 | Mike Whitburn 027 482 4614 THE General Election has suddenly sparked into life. It was not a policy, a pratfall or a stunt, but Shanghai Pengxin Group’s Overseas Investment Office (OIO) application to buy Taupo’s Lochinver Station. While Federated Farmers has taken the principled position of trying to learn what the ‘substantial and identifiable benefit’ to New Zealand is of this proposed sale, others have gone off the proverbial deep end. But everyone seems to have forgotten process. Our overseas investment rules are meant to operate on fair play under the guise of the OIO. Instead, it has turned into an election political circus. The coverage of which, has gone global, given the media who have contacted me. WemustbewarynottobeseenasNZ closing itself to the world. We invest in other countries so it would not be in our interests to spark a backlash. BENEFITS NZ has done extremely well from a prin- cipled negotiation of free trade agreements, like the China free trade agreement. Still, we need to understand what the substantial and identifiable benefit to NZ of Lochinver’s sale, over and above what a New Zealander could do in buying this station. There could be economic opportunities for NZ businesses, like winning direct consumer reach into an overseas market. In other cases, it could be opening up a property to the public or significant invest- ment into one that has become rundown. Such as music producer Rob- ert ‘Mutt’ Lange’s 53,000 hect- are gift to the Queen Elizabeth II National Trust. There must be a payback because foreign investment is a two-way street. TEST OF RULES Federated Farmers is not saying the sale should not go ahead, but this is a test for OIO rules tightened in 2010. An “economic interests” factor allows ministers to consider whether NZ’s economic interests are adequately “safeguarded and promoted” in the case of land aggregation or vertical integration. Land aggregation is where land is as- sembled into a strategic parcel. The trigger level is 10 times what the average farm size is and Lochinver’s pro- posed sale breaches that trigger point by a factor of three. This is why the OIO needs to have a good look at the proposed sale to see if there are real and tangible benefits that come to NZ from its sale. Quality farmland is, after all, a finite commodity. There is also that vertical in- tegration test because a search of Shanghai Pengxin shows interest in processing. Shanghai Pengxin, in its purchase of the Crafar Farms, undertook not to build process- ing unless it was 50% owned by a NZ entity. Yet owning the supermar- kets, logistics, processing through to farms is vertical integration. This risk greatly reduces the value to NZ since half of what local dairy farmers get paid is spent locally in their community. That said, we need to acknowledge a big proportion of overseas buyers migrate here to live and farm. Take my vice-president, Anders Crofoot and his family, who hail from upstate New York. Given NZ’s farm system is the world’s best we attract the best farmers from around the globe. It would be catastrophic to shut the gate to them. We also need to realise that not only do companies come back into NZ ownership, but sheep stations too, like Lillybank in South Canterbury. If individual farms are sold it does not mean they are gone forever, but where there is land aggregation, that potentially becomes a different story. AGGREGATION Federated Farmers is not in any way opposed to overseas investment in our farm- land, but Lochinver is potentially a question of land aggregation. We must take land aggregation and verti- cal integration seriously as we have a finite amount of land. We must also do what is best for NZ and ill conceived tit-for-tat policies based on weak statistics or emotion do us no good. This is why we need a national register of farmland. For as land aggregation increases, so must the level of scrutiny. The process of foreign ownership By William Rolleston President Federated Farmers Food prices down FOOD prices fell 0.7% in July, according to Statistics NZ’s monthly Food Price Index. Meat, poultry, and fish prices were down 2.2%; fruit and vegetable prices fell 0.9% and grocer y food prices were down 0.7%. On an annual basis food prices decreased 0.1%, mainly due to lower prices for fruit and vegetables, down 5.9%, while prices were up for meat, poultry and fish, up 0.5% and grocery food, up 0.2%.
4 September 2014
11 August 2014