NZ debates China's agricultural appetite
Wall Street Journal | 12 June 2012
FOREIGN ownership of farm land is a sensitive issue in Australia and "across the ditch" in New Zealand.
Debate over whether to sell the farm to investors from hungry but wealthy regions such as Asia and the Middle East will take center stage at the largest agricultural show held in southern hemisphere this week in Hamilton on New Zealand’s North Island.
The sale of Crafar Farms, a block of 16 dairy and drystock farms, to Chinese bidders Shanghai Pengxin this year has polarised the issue of foreign ownership in New Zealand in a way not seen since the Treaty of Waitangi signed in 1840 between the local Maori population and the European settlers. The government has twice approved the sale of Crafar Farms to the Chinese bidders, but the transfer of ownership has again been held up after a new appeal was filed to block the deal.
There is a “huge” concern about the possibility of changing landholding patterns in New Zealand, said Jacqueline Rowarth, professor at Waikato University who chairs some of the seminars of foreign ownership that are planned during the National Agricultural Fieldays show that starts tomorrow.
“There was quite an uproar about the sale of Crafar farms, though it hasn’t gone through yet,” said Ms Rowarth.
Farm land owned by foreigners is just a small portion of the total area available for agriculture in New Zealand. Federated Farmers, a leading independent rural advocacy organisation, estimates that only 1.3 per cent of dairy land was owned by foreigners. Many New Zealanders remained bitterly opposed to sale of farm lands to foreigners as the locals fear the possibility of becoming a tenant in their own land as cash-rich foreigners could outbid them.
“We don’t support blocking foreign ownership, given that there are pretty stringent rules in place through the Overseas Investment Office, but the caveat on that is whether there is large land aggregation of strategic value or vertical integration along with land aggregation, which we see as an issue,” said William Rolleston, vice-president of Federated Farmers.
National Agricultural Fieldays will attempt to look at the future of different types of farm land ownership, challenges and rewards as farming activity shifts from being predominantly just about food production to being a full-fledged end-to-end business activity spreading across several foreign markets amid fluctuating demand patterns and complicated global currency movements.
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Source: Wall Street Journal