By Neal Wallace
Calls for an overhaul of rules governing foreign ownership of farm land increased yesterday, coinciding with the Chinese-backed company lodging an application to buy 16 North Island dairy farms with the Overseas Investment Office.
Prime Minister John Key, a leading agricultural academic, the Property Council of New Zealand, the Council of Trade Unions and the Green Party have all questioned the laws governing foreign ownership of New Zealand land or called for them be overhauled in light of Hong Kong-backed Natural Dairy's bid to buy the Crafar family's dairy farms from receivers.
Property council chief executive Connal Townsend said debate over ownership of the Crafar farms "appeared to have tapped a racist vein", and he urged Parliament to address foreign ownership rules.
Natural Dairy (NZ) Holdings has told the Overseas Investment Office its investment in the Crafar farms would boost New Zealand exports by $100 million and result in further investment of $30 million.
A statement released by Natural Dairy vice-chairman Graham Chin said the investment would secure the existing 32 jobs and create a further 92.
It also planned to create a fund of up to $5 million a year to create additional opportunities for sharemilking.
State-owned enterprise Landcorp said on Monday it planned to bid for the farms, a move that has the support of Mr Key, who told NZPA he did not want New Zealanders to become tenants to foreign company owned-farms.
The Government may look at changing foreign ownership rules.
"As a general and broader principle, I think New Zealanders should be concerned if we sell huge tracts of our productive land.
"Now, that's a challenging issue given the state of the current law and quite clearly it's evidentially possible and has been achieved that individual farms can be sold.
Looking four, five, 10 years into the future, I'd hate to see New Zealanders as tenants in their own country and that is a risk, I think, if we sell out our entire productive base, so that's something the Government will have to consider," Mr Key said.
Lincoln University's head of farm management and agribusiness, Keith Woodford, said the process of assessing land purchases by overseas investors was ad hoc and he questioned why the Overseas Investment Office decided applications rather than laws.
"There should be laws people have to follow rather than having to convince someone at the Overseas Investment Office."
Prof Woodford said such laws must treat all foreign investors the same regardless of which country they came from.
He did not think comments by Mr Key about the undesirability of foreign ownership of farm land was in conflict with the New Zealand-China free-trade agreement, as virtually every country had land ownership restrictions.
In China, all land was owned by the State and foreigners were only allowed to lease land, as Fonterra does with its 35ha Tangshan demonstration farm established in 2007.Mr Townsend said allowing foreign investors to only lease land as suggested by Green co-leader Russel Norman would send a message that New Zealand was "off-limits to much needed capital".