Assessing New Zealand’s food security

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Epoch Times | 7 May 2012 
Fresh produce, fruit and vegetables are sold at the Wesley Market in Mt Roskill on Sept. 2, 2011, in Auckland, New Zealand. (Photo: Phil Walter/Getty Images)

By Diane Cordemans

New Zealand is one of many countries upon whom China’s entrepreneurs have cast their eyes for opportunities to buy farmland, mineral and power resources to shore up China’s looming food shortage and resource-hungry economy.

Former Waikato University vice chancellor and British Member of Parliament Bryan Gould says that part of the Chinese government-led strategy is to use its vast foreign exchange reserves to purchase “productive capacity” worldwide.
“Their interest in our dairy land is just a part of that strategy and is entirely consistent with it,” he said.

Mr Gould who visits China frequently commends the Chinese for the “far-sighted strategic view they take of their own interests.”

He says that his views, far from being a criticism, should be regarded as a plea that New Zealand be equally hard-headed in its own interest.

Widespread pollution, decreasing arable land, water shortages, as well as increased consumption of meat and dairy products by China’s burgeoning middle-class has propelled Chinese conglomerates and agribusinesses into acquiring land and production lines overseas.

Last month, the government signed off on the sale of 8,000 hectares comprising 16 North Island Crafar dairy farms, after Chinese conglomerate Shanghai Pengxin’s bid received the green flag from the Overseas Investment Office(OIO).

Over the last two years consent has been given for the sale of 357,056 hectares of farmland to overseas buyers. With the exception of a Hong Kong buyer [759 hectares], this is the first sale in the last two years of agricultural land to a buyer from mainland China.

324 applications by overseas buyers to buy freehold land were accepted and only eight were declined.

Overseas Investment Office (OIO) records show that from January 2009 to December 2011, 324 applications by overseas buyers to buy freehold land were accepted and only eight were declined.

Green Party co-leader, Russell Norman says the large scale purchase of “productive farmland by overseas buyers is not in New Zealand’s long term strategic economic interest.”

“Food producing farmland with access to water is an increasingly valuable resource in a finite world with growing population and declining water resources,” said Mr Norman in a media release last month.

Chinese government officials had warned that rejecting the bid would affect future overseas investment in New Zealand, he said.

The precedent set by the OIO will make it easier for Chinese companies to make future large scale investments in New Zealand farmland, said Mr Norman.

However, Mr Gould says that China’s strategy entails more than just buying and importing New Zealand dairy products.

“They aim to own and control a significant part of our dairying capacity, in effect integrating it into the Chinese economy on a more or less permanent basis.

“Chinese companies are often not just commercial entities … they are often fronts for the Chinese government or are obliged to act in the government’s interests.”
 
The OIO guidelines do not permit taking these issues into account when reviewing applications to buy property, says Gould. The permanent loss of a strategic industry is not considered.

The FTA would probably prevent foreign investors from being treated any different from New Zealand investors, even though China itself does not allow foreign ownership of land, says Mr Gould.

“To point out these matters is not … xenophobic; it’s simply a plea that we should be very clear about what we are doing when we approve such sales.”

Minister of Trade, Tim Groser, said that it was “inconceivable” that the expanding trade links between New Zealand and China would not be accompanied by a huge increase in investment by China into New Zealand.

“It won’t just be China. Get ready for significant investments from India and Indonesia,” Mr Groser added in a news release last March.

New Zealand is not the only country faced with global economic expansionism.

A 2011 World Bank report, Rising Global Interest in Farmland, names China, as well as the Gulf States, Russia, United Kingdom and the United States as countries participating in the “land rush”—large scale land acquisition worldwide.

Australian farmland properties have been “going under the hammer on a weekly basis” and sold to Chinese interests, among other foreign buyers, highlighted Yahoo New’s Today Tonight earlier this year.

New South Wales Snowy Mountain farmer Richard Bennett, said a large neighbouring farm, Biggam, had been bought by a branch of China’s giant Nanshan Group

“You’d be naive and unworldly if you weren’t worried about it. They [the government] don’t know who owns what, and how much,” a nervous Mr Bennett told Today Tonight.

Mr Bennett asked how prices would fare and if Australians would have to “fight for the crumbs” if too much of their product headed overseas.

Robert Belcher, managing director of Sustainable Agricultural Communities of Australia told the news outlet, “If that produce was to go straight from Biggam to China, well there’s no necessity for Australians to have much employment at all.

“Basically it just becomes part of China, even though it’s in Australia, it’s just part of China,” he said.

However, many countries, including Brazil, Iceland, the Philippines and Argentina, have taken steps to limit attempts by China and other countries to acquire land following local opposition.

Last year, Chinese millionaire and former government official, Huang Nubo failed in attempt to buy 300 sq. km of land in north eastern Iceland.

In testimony, before the United States-China Economic and Security Review Commission (January 2012) that looked at China’s pursuit for resources and its impact on the U.S., it was noted that China’s quest had seen millions of Chinese workers and thousands of enterprises locating in every corner of the globe.

It cited the failure of Chinese businesses to lease one million hectares of farmland to grow soybeans in Kazakhstan following local protests. An attempt to lease almost 3 million acres in the Philippines also failed after widespread opposition.

Attempts to lease or buy huge tracts of land in South America have led some states to adapt laws to prevent a “Chinese land grab.”

China’s largest farming company, Beidahuang Groups was seeking leasehold and development rights for 300,000 hectares of land in Patagonia, Argentina.

In the report, Nobel Prize winner Dr Raul Montenegro writes, “On a global level, China is the country most affected by the extension, intensity and economic impact of land degradation. So it is difficult to believe that they won’t make the same mistakes with their land in Rio Negro as they have in their own country.”

A 20 per cent cap has been placed by the Argentinian government on the total amount of land available for foreign buyers with a limit of 1,000 hectare limited per buyer.

Outrage at Chinese Company’s Land Purchase

In Brazil, the government is looking at formal measures that would stop China from buying land.

The report quotes former Trade Minister and current president of the China-Brazil Business Council who sums up Brazil’s concerns. “Sometimes you don’t know whether the investors are looking for Brazil as a market or whether they correspond to strategic purposes of the Chinese government.”
Original source: Epoch Times
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