web analytics

Stopping the sale of agricultural land and agri-business

Written By: - Date published: 7:30 am, July 29th, 2016 - 26 comments
Categories: australian politics, capitalism, Economy, farming, International, overseas investment, Privatisation - Tags:

I often think we let ownership of Silver Fern Farms go to foreigners too quickly.

Australia now has new rules specifically for regulating the sale of agricultural land and agri-business.

Last year, the S. Kidman and Co property portfolio, Australia’s largest private landholding, went up for sale. That was 100,000 square kilometres, roughly. It went across four states. One of the farms, Anna Creek, is the world’s largest cattle farm.

Treasurer Scott Morrison blocked the 100% sale, saying: “… it would be contrary to Australia’s national interest for a foreign person to acquire S. Kidman and Co in its current form.” The size was of concern, and the form of the transaction was as well.

Despite a whole new consortium deal in which a Chinese-owned firm had 80% and an Australian firm had 20%, in April 2016 the Australian Treasurer still blocked it. Perhaps the decision had something to do with the July Federal election, who knows.

Some uncertainties came out of it. For example, the Treasurer got the ACCC in to make sure Australian bidders had a real chance. In future that will leave open to political judgement when the locals were simply outbid, or poorly structured, or simply didn’t get themselves together in time.

The Treasurer also stated in his decision how important it was that the Australian public maintained confidence in government regulation of foreign investment, and in foreign investment full stop. That’s new.

So now the Australian Federal Government has come up with some much clearer rules about how much agricultural land, and agricultural business, foreigners can actually buy. Their Foreign Investment Review Board now has much clearer triggers for both.

The national interest test that Australia uses is deliberately vague. This gives the Australian government flexibility to block sales or impose conditions. The Kidman example highlights that clearly.

It’s also illogical that the FIRB rules don’t apply to state or territory assets like ports or airports. There should be equal accountability between public and private asset vendors.

But the rules are much clearer. New Zealand could take lessons. We need a complete overhaul of how all kinds of agricultural land and agribusiness are considered to be sold to foreigners of any kind. We need to favour locals over foreigners.

Both Christchurch and Auckland Councils will be under renewed pressure to sell assets. Dairy farms will come under pressure to sell due to the long dairy commodity bust. More foreign-owned dairy factories will set up in our fields and literally cream it.

New Zealand needs a stronger set of rules to stop our best land and agribusiness being sold off to foreigners.

26 comments on “Stopping the sale of agricultural land and agri-business ”

  1. srylands 2

    This is complete bullshit.

    New Zealand should abolish the FDI restrictions already in place.

    New Zealand should be neutral between overseas and domestic investors. We should be strongly advocating all countries to do the same.

    If you don’t want FDI you had better all start saving and investing more. I don’t see that happening.

    Apart from the lack of any economic justification for FDI restrictions, the tenor of this article is that you think it is fine to interfere with private property rights.

    • Ad 2.1

      Check out the new Australian rules in the link and see what you think.

      If you think there is no reason for restricting foreign direct investment into agricultural land and agricultural businesses, I think you’re at a fairly extreme end of the spectrum in this debate. The current government have stopped a couple of big ones themselves.

      What are your reasons for having no restrictions on FDI?

      • srylands 2.1.1

        There is no downside to FDI. I suggest you read the “Open for Business” series by the New Zealand Initiative. It concludes that the current New Zealand regime is far too restrictive. Sorry can’t post link. Google it.

        • Robert Guyton 2.1.1.1

          ” I suggest you read the “Open for Business” series by the New Zealand Initiative.”

          I see a red light.

        • DH 2.1.1.2

          “There is no downside to FDI.”

          Now THAT is bullshit. FDI creates an increased demand for finite land and resources, an increase which can only result in higher prices for the land. A higher price for productive land translates directly into a higher cost of production which in turn makes NZ less competitive in world markets.

          One of NZs major competitive advantages in the primary industries is our low population density and permitting foreigners to freely buy our land negates that advantage. IMO it’s tantamount to economic sabotage.

        • One Anonymous Bloke 2.1.1.3

          The Business Roundtable has no credibility, which is why they had to change their name, and they still have no credibility. The main problem is that none of the policies they promote have ever led to the outcomes they assert anywhere they’ve been tried in the world, ever.

          In fact the opposite is true: if you want increased morbidity on a steeper social gradient, they’ve got that covered.

          Is a partisan pack of proven failure the best you can do? Sad. Still, it explains your continued employment: sophistry costs money.

        • Draco T Bastard 2.1.1.4

          There is always a downside to FDI and that’s mostly in that our wealth is taken from us for magic beans.

    • Stuart Munro 2.2

      Nope – NZ should drive foreign investors into the sea and take our country back.

    • Draco T Bastard 2.3

      Why do we need foreign money to utilise our own resources?

  2. adam 3

    Thanks for the post Advantage.

    What has always confuses me on this. But, why invest in someplace you don’t want to live in? Is the place you live not worth your time, effort and money? Would it not be better to invest into your people and place to produce a fulsome outcome for all?

    • Ad 3.1

      Indeed.
      But capitalism needs land, and more and more of it, so it goes and searches the world for the land it needs. Agri-business in particular needs lots of land, because extensive pastoralism needs thousands upon thousands of acres of grass.

    • srylands 3.2

      You invest where you can maximise risk adjusted returns.

  3. Leftie 4

    “New Zealand needs a stronger set of rules to stop our best land and agribusiness being sold off to foreigners.”

    Absolutely correct. It’s insanity for a country like New Zealand to sell it’s core business to it’s foreign competitors.

  4. Nova Scotia 5

    http://www.stuff.co.nz/business/farming/82568204/chinese-company-majority-investor-in-200m-southland-dairy-plant

    What is interesting about this investment is the complete lack of understanding of the implications that it and others like it will have for future dairy payouts in NZ and the subsequent decrease in land values, which will be snapped up by foreign investors who control the processing plant.
    At a time of declining or flat line production in the NZ dairy industry, additional investment in plant is adding more production capability which is decreasing productivity and efficiency of existing plant, which is primarily owned by Fonterra. This means the cost of production per kgMS will increase for Fonterra, and therefore its payout will decrease. Eventually, with increasing new investment in plant by foreign investors at a time of static supply, Fonterra will slide into an irreversible cycle of lower production volumes, higher costs per kgMS, lower payout, less suppliers and so on.
    Now you might say this is competition and market forces at play, and the demise of Fonterra is no bad thing, but the reality is that most industry payouts available to dairy farmers are currently pegged to the Fonterra payout (as suppliers always have the option of moving back to Fonterra) and land prices reflect that.
    But when you remove Fonterra from the equation, payouts will become at the discretion of the privately owned dairy manufacturers.
    So, irrespective of global markets, dairy payouts will decrease in NZ as foreign ownership of dairy manufacturers increases and Fonterra’s production and payout decrease.
    I hope farmers and those saying foreign investment is good for NZ know exactly what the consequences of this foreign investment will be for themselves, for land prices, for the banks and for eventual control of NZ farm land. Because it isn’t pretty.

    • Pat 5.1

      +1

      it isn’t necessarily misunderstood, but it is ignored within the short term horizons of everyone involved….am trying to recall that other sector bedeviled by short-termism recently…..

    • Ad 5.2

      It’s a little strange to be in full agreement with Federated Farmers’ spokesperson who is quoted as very cautious about the proposal saying:

      “I’m concerned about the high level of offshore investment, I would have preferred to see it sourced more from local funding.”

      There was also “plenty of stainless steel” in Southland, with Fonterra’s Edendale drying plant not working to full capacity.

      Whereas the local politician doesn’t care where the capital or the ownership comes from, simply saying the plant was “massive” for the district, and would inject an estimated $90m into the local economy.

      “It’s fantastic to see this investment opportunity come to fruition. We haven’t seen that kind of investment here for a very long time,” he said.

      So not only is the meat processing going to the Chinese, so is much of the southland dairy processing.

      This comes to a very practical point: you get rich on the processing, value-added products, and retailing. Not on the commodity production. Ownership of agricultural land and agri-business is the most important way to get and stay rich in New Zealand.

      New Zealanders should be the ones to get rich first.

  5. Draco T Bastard 6

    New Zealand needs a stronger set of rules to stop our best land and agribusiness being sold off to foreigners.

    Yes, we do. We need a complete ban on offshore ownership.

    • weka 6.1

      The thing I find interesting is that we (NZ) can conceive of restricting house sales, but rural land sales have gone through a similar price spike and have affected NZers ability to buy and work the land. Which then begs the question of why it’s taboo to talk about banning, and do we really believe the NZers can’t be good land custodians? I get that the hardcore neoliberals don’t know how to run the economy without overseas investors, but that’s just money grubbing. Not sure why NZ culturally is hesitant about a ban though.

      • Draco T Bastard 6.1.1

        The thing I find interesting is that we (NZ) can conceive of restricting house sales, but rural land sales have gone through a similar price spike and have affected NZers ability to buy and work the land.

        Actually, IIRC, Labour jumped at the restricting rural sales first.

        Not sure why NZ culturally is hesitant about a ban though.

        I don’t think that NZers are. It’s the politicians playing nice to rich people rather than doing what’s right for their nation.

Recent Comments

Recent Posts

  • NZ announces a third P-3 deployment in support of UN sanctions
    The Government has deployed a Royal New Zealand Air Force P-3K2 Orion (P-3) maritime patrol aircraft to support the implementation of United Nations Security Council (UNSC) resolutions imposing sanctions against North Korea, announced Minister of Foreign Affairs Winston Peters and Minister of Defence Ron Mark. “New Zealand has long supported ...
    BeehiveBy beehive.govt.nz
    23 hours ago
  • Pacific trade and development agreement a reality
    Pacific regional trade and development agreement PACER Plus will enter into force in 60 days now that the required eight countries have ratified it. Trade and Export Growth Minister David Parker welcomed the announcement that the Cook Islands is the eighth nation to ratify this landmark agreement. “The agreement represents ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Securing a pipeline of teachers
    The Government is changing its approach to teacher recruitment as COVID-19 travel restrictions continue, by boosting a range of initiatives to get more Kiwis into teaching. “When we came into Government, we were faced with a teacher supply crisis,” Education Minister Chris Hipkins said. “Over the past three years, we ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Border exceptions for a small number of international students with visas
    The Government has established a new category that will allow 250 international PhD and postgraduate students to enter New Zealand and continue their studies, in the latest set of border exceptions. “The health, safety and wellbeing of people in New Zealand remains the Government’s top priority. Tight border restrictions remain ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • First COVID-19 vaccine purchase agreement signed
    The Government has signed an agreement to purchase 1.5 million COVID-19 vaccines – enough for 750,000 people – from Pfizer and BioNTech, subject to the vaccine successfully completing all clinical trials and passing regulatory approvals in New Zealand, say Research, Science and Innovation Minister Megan Woods and Health Minister Chris Hipkins. ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • International statement – End-to-end encryption and public safety
    We, the undersigned, support strong encryption, which plays a crucial role in protecting personal data, privacy, intellectual property, trade secrets and cyber security.  It also serves a vital purpose in repressive states to protect journalists, human rights defenders and other vulnerable people, as stated in the 2017 resolution of the ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Ministry of Defence Biodefence Assessment released
    The Ministry of Defence has today released a Defence Assessment examining Defence’s role across the spectrum of biological hazards and threats facing New Zealand. Biodefence: Preparing for a New Era of Biological Hazards and Threats looks at how the NZDF supports other agencies’ biodefence activities, and considers the context of ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020
    New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020 Hon David Parker’s response following Thomas Piketty and Esther Duflo. Good morning, good afternoon, and good evening, wherever in the world you might be. I first acknowledge the excellent thought provoking speeches of Thomas Piketty and Esther ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Kaipara Moana restoration takes next step
    A Memorandum of Understanding has been signed today at Waihāua Marae between the Crown, local iwi and councils to protect, restore and enhance the mauri of Kaipara Moana in Northland. Environment Minister David Parker signed the document on behalf of the Crown along with representatives from Ngā Maunga Whakahī, Ngāti ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New Zealand and Uruguay unite on reducing livestock production emissions
    Agriculture Minister Damien O’Connor and Uruguayan Minister of Livestock, Agriculture and Fisheries Carlos María Uriarte have welcomed the launch of a three-year project that will underpin sustainable livestock production in Uruguay, Argentina, and Costa Rica.  The project called ‘Innovation for pasture management’ is led by Uruguay’s National Institute of Agricultural ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • 3100 jobs created through marae upgrades
    Hundreds of marae throughout the country will be upgraded through investments from the Provincial Growth Fund’s refocused post COVID-19 funding to create jobs and put money into the pockets of local tradespeople and businesses, Regional Economic Development Minister Shane Jones and Māori Development Minister Nanaia Mahuta have announced. “A total ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Health volunteers recognised in annual awards
    Health Minister Chris Hipkins has announced 9 teams and 14 individuals are the recipients of this year’s Minister of Health Volunteer Awards.  “The health volunteer awards celebrate and recognise the thousands of dedicated health sector volunteers who give many hours of their time to help other New Zealanders,” Mr Hipkins ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Community COVID-19 Fund supports Pacific recovery
    The Minister for Pacific Peoples, Aupito William Sio says a total of 264 groups and individuals have successfully applied for the Pacific Aotearoa Community COVID-19 Recovery Fund, that will support Pacific communities drive their own COVID-19 recovery strategies, initiatives, and actions. “I am keen to see this Fund support Pacific ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Community benefits from Māori apprenticeships
    Up to 50 Māori apprentices in Wellington will receive paid training to build houses for their local communities, thanks to a $2.75 million investment from the Māori Trades and Training Fund, announced Employment Minister Willie Jackson today. “This funding will enable Ngāti Toa Rangatira Incorporated to provide its Ngā Kaimahi ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Training fund supports Māori jobseekers
    Rapidly growing sectors will benefit from a $990,000 Māori Trades and Training Fund investment which will see Wellington jobseekers supported into work, announced Employment Minister Willie Jackson today. “This funding will enable Sapphire Consultants Ltd. to help up to 45 Māori jobseekers into paid training initiatives over two years through ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Ruakura Inland Port development vital infrastructure for Waikato
    The Government is investing $40 million to develop an inland port at Ruakura which will become a freight super-hub and a future business, research and residential development for the Waikato, Urban Development and Transport Minister Phil Twyford, and Māori Development Minister Nanaia Mahuta announced today. The funding has been has ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Appointments made to Defence Expert Review Group
    Defence Minister Ron Mark announced today the establishment of an Expert Review Group to review a number of aspects of the New Zealand Defence Force’s (NZDF) structure, information management and record-keeping processes.  The Expert Review Group’s work arises out of the first recommendation from the Report of the Government’s Inquiry ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • No active community cases of COVID-19
    There are no active community cases of COVID-19 remaining in the country after the last people from the recent outbreak have recovered from the virus, Health Minister Chris Hipkins said today. “This is a big milestone. New Zealanders have once again through their collective actions squashed the virus. The systems ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Clean energy upgrade for more public buildings
    More public buildings will be supported by the Government to upgrade to run on clean energy, the Minister for Climate Change James Shaw announced today. Minister Shaw announced that Lincoln and Auckland universities will receive support through the Clean-Powered Public Service Fund to replace fossil fuel boilers. Southern, Taranaki, and ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Schools back donations scheme for the second year
    More schools have opted in to the donations scheme for 2021, compared to 2020 when the scheme was introduced. “The families of more than 447,000 students will be better off next year, with 94% of eligible schools and kura opting into the scheme,” Education Minister Chris Hipkins said. “This is ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Ruapehu cycle trails gets PGF boost
    The spectacular Mountains to Sea cycle trail in Ruapehu District will receive $4.6 million in funding from the Provincial Growth Fund for two additional trails, Regional Economic Development Minister Shane Jones announced today. “This is an exciting development for the local community, and one that will provide significant economic opportunities ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Update to air border order strengthens crew requirements
    Additional measures coming into effect on Monday will boost our defence against COVID-19 entering New Zealand through the air border, Health Minister Chris Hipkins said today. “As part of our precautionary approach and strategy of constant review, we’re tightening the requirements around international aircrew,” Chris Hipkins said. The COVID-19 Public ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • A true picture of Māori business activity
    A better picture of the contribution Māori businesses make to the economy will be possible with changes to the way information is collected about companies and trading enterprises. Māori Development Minister Nanaia Mahuta and Small Business Minister Stuart Nash have announced a new option for Māori enterprises who are part ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • PGF funding for Taranaki projects
    The South Taranaki museum, a New Plymouth distillery and a Pasifika building firm will benefit from a Government investment totalling more than $1 million, Regional Economic Development Minister Shane Jones says. The $1.05m in grants and loans from the Provincial Growth Fund (PGF) will help the recipients expand and create ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Fijian Language Week 2020 inspires courage and strength during COVID-19 pandemic
    The Minister for Pacific Peoples, Aupito William Sio says the theme for the 2020 Fijian Language Week reflects the strong belief by Fijians that their language and culture inspires courage and strength that is strongly needed in times of emergencies, or through a significant challenge like the global COVID-19 pandemic ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Trades training builds on iwi aspirations
    An investment of $2.025 million from the Māori Trades and Training Fund will support Māori to learn new skills while making a positive difference for their communities, announced Employment Minister Willie Jackson today. “K3 Development Limited Partnership will receive $2,025,000 for its Takitimu Tuanui apprenticeship programme, which will support the ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Conservation Minister plants two millionth tree in Raglan restoration
    A long-term conservation project led by the Whaingaroa Harbour Care group in the western Waikato reaches a significant milestone this week, with the planting of the two millionth tree by the Minister of Conservation Eugenie Sage. “Planting the two millionth tree crowns 25 years of commitment and partnership involving Whaingaroa ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Seniors – our parents and grandparents
    International Older Persons Day is a chance to think about the individual older New Zealanders we know and to confront ageism, Seniors Minister Tracey Martin said today. “What happened around COVID-19 is a reminder that our over-65s are a very large and diverse group of people and we need to ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Residential building sector growing stronger
    Figures released by Statistics New Zealand today show healthy growth in residential building consents in an environment of Government support for the sector during COVID-19, says Housing Minister Dr Megan Woods. Statistics New Zealand reported today that a record 10,063 townhouses, flats, and units were consented in the August 2020 ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • PGF helps Bay of Plenty youth find jobs
    Provincial Growth Fund (PGF) support for a pathways to work hub in Tauranga will help address high youth unemployment in the Bay of Plenty by connecting young people with training and meaningful employment opportunities, Parliamentary Under-Secretary for Regional Economic Development Fletcher Tabuteau has announced. “Priority One Western Bay of Plenty ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Government confirms new acute mental health facility for Lakes DHB
    A new acute inpatient mental health facility at Rotorua Hospital will provide more patient-centred and culturally appropriate care to better support recovery, Health Minister Chris Hipkins says. “Improving mental health and addiction services remains one of the biggest long-term challenges facing New Zealand,” says Chris Hipkins. “Lakes DHB’s existing Whare ...
    BeehiveBy beehive.govt.nz
    3 weeks ago