Airport, farm - what's the difference?

12-07-2010 | Alan Emerson

I found all the noise around the Landcorp bid for the Crafar farms fascinating, to say the least.

At one level I think it is a good idea.

Landcorp is a good, substantial, solid, well-run New Zealand company. It has little debt and would be able to borrow a lot more money than it needs to buy the Crafar farms.

In addition it encourages people into agriculture and trains them well.

On a political level, however, I have a real issue with the purchase.

For a start we have a Hong Kong based company having put a successful bid on

the Crafar farms waiting for Overseas Investment Commission approval. That is a

legislated process and should, in my opinion, be left to run its course.

NZ needs overseas investment.

We have a free trade agreement with China and the Chinese have huge investment here, not the least of which is a major share in "iconic" Fisher and Paykel. So what is the problem with selling farmland to the Chinese?

I'd actually go one step further and argue that if a farmer can get better money for his or her land by selling to offshore interests they should be allowed to do so without political interference.

Landcorp chief executive Chris Kelly was quoted as saying if the rumour mill was correct the Landcorp bid was likely to be lower than that of the Hong-Kong based consortium, UBNZ.

What that says to me is that those owed money by the Crafars are going to get less of a return if Landcorp buys the farms than if UBNZ does, so there is a further ripple effect through the economy.

Returning to my point, however, there is a legislated process to go through and it should be allowed to take its course.

It was then somewhat surprising to me that after the bid had been lodged and before

any proper decision was made we had Agriculture Minister David Carter saying the sale was unlikely to go ahead.

Whether it was a personal opinion or not Carter still sits round the Cabinet table and has an influence there.

As UBNZ vice-chairman Graham Chin said, "as a government minister Carter should be making no public comments, personal or otherwise, on our OIO proposal".

I'd agree with that.

Then just 10 days ago we had Prime Minister John Key talking down the proposal.

He was quoted saying he "wouldn't want to see a wholesale sale of NZ's land productive sector".

He went on to say he was concerned if foreigners could buy large swathes of land but less so if they bought only one farm.

Again I would ask the question: do we have rules or don't we?

The comments are made all the more surprising in light of a current Treasury review on overseas investment to "promote and encourage the flow of foreign investment".

It is also enlightening to read the transcript of Key's discussion with journalists on the steps of Parliament in April 2008 when he strongly supported the Canadian pension fund buying Auckland International Airport.

The then Labour government blocked the sale.

"If we are going to undermine the whole confidence in our financial markets that will cost NZers' jobs it will cost them the ability to actually run companies over here. This will have implications for the way NZ is perceived," was Key's view of the blocked sale.

He went on to say "This deal would have pumped $1.8 billion into the NZ economy. That would've put confidence back into our stock exchange."

I would ask what is the difference between an airport and 16 farms?

So my concerns are threefold.

The first is that we have a proper process that should be allowed to run its course without political interference. We have a legislative framework that is infinitely more preferable in my opinion to policy decisions made on the hoof and coming from left field.

The second is what would have happened if there were Australian, British or American interests trying to buy the Crafar farms?

That is of real concern to me.

Finally, as I've said Landcorp is an extremely solid, well run company but how long

will it remain a state owned enterprise?

In Opposition Carter told me (FW March 10 2008) that "as Minister of Agriculture I would sell Landcorp farms. I don't see taxpayer money best invested in farms. The money should be used to give a better return to the taxpayer".

National subsequently said it wouldn't sell any assets in its first term.

That begs the question if Landcorp gets sold in National's second term - who will it be sold to?

The Chinese perhaps?

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