Corporate farming here to stay

News that an overseas-backed Maori trust is trying to buy 28 farms in Southland sent alarm bells ringing at Federated Farmers. Its concern was mostly about the details of the financial arrangements, but it highlighted the fact that corporate farming, a trend that has been slow to take off in New Zealand, is becoming a force to be reckoned with reports Stuff. Chris Kelly, chief executive of the country's largest corporate farmer, Landcorp, says he knows of other initiatives being explored and believes there will be more foreign investors knocking at New Zealand agriculture's door."One of the increasing issues that is emerging in the world is the issue of security of supply of food," he says. Middle Eastern countries, in particular, "are suddenly realising that really, we're not getting any more land, we're getting more people, we have to feed them, and they have to live somewhere so the availability of agricultural land is decreasing". A list of foreign investments in New Zealand agriculture tells the story. Last year alone, Singapore's Olam took 14 per cent of NZ Farming Systems Uruguay, in addition to the quarter stake it holds in Open Country Cheese. Mitsui raised its stake to 22 per cent of Canterbury milk powder company Synlait, and Russian baby and specialist food giant Nutritek bought New Zealand Dairies in July. But it's not just foreigners buying up large. For at least two decades farmers have been upsizing to get economies of scale. Mr Kelly thinks the days of the small family farm are numbered. "If I take the dairying industry for example, as recently as 10 years ago, the average herd size was 150 cows, now it's 300 and growing, ... so I think the concept of corporate farming, as in a large farm, will only increase." The biggest players in New Zealand are Landcorp, the 58-farm South Island-based Dairy Holdings Ltd, the Cushing family's $200 million, 30-farm New Zealand Rural Equities Ltd based in Hastings, and some of the Maori incorporations. With the exception of Landcorp, these are all in private ownership.