New Overseas Investment Act rules won't have a massive impact on land values, PM Key tells Fed Farmers

New Overseas Investment Act rules won't have a massive impact on land values, PM Key tells Fed Farmers

New Overseas Investment Act rules should not have a massive impact on farm prices, Prime Minister John Key said today.

Government announced changes to Ministerial powers under the Overseas Investment Act in September, giving them more flexability to reject foreign applications to buy up 'sensitive' farmland.

At the time, Finance Minister Bill English said farm values could fall due to the new rules, but that the government felt the farming community was ready for a drop in prices. 

Key appeared before the Federated Farmers National Council meeting in Wellington this afternoon and was asked whether changes to the overseas investment rules would hit land values.

"I don't think it will enormously," Key said, adding the Minister responsible could not just say 'no' to applications if he wanted to.

"So when Phil Goff got up the other day and said 'you gotta do this and you gotta do this and you gotta do that', which is already in section 17 [of the Act], 'and all this means I'll generally say no, not yes, if I become the governmnent', well you can't just do that.

"You'd be judicially reviewed and they would eventually say you're in breach of the law.

"In our view the changes we've made will give the minister more powers, it will stop mass aggregation of farmland but I don't think it will have a massive impact on farm prices," he said.

Concerned about the Chinese buying up NZ's productive base

Meanwhile, Key also let on as to what he said was the main driver behind the rule changes to the Act - to do with the increasing possibility of large land aggregations made by states like China as food security issues loom.

"What we were worried about was a scenario, not where an individual or a company came in and bought a farm, but we can see that long term food security issues are genuine issues that countries like China and those with a very large population are considering," Key said.

"And they could easily, if they wanted to, go in and buy a very large part of the productive base in New Zealand," he said.

"Even if it wasn’t economic today, on the basis that they’ve got 1.3 billion people to feed in years to come, and all the economics tell you they do not have enough arable land to feed their people as their population not only rises, but their wealth rises and they demand higher prices.

"That could have quite a lot of implications for Fonterra, for our productive sector and for the way that we operate.

"So that’s the rationale behind the rule change – to try and reflect that there might be a changing pattern in there," he said.

(Update adds concerns on land aggregation)

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How long until we have Free land like the USA?

Maybe not too long if Goff gets in and bans all foreign sales

http://www.cnbc.com/id/40220738

7 Towns Where Land is Free

As small towns suffer from a continuing flight from rural toward-more urban living, some economic development groups and governments in these troubled areas have chosen to stay and fight.

The Homestead Act of 1862 is no longer in effect, but free land is still available out there in the great wide open (often literally in the great wide open). In fact, the town of Beatrice, Nebraska has even enacted a Homestead Act of 2010 .

As with the homesteaders of the 1800s, the new pioneers must not be the faint of heart—they can’t be the type to shy away from the trials of building a home from the ground up, or the lack of Starbucks on every corner, or unpaved roads (extremely remote location and lack of infrastructure is probably what caused a well-publicized land giveaway in Anderson ,AK to flop). If the Google Maps overhead view of the vast open space surrounding the modest street grids of these towns doesn’t instill cabin fever, then read on—these parcels are up for land grabs.

 

Great quotes from John Key detailing his thinking on the growth of China and the risks to NZ sovereignty.

 

cheers Alex

Bernard

I do not understand the nature of the problem. If demand for agro products is that big then why is anyone thinking of selling to the Chinese or any one else, according to what we read  farmers should be well off... why would they want to sell?.