Opinion: Allan Barber looks at the sale of the Crafar farms to Pengxin/Landcorp from a rural point-of-view

Opinion: Allan Barber looks at the sale of the Crafar farms to Pengxin/Landcorp from a rural point-of-view

By Allan Barber

New Zealanders get very nervous when tracts of our farmland come up for sale, which is slightly difficult to explain for several reasons: New Zealand is becoming increasingly urban with an ever smaller percentage of the population living in the country, let alone owning land; overseas buyers have been allowed to buy large areas of farmland under the Overseas Investment Office review arrangements, recently tightened by the National Government, without serious objection or adverse impact; the farm output must be processed here before it can be exported; and the overseas funds generated help our balance of payments.

But it seems every politician desperate for a bandwagon or soapbox – Winston Peters followed closely by David Shearer and the Greens - to stimulate public anger at this loss of our birthright only has to make outlandish claims about the damage the sale will do to our economy and the role of the inevitably overseas owned banks.

Yet we want to be able to continue to enjoy a reputation as a stable place to do business, specifically so we can attract foreign investors to put money into New Zealand, not to mention our standard of living.

There’s a strong chance Peters’ strident claims about the Crafar deal are because it’s the only issue he can try to make his own, as he realises he has got back into parliament without actually being able to wield any influence. The irony is that he is now lined up on the same side of the argument as Sir Michael Fay, possibly the most unlikely pair of joint protagonists ever imaginable.

However there are some serious aspects to this debate, most notably the potential damage to New Zealand’s reputation as an investment friendly country, if the debate continues to gain more traction and eventually results in a major change in policy under a change of government.

Labour has nailed its colours to the populist mast, but it will find it more of an anchor when it has to decide how to change the rules of the OIO – does the intended ban only apply to land sales, will there be a minimum size or value threshold, will it apply to business sales, private homes on large land holdings and what impact will it have on our trade agreements.

It also appears to be a case of racial prejudice, inasmuch as it’s OK if the buyers are European, American or Australian, but not if they are Chinese.

The major issue conveniently ignored by those against the sale of land, specifically the Crafar farms, is the massive gap between the price offered by Shanghai Pengxin and the Iwi/Fay consortium, at least $30 million or 15%.

Whether or not the final price is economically justified, it sets a higher benchmark for land values which will benefit dairy farmers; whereas any kneejerk restriction based on the nationality of the buyers will inevitably cause prices to fall because a particular group has been excluded.

The debate also conveniently ignores the provisions imposed by the OIO on Shanghai Pengxin, including the requirement to ensure any investment in a dairy processing plant has a minimum 50% New Zealand component, as well as the stipulation that consent will be withdrawn if the management contract with Landcorp does not eventuate.

Pengxin must also invest $14 million to upgrade the farms which have become somewhat run down as well as certain other provisions including using “reasonable endeavours” to help Landcorp extend and develop its Chinese market and establishing a dairy training facility at its expense.

The arguments against deals such as the Pengxin deal to buy the Crafar farms conveniently ignore several basic truths about such transactions: first, New Zealand wants to be able to do exactly the same in overseas markets, for example NZ Farming Systems Uruguay which involved buying and converting, admittedly at too high a cost, large tracts of pastoral land in Uruguay; second, there were no local buyers prepared to pay the price for what are only average farms for the most part and are not exactly strategic; third, successive governments have identified a Free Trade Agreement with China as a key plank of our future economic development and it would have been damaging to this strategy if the government had revoked an OIO decision.

We expect jingoistic nationalism from Winston Peters, but heaven help us if one of the two major parties is about to change its whole attitude to trade and investment on the basis of an ill informed, prejudiced public reaction to overseas investment which has been a crucial contributor to the New Zealand economy for over 150 years.

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Allan Barber is a commentator on agribusiness, especially the meat industry, and lives in the Matakana Wine Country where he run a boutique B&B with his wife. You can contact him by email at allan@barberstrategic.co.nz or through his blog at http://allan.barber.wordpress.com

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I just hope we can sell the rest of the countries assets to overseas entities. It sounds such a great idea, absolute nirvana.

 
New Zealand is becoming increasingly urban with an ever smaller percentage of the population living in the country, let alone owning land
but we have memories of the family farm, we love the land and as we make our way through hicksville, dream of having a farm with a duck pond (like the "Green Book" at school).
we also sense that it is the productive earth that feeds and provides for us (not the realestate industry).
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overseas buyers have been allowed to buy large areas of farmland under the Overseas Investment Office review arrangements, recently tightened [ a little] by the National Government, without serious objection or adverse impact;
"did you know how much land was being sold to foriegners?"   "No!!" , Gee, you're kidding!"
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the farm output must be processed here before it can be exported; and the overseas funds generated help our balance of payments.
and how did we get to a point where we have a balance of payments problem? It wasn't because we made copper pipes, it had everything to do with people making money for nothing. The Realestate industry and it's lobbyists played a big part.
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Yet we want to be able to continue to enjoy a reputation as a stable place to do business, specifically so we can attract foreign investors to put money into New Zealand, not to mention our standard of living.
There are limits as  to how far we should go to be "a stable place to do business". Libertarins were the people most resistant to ending the slave trade.
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there are some serious aspects to this debate, most notably the potential damage to New Zealand’s reputation as an investment friendly country,
breathtakingly cheap waterfront real estate, see-through fish-tank architecture, and an investment climate that, as one Las Vegas resort owner–cum–South Island winemaker puts it, makes New Zealand “the Switzerland of the South Seas.”
http://www.travelandleisure.com/articles/kiwi-country/
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The major issue conveniently ignored by those against the sale of land, specifically the Crafar farms, is the massive gap between the price offered by Shanghai Pengxin and the Iwi/Fay consortium, at least $30 million or 15%.
That is the problem with so many milionaires and billionaires out there and with the danger of food shortages as the worlds glaciers shrink the Chinese (and others)  can't loose, anyone wanting to buy their own farm will. This kind of senario takes a swathe of people out of the loop
http://www.usatoday.com/weather/climate/globalwarming/2010-06-10-glacier-melting-food-shortages-asia_N.htm
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The debate also conveniently ignores the provisions imposed by the OIO on Shanghai Pengxin, including the requirement to ensure any investment in a dairy processing plant has a minimum 50% New Zealand component, as well as the stipulation that consent will be withdrawn if the management contract with Landcorp does not eventuate.
A New Zealand componet = NZr with residency?
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The arguments against deals such as the Pengxin deal to buy the Crafar farms conveniently ignore several basic truths about such transactions: first, New Zealand wants to be able to do exactly the same in overseas markets, for example NZ Farming Systems Uruguay which involved buying and converting, admittedly at too high a cost, large tracts of pastoral land in Uruguay;
 
so why can't the Uruguayans lease the land to the NZ foriegners?
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second, there were no local buyers prepared to pay the price for what are only average farms for the most part and are not exactly strategic
 
because of the realestate boom: the one where a section of society got super wealthy via unearned capital gains.
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successive governments have identified a Free Trade Agreement with China as a key plank of our future economic development and it would have been damaging to this strategy if the government had revoked an OIO decision
 
since when did a free trade agreement of necessity, have to include farmland (the nations - and National Party's soul*)?
 
* a new breed of Queen Street Farmer and merril Lynch Prime Minister (Golman Sachs and all that)

Good one

We should have nothing to do with China while they occupy and suppress the people of Tibet. China has a supremacist attitude when dealing with 'foreigners' which places naive New Zealanders at a severe disadvantage. As Africans have found to their dismay, China don't provide jobs for nationals - they bring their own workers and an immigration agreement without caps. 

That is exactly what is happening, ever wondered how come every service station you come across is owned by what seems like one particular group of people. How can that possibly be, will someone explain.
I would love for there to have been as much publicity for every bit of land being sold to foreigners, giving us the opportunity to voice our opposition, and see then if we are all xenophobes. Many of us are quite happy to stand up and be counted as totalitarian-government-o-phobes, however, a bit different.
Wait and see what will happen with Penqxin and Fonterra, I too think the old softlyh softly catchee monkey thing applies here as well.
And Mr Barber I don't want asset sales, nor do I believe foreigner should be able to purchase strategic businesses (Turners and Growers for one) and rental houses along with farms
 
 

I have to agree with putting pressure on aggressive regimes, but if we applied that uniformly (which NZ should also do) we might not have very many trading partners.

It is very noticeable that New Zealand is selective in it's criticism of oppressive regimes and signs deals with countries like Indonesia who operates an apartheid regime every bit as bad as that in old South Africa. India too fails to lift their poor out of abject poverty and aid from the West is squandered on space programmes and syphoned off by corrupt officials. But hey we don't trade with Israel so lets bash the Jews instead to show we really care about the world poor.
 

If you don't support the trade sanctions on Israel, or think they are 'anti Jewish' then you need get a better grip of the history in this region. I am more than happy to suggest good sources, though only if you are interested.
I admit to not knowing the facts about the Indian aid program, but have little doubt that a lot of the aid is provided specifically to be used for these hi tech programs.
I also think that internal and external aggression must be handled differently. The trade sanctions on Iraq only ever strengthened the Bath party regime, and weakened opposition to the Bath regime.
 

To support trade sanctions against Israel shows a lack of what is really going on in the Middle East. Israel is the only democracy surrounded by hostile countries who have vowed to annihilate it and kill all the Jews. They make no secret of it. To support Arabs is to support Islamic terrorism and the spread of hate throughout the region. Anti-Israeli propaganda streams out of Palestine on a daily basis and is spread by Muslim apologists and aiders like the Mintos and Griffiths of this world. You would have to be very naive not to take the broader view. Israel wants peace but not at any price. If Palestinians stopped sending rockets into Israel there would be peace. If Israel disarmed - there would be no Israel.  

Seems the Anti-Israeli propaganda sources has spread even to their friends,
http://www.bbc.co.uk/news/world-middle-east-16023010
Hilary Clinton is well known to be extremely friendly to Israel.
Clearly I am not going to change your mind, but the facts and actions are well reported by many people outside the Muslim world.
The many similarities between the Indonesian (a regime now vilified) invasion of East Timor, and the Israel occupation of Palestine are obvious,
http://en.wikipedia.org/wiki/Indonesian_invasion_of_East_Timor
 

http://en.wikipedia.org/wiki/Palestine:_Peace_Not_Apartheid
The 'Propaganda' spreads as far as ex-US presidents.
 

It isn't by accident that pro-Palestinian activists have adopted the 'apartheid' smear to vilify Israel over their measures to protect citizens from terrorist attacks by Hamas. The use of the apartheid accusation by the liberal/Marxist left and useful idiots with which to use against Israel is a nonsense because apartheid, the policy of separate development along racial grounds, doesn't exist there -  but hey 'we bought down South Africa with the anti-apartheid movement so lets try it on Israel.'    

Good to see you didn't read a word of the ex US presidents justification for this term.
 

I don't visit sites that present lies as facts. I get enough of that from the politically correct BBC which I believe is one of your sources of misinformation. Besides, who listens to Clinton, a man who has no integrity, a friend of the Muslim Brotherhood and a philanderer?

That sums up very well your total ignorance.
 

That's a bit rich coming from someone who uses Wikipedia as an authoritative source on which to base his anti-Israeli views. 

Yes, I think we can trust wikipaedia to correctly record that ex President Carter wrote that book. Just as we could correctly find out from wikipaedia that Hilary Clinton has never been US president. If you don't agree, check the sources.

It's not surprising that you've referenced the Dhimmi President Carter as your source for disinformation. In his book "Palestine:  Peace Not Apartheid?" Carter actively gave consent for Palestinians to continue with their suicide bombings and rocket attacks on Israel until 'they've achieved their goals at the negotiating table'. This outrageous condoning of murder and terror resulted in the resignation of 14 members of the Carter Centre's advisory board. Not only did Carter cause a major upset in Jewish communities worldwide but also among people of his own organisation. The man is a complete idiot - you only have to look at his efforts in the Sudan to realise that.
 

How is allowing illegal and ruthlessly inhumane occupation of Palestinian land serving to protect the people who choose to live in the increasingly criminal state of Israel? Israel ignores any UN and international pleas to stop it's muderous colonial occupation. How do you expect Palestinians to react, whether fundamentalists like orthodox jews, or as the majority humane and humble people? The sense of despair Palestinians live with is a tragedy.

Well gosh Omnologo...where do you want to start?....http://www.palestineremembered.com/Acre/Palestine-Remembered/Story564.html#B.C.

Thats a flat fabrication, Carter does not condone crimes in the middle east. You however do condone criminal acts, in Palestine, committed by Israel. Plainly also you would have the New Zealand government support these crimes, by providing aid which would be used to escilate the very powerful military regime of Israel.
Clearly you don't want peace between Israel and Palestine.
 

Carter did advise Palestinians to continue with their acts of terror against Israel. This is a fact and the reason why 14 members of his staff left the Carter Centre.
Palestine receives over $US 2.5 billion in aid every year from 87 countries, New Zealand probably is one of them. Palestine has been receiving aid from the West for over 60-years and it still has refugee status in order to keep the aid flowing. By contrast Israel receives a pittance from the US to keep her defences intact from rocket attacks and other acts of terrorism.
Israel needs a powerful defence force - and so would NZ if it was surrounded by hostile nations whose stated agenda is to wipe you off the face of the earth. Israel has every right to protect her citizens from terrorism and that is what she does so effectively, much to the annoyance of Islamic apologists and their enablers, some of whom are commenting here on this thread.
Finally I support Israel in the quest for peace but not at any price so please stop putting words in my mouth.
 
 
 
 

Thats another fabrication, Carter didn't advise Palestinians to do anything, because he didn't advise them at all. Instead of fabricating and then fabricating again try providing some evidence. Better still just stop lying.
There is some truth to 2.5 billion in aid however, Israel receives 2.5 billion per year in military aid from the US. Just to make this clear the source of that figure is the world policy institute, not wikipedia. We should also highligh the complete stupidity of comparing military and non military aid, the scale of humanitarian aid is obviously in proportion to the scale of the disaster in Palestine. A disaster inflicted with the proceeds of US military aid to Israel. The plain reason Palestine has refugee status is because the flow of refugees from this disaster is constant.
http://en.wikipedia.org/wiki/Israel%E2%80%93United_States_relations
Fortunately it is becoming increasingly clear the complete hypocracy of the US supporting this regime in Israel, which is becoming increasing embarrasing.
http://www.reuters.com/article/2011/11/08/us-mideast-netanyahu-sarkozy-idUSTRE7A720120111108
It is well established that the price of peace is an end to illegitmate settlements, by Israel, in Palestine. The fact that these settlements are completely illegitimate is made quite overt by the significant Jewish community pressure in the US to suspend military aid to Israel. It is well established that Israel has rejected any peace agreements which gives up land anexed by settlements.
The defences you talk about include the West bank Barrier which was indicated by the International court of Justice, to be illegal under International law. In fact Israel's use of force (even in self defence) is illegal under International law, because the resort to force is only legal when alternatives (such as negotiation, or withdrawing from settlements) have been exhausted.
http://en.wikipedia.org/wiki/Timeline_of_the_Israeli%E2%80%93Palestinian_conflict
This is all something which you fully condone (by calling it self defence), and want the NZ government to support. I have no doubt you will continue with this fiction that Arabs are inately violent and must be brutally ruled because of this, but the reactions to September 11 of legitimate political bodies in Arab countries paints a very different and vulgar picture. One where factions in the US in particular are pushing this idea, constantly pushing countries like Israel towards conflict, smearing and delegitimatising Arab political organisations so that they can continue to govern them. Sadly it seems reasonable to conclude that if the price of peace in the middle east is further self determination in Arab states, this is too high a price for the US to pay.
http://en.wikipedia.org/wiki/Reactions_to_the_September_11_attacks
 

The idea 'we bought down South Africa with the anti-apartheid movement so lets try it on Israel' is extremely vulgar. In fact the role of international pressure had a very small effect and the phrase completely ignores the contribution of those who actually brought down the apartheid regime, the victims of the regime.
There are obviously parallels as well between the leaders of the anti-apartheid movement who were labeled terrorists. Nelson Mandella was finally removed from the US terrorist list only in 2008.
What kept the apartheid regime in place for a long time was US aid, and international pressure had some influence on the US decision to drop aid to the regime. But this occured long after the regime lost all validity inside South Africa and it became an overt embarrassment and contradiction to support it.
 

I see your still at your hate mongering but this is not the the forum to continue the debate. I will no doubt see you on another thread - meanwhile keep taking the tablets and try to get some rest.

I see your still at your hate mongering but this is not the the forum to continue the debate. I will no doubt see you on another thread - meanwhile keep taking the tablets and try to get some rest.

I see your still at your hate mongering but this is not the forum to continue the debate. I will no doubt see you on another thread - meanwhile keep taking the tablets and try to get some rest.

It can hardly be considered a debate, all you have proven is your total ignorance (accidental or intentional) to any of the facts. Instead you attempt to refuse the credibility of any source of real events, and present no information yourself (though you made numerous claims, several of which were palpably lies).
In fact the NZ position (that Israel is unjustified in its present oppression of Palestinian people) is the position held by the vast majority of UN states, the world court, numerous public figures and the majority opinion of the worlds population.
Its more than apparant that you don't have any justification for your position, which is to deny Palestinians the most basic human rights. Some how despite this you have the gall to call me a hate monger. In fact its more than apparant that the NZ government would be guilty of exactly this in supporting the crimes of the Israeli state.
 

Curious whether you think Irgun, Haganah and the Stern Gang et al were terrorists or "freedom fighters". King David Hotel? Dier Yassin? Sabra and Shatilla refugee camps? White phosporous on civilians in Gaza? Seems to me Israel has not been opposed to using terror as a weapon from its earliest days and their political and military elite are no better than their enemies. Plenty of conscientious objectors and dissidents within Israel too who oppose Israeli government policy.

I posted when the original Crafar decision came out, about what was happening in the Pacific regarding chinese Investment in land.
 
Here is a recent newspaper piece from my old stomping ground , Vanuatu.
 
Mi harem se Chinese investors are snapping up property and building at a fast rate but resident insurance companies know a lot of them do not have insurance and because building codes are not enforced here a few of them would unlikely get insurance cover which raises the question over whether the investments are a way to get money out of China. The latest building snapped up is Georges House next to the Drug Store which went for a reported US1.7 million. Chinese are paying big money for street frontage now. Silip!
 
http://www.dailypost.vu/content/mi-harem-se-35

If it was okay for Ben ,hoss,adam and little joe to employ a chinese cook [hop sing] then ican accept the crafar farms being sold to hop sings relations.
I bet hop sing eventually bought the ponderosa.

He did....his grandchildren own it lock stock and rice bowl...all beef exported to family restuarant chain in Beijing at zero profit..no tax pay in usa...fat profits for restuarants feeding fat Americans.

Allan Barber I thought you were nothing more than a journalistic hack, hanging on the shirt tales of the Talley brothers; not someone with the mandate to comment from a rural point of view. What rural point of view do you bring to this debate? I'd say you bring the point of view of immoral short term gold digging belonging in the corner of the self absorbed finance and corporate industry. How is selling our land to the highest foreign bidder going to deliver long term, sustainable economic activity to NZ? Any money from the sale goes offshore to the banks.

Iain - several times in the last few weeks  I referred to:
 Don't join the race - New Zealand.
 
We see  more major economic foreign operations, our authorities cannot handle financially, technologically and operationally.
 
http://www.parliament.nz/en-NZ/PB/Business/QOA/b/2/6/49HansQ_20110413_00...
 
 
 It time for small beautiful New Zealand to think economics and come up with a long term vision for the country.
Today - where the world is moving into more and more pollution in many sectors of industries, remote New Zealand has a great opportunity to make a difference and be the role model for the world. A 100%pureNZ – clean and green strategy would generate billions in return.
 
http://www.scientificamerican.com/article.cfm?id=10-worst-toxic-pollutio...

The Chinese are only securing their food requirements for the future. Farmland is finite and as the author pointed out not all Farmland is equal, lucky for NZ we grow more than we can eat, and milk  more than most farm production, requires further processing which has to be done close to the farm gate.
I would add that the Chinese must expect the price for farmland to go alot higher as there are many more countries that they could by land in a pay much less for it, and its much closer to home!
http://www.greenworldbvi.blogspot.com/2011/12/farmland-investments-great-new-asset.html

The other countries don't have the same level of IP developed by independent farmers and flogged off to the Chinese by Landcorp (admittingly knowing Landcorp it will be poorly implemented). If agricultural land is so scarce and increasingly valuable, why not leverage it to benefit NZs economy long term, instead of sell it to wealthy foreign corporates, with any cash from sale been concentrated in foreign banks?