Pending Crafar farms sale to Chinese company Pengxin not hurting National Party support, PM Key says

Pending Crafar farms sale to Chinese company Pengxin not hurting National Party support, PM Key says

The initial Overseas Investment Office (OIO) decision to allow the Crafar farms to be sold to a Chinese company is not denting the National Party's support, Prime Minister John Key says.

The Sunday Star Times reported yesterday that Key's office had received over 100 emails or letters opposed to the decision, with many from National Party supporters saying they were withdrawing their support for the party due to the decision.

But this morning, Key dismissed claims that the decision was hurting National's support in heartland New Zealand, saying on TVNZ's Breakfast there would always be a range of views on any decision made by the government.

"I've been around quite a lot of rural events recently, from the Waimumu field days right through to Golden Shears on Saturday night, and there's no evidence that's eroding our support at all," Key said on Breakfast.

"What the Sunday Star Times breathlessly printed was a couple of emails that had been sent to my office - I think they said there had been 100 in total. Hate to tell them the bad news, but pretty much on any issue in New Zealand I will get 100 emails, and sometimes I get 10,000 emails if it's a significant issue," Key said.

"So there is a mixture of views, no doubt about that. Some farmers come up to me and say, 'I own the farm, it's my property right, and I should be able to sell it to whoever I like'. Others say [they] don't want farmland going overseas. There's definitely a range of views, but I don't see it hurting National's support," he said. 

Later on Newstalk ZB, Key said issues farmers were raising with him included the government's proposed amendmends to the Dairy Industry Restructuring Act, the piece of legislation that created Fonterra in 2001. See the government's proposed amendments in a January article here

Key said on Breakfast he was not aware how long it would take for the Overseas Investment Office to revise its original decision to allow Pengxin to buy the farms. That was overturned by the High Court in February, which ruled the OIO did not apply the 'economic benefits' test of the Overseas Investment Act correctly, and needed to revise its decision.

The OIO is currently seeking legal advice on how to interpret the ruling, which means it effectively has to compare Pengxin's bid to that of a hypothetical New Zealand purchaser.

(Updates with comment from Newstalk ZB)

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

11 Comments

Now it turns out that these farms were offered INDIVIDUALLY to overseas purchasers butnot  in NZ. They were only offered as a job lot. Far as I am concerned that alone should be grounds enough for ripping the sale contract and forcing the receivers to put these farms back on the market, individually as well as a job lot. The receivers most definitely should not be allowed to discriminate like this.
Other than that, no asset, farm, strategic business or rental housing to be sold to foreigners
 

Not so fast...read the last paragraph of the original Bayleys listing
http://www.bayleys.co.nz/4100069

NeilD, just got there before me....

I'm sorry but a quick google search shows individual offers, or offers for groups of farms, were being considered domestically.
Bayleys was appointed in April 2010 to market both here and offshore:
http://www.scoop.co.nz/stories/BU1004/S00581.htm
The portfolio is being marketed exclusively both domestically and internationally by Bayleys Real Estate through a tender process closing on June 23 – unless some or all of the farms are sold prior. Preparation of marketing material and specific farm operations data is already well underway, and is expected to be completed for potential buyer review early in May. During the interim, registrations of interest are being taken via the website www.crafarfarms.co.nz
Bayleys managing director Mike Bayley said a substantial amount of ‘behind the scenes’ work had already been undertaken to maximise marketing activity for the portfolio – deemed to be one of the most important corporate offerings to hit the rural property market this year.
The corporate structure of the Crafar holdings means there is the potential to sell down the portfolio through any combination of units – as individual farms purchased by separate operators, in regional clusters to existing medium-sized farming entities, or to one buyer from the institutional or financial investment sectors,” Mr Bayley said.
It's the receiver's job to get the best possible sale price for the combination of assets they're in charge of.
Sure, it's a good argument to have about whether the farms should have been sold individually to help out local/young farmers, but then the argument should be about receivership and rural lending laws and regulations.
But as it stands, the receivers are charged with trying to get the best possible price.
Of course they're going to market them offshore as well if they're trying to get the best price for the package of assets. But they also marketed them onshore, and as separate operations.
That trip overseas to market the farms (individually, in clusters or as a block) was also well documented at the time (in this Fairfax article, the company which also owns the Star Times which wrote the article on the weekend you refer to):
http://www.stuff.co.nz/business/3648374/Asia-trip-planned-to-find-buyers-for-Crafar-farms
Cheers
Alex

What else would Key say? He's hardly going to admit to a decision eroding his support.

Fact is that when the farms were tendered as individual farms to kiwis that the total value of the tenders received was substantially below the "chinese and Fay offers". Maybe that would be a different story now that the market has lifted.................

Key has the country in a shambles.  His legacy will be one of failure.
 
He needs to pull up his socks and sort himself out.

Anyone see the cartoon in the Dairynews magazine? Farmers (more accurately, land owners) want to be able to sell their land to whomever they want ( foreigners), but don't want to have to supply foreign owned processing plants??

The fact is that this Dairy Industry has been built to where it is now by a lot of hard work, by Kiwi Farmers, Processors and Sales people over 100+ years. ( I would remind you all that most working Dairy Farmers get up at 4 to 5am every morning, including sundays, to milk the cows, and go to bed at 9pm, during the milking season--250days per year approx)
When it comes to farms an important facet of the Industry, has been the ability of Share Milkers, who have worked their way up from the bottom, and when they have accumulated the capital, they then buy a farm of their own.  They are also accumulating or breeding up the numbers of their cows as well. So usually have their own cows to go onto a  farm.
This Keeps the Industry and Land Ownership in New Zealand ownership and provides a future for our young people in the industry.
For reasons of expediency and money, I suggest-- Korda Mentha -- would obviously want a clean sale to One Buyer, if they could get it. 

A expedient sale to the highest bidder will discount any aspiring sharemilkers I suspect. What are the trends for sharemilking in this day n age (<50:50>23% and equity). I also suspect there are a significant amount of dairy farm owners who would not be able to find the light switch in the dairy, perhaps some of Bernard Hickey's neighbours.

First Citizen Key John Um say all is good in glorious country of Peoples Democratic Kingdom of New Zealand!