NZ to keep farms in reach

27 Feb, 2002 10:00 PM

TOUGH new laws have been imposed by the New Zealand government to keep ownership of its farms in New Zealand hands and restrict foreign ownership.

But while the ramification on Australian farm businesses is unknown, rural real estate representatives expected minimal impact.

Elders Real Estate WA regional manager Malcom French and VNW Independent managing director Steve Vaughan said it was rare for WA growers to invest in property in New Zealand.

Both men said with foreign investment as low as one or two percent in WA, a similar scheme would not be imposed in WA during the foreseeable future.

Mr French said restricting land assets would limit vendors and buyers attaining true market value, which had to be viewed as a negative.

Wesfarmers Landmark Realty state manager John Wilson felt there would be little effect on WA farm businesses.

Mr Wilson said farm property prices were often driven by commodity prices, making it difficult to measure impact of the changes.

Under the new laws, which came into effect recently, New Zealand farms must first be offered for sale to prospective domestic buyers before being offered to foreign interests and the NZ Overseas Investment Commission must consider whether farm sales to overseas buyers will bring substantial and identifiable benefits.

Any sales of land greater than five hectares, or worth more than $10m, has to be approved by the Commission.

The land must also remain on the open market for at least 20 working days before the Commission can consider giving the green light to purchase by foreign investors.

New Zealand Federated Farmers president Alistair Polson said his membership was divided on the issue.

"The new rules could interfere with some deals and put off potential buyers, so from that point of view it's not seen as good. But farmers who want properties to remain in New Zealand hands will see benefits," he said.

In the deep south, Federated Farmers president John Morrison supports the new laws, as a positive move towards greater transparency.

"It means locals can be more quickly off the mark if they see things are heading in the wrong direction, whereas in the past they have often been presented with a fait accompli," he said.

"Decisions which affect people's lives have sometimes been set in concrete months before they knew anything about it. This process disenfranchises rural communities."

There are no real barriers to overseas ownership of farming land in Australia and National Farmers' Federation president Ian Donges said he couldn't see that changing in the near future.

Overseas interests often bought into Australian agriculture, but not to such an extent that it created major upheaval within the farming community, he said.

The foreign ownership also often injected extra capital and innovation into the country's agriculture.

As a result, Australia may even benefit from increased overseas investment which would be scared off by New Zealand's new rules, Mr Donges said.

But many New Zealand farmers appear happy to forgo that investment to keep ownership of their farming land.

Waimahaka farmer Ken Buckingham, who has led a campaign to prevent the expansion of Japanese eucalypt forests in the south-east corner of Southland under the banner of Sustainable Rural New Zealand, said he and his neighbours were unable to make people outside the district see the problems foreign ownership created, as the rural infrastructure broke down and the social fabric of the district was eroded. Now, at last, Government may be thinking in the right direction, he says.

"These amendments have been on the books since 1998, but never enforced. We hope our lobby may have helped to influence the change of thinking, but we are still pretty sceptical, because in the past Government has ridden roughshod over laws which were already in existence."

Some Southland farms were never advertised, and no-one took much notice because farming was so depressed at the time, he says. The country sold off $4.3 billion worth of land last year, and individual private sales to whoever will give the most dollars are still going on.

"I believe there is still a Government mindset in favour of overseas investment, and that there needs to be a whole change of attitude. I wonder just when New Zealand will say enough is enough and demand action from politicians rather than a policy of appeasement to other countries."

Though there have been no more sales in the Waimahaka area since the price of land went up with the farming economy, Sustainable Rural New Zealand is still wary because the Japanese owned Southland Plantation Forest Company has only half the area it wants. Mr Buckingham hopes overseas investment in land will become an election issue.

"We¹ve had our heads down farming, but we intend to crank up our activity again and get local government behind us. This is an issue we will never let go."



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