Germans buy 3,314ha of dairy land

While the subject of foreign ownership of prime NZ land has been done to death, the German investment by AgInvest opens up another subject worth discussing.

AgInvest, a farm syndication and management group report that their syndicates run for 5-7 years and then are either sold or taken over by local managers and investment groups.

Is this the future for our young aspiring farmers, not ownership, but top managerial jobs in low debt, highly  profitable enterprises?

Does agriculture need to leave the drive to ownership behind, and focus on making larger profits so those working in such businesses can be properly compensated?

Have you any experiences of farm syndication, and will they be the norm in the future?

German investors have splashed out more than $100 million in a month buying thousands of hectares of dairying land in the South Island reports Stuff. The Overseas Investment Office published its decisions yesterday on the sale of sensitive farmland during December. In the middle of the same month that it approved 3314 hectares of dairy and dairy-conversion land for sale to German buyers, the office was directed by Finance Minister Bill English to start using two new tests with "high relative importance".

The biggest German investment group to gain OIO approval was DAH Beteiligungs, a holding company owned by the family of Dietmar Hopp, who helped found the business software giant SAP in 1972. The company was cleared to buy five farms totalling 1468ha valued at $53.2m.A second group, listed as Aquila AgrarInvest, D/S Neuseeland Milchfarm Investitions and Alceda Star, won approval to acquire five farms amounting to 1304ha for $37.8m. Two further farms, of 544ha in total in Canterbury, were cleared for sale for $18m to German and Swiss-German investors.

Mr English has said foreign investment can make a positive contribution to NZ through increased jobs, capital and access to export markets. But since controversy over a failed bid by Hong Kong investors to buy the 8615ha Crafar Farms, the Government has acknowledged "genuine public concerns" over some foreign investment in farmland.

The German deals approved by the OIO were structured by local farm syndication and management group AgInvest. Director Cliff King said the syndicates typically ran for five to seven years, after which the properties were either sold or taken over by the local managers and some of the investment groups. The latest group of syndicates would spend a combined $12.7m on farm upgrades, increasing production by between 20 and 70 per cent, he said. "We buy it, we improve it, we ultimately sell it."