The Chinese bid to buy the 16 Crafar Farms has been approved by the government after spending nine months in front of the Overseas Investment Office, which recommended the sale application be granted last week.
Land Information Minister Maurice Williamson and Associate Finance Minister Jonathan Coleman gave their tick of approval to the sale of the farms to Milk New Zealand Limited, a subsidiary of Chinese company Shanghai Pengxin.
The farms' receiver KordaMentha had already accepted Pengxin's bid, conditional on OIO approval. KordaMentha had set a January 31 deadline for Pengxin to go unconditional on the sale, meaning a Ministerial tick of approval was needed before then. Pengxin's bid is thought to be in the range of NZ$210 million.
This is Pengxin's first foray into dairy farming, although it already owns sheep breeding operations in China, and owns a controlling stake in a farming operation in Bolivia producing sorghum, soybeans and corn. It has also been looking at further farming investments in Argentina and Cambodia.
The sale is contingent on Milk New Zealand investing at least NZ$14 million in the properties to make them more economically and environmentally sustainable. The owners must also protect the Nga Herenga and the Te Ruaki pa sites and improve walking access to the Pureora Forest Park and Te Rere falls. An on-farm training facility for dairy farm workers will also be established, Williamson and Coleman said.
The Overseas Investment Office said Pengxin's move to try and get SOE Landcorp to manage the farms, which have a combined area of approximately 7,893 hectares, was a factor in its decision. If Milk New Zealand did not enter into an agreement with Landcorp to manage the farms, the conditions of consent require Milk New Zealand sell the properties. All conditions of consent will be strictly monitored by the OIO, Williamson and Coleman said.
Following the announcement, a New Zealand consortium led by investment banker Michael Fay, which is opposed to the sale and wants to purchase the farms itself, said it would seek a judicial review of the OIO's process for granting the sale.
"The deal between the Crafar receivers and Shanghai Pengxin will effectively make the New Zealand Government a tenant on New Zealand soil to foreign investors," Alan McDonald, a spokesman for the Fay consortium, said in an emailed statement.
Williamson and Coleman said they would not comment on the legal action.
Crafar Farms receiver Brendon Gibson told interest.co.nz that KordaMentha was looking for Pengxin to come to it before its January 31 deadline. The legal action by the Fay consortium would not affect the contract KordaMentha had with Pengxin.
“We just want to get this contract unconditional and settled,” Gibson said.
Labour attacks
The Labour, Green and New Zealand First Parties have also spoken out against the sale of the farms to Shanghai Pengxin. Labour Party leader David Shearer issued a statement saying the sale was "a kick in the guts for Kiwi farmers". (See the Greens' and NZ First reactions below.)
Shearer, who supported the Fay consortium's bid, said Labour was not opposed to foreign investment, but any deal must demonstrate added value for New Zealand.
"This one doesn't," he said.
“Approving the sale of these 16 farms and selling our other valuable assets will leave New Zealand poorer. Kiwis understand that; it is why they are so overwhelmingly against it,” Shearer said.
“Pengxin group has no background in farm management. Landcorp, the Kiwi SOE which itself made a bid to buy the farms, will now be paying a Chinese Government-backed company a touted NZ$18 million a year to rent and manage the farms for it," he said.
This latest decision would be a massive kick in the guts for the local group of iwi and farmers who also put in a bid, Shearer said.
“They were very keen to take over the land and make it productive again. That would have provided jobs for Kiwis, not seen profits disappear offshore," he said.
“John Key has tried to distance himself from the decision. He can’t. In 2010 his Government was talking about how their changes to regulation ‘increased ministerial flexibility to consider a wider range of issues when assessing overseas investment in sensitive land’. Ultimately the decision lies with John Key and his Cabinet."
'Shearer wrong'
Cedric Allan, a spokesman for Pengxin, said Shearer's comment that Landcorp would be paying the conglomerate NZ$18 million a year to rent the farms was wrong.
Pengxin and Landcorp did not have any agreement about management of the farms, and negotiations on a joint venture between the two were about to resume with the hope of reaching an agreement in the next few days.
Allan noted he expected Landcorp would only enter into an agreement if it benefitied the SOE.
Pengxin was delighted to have been granted the sale, he said.
Pengxin would give the Fay consortium time to seek the judicial review before it signed the final deal with KordaMentha.
Met the criteria
"It is clear that all criteria under sections 16 and 18 of the Overseas Investment Act 2005 have been met, therefore we accept the recommendation of the OIO to grant consent," Williamson said.
"We are satisfied that Milk New Zealand's application for consent meets the criteria set out in the Act," Coleman said.
"Milk New Zealand’s acquisition will further support the supply of high quality dairy products into the Chinese market and help set the foundations for further economic and export opportunities with China," they said.
The Crafar farms group was put into receivership in October 2009 owing about NZ$216 million to its lenders Westpac, Rabobank and PGG Wrightson Finance after interest.co.nz revealed animal welfare issues at the farms.
An initial Chinese-backed bid by Natural Dairy for the farms was rejected by the government in late 2010, which was denied on 'good character' grounds. Three of Natural Dairy's executives are now facing fraud charges.
Pengxin announced in April 2011 after launching its bid for the farms that it planned to increase milk production from the Crafar farms by 10% and wanted to capture a bigger share of the Chinese market with branded, dairy-based consumer products. It said it planned to spend more than NZ$200 million to buy and upgrade the farms. It then planned to invest a further NZ$100 million on marketing cheeses, ice creams and baby formula for the Chinese market.
The company would invest money to upgrade the farms, employing New Zealanders to do so, Pengxin said. It has said it is not looking at vertical integration - where it would own all facets of the supply chain - but would rather use New Zealand dairy plants to create and manufacture products such as baby food, cheeses and ice creams.
A copy of the OIO's recommendation is available at:
A copy of the OIO’s Decision summary is available at:
OIO background information is available at:
http://www.linz.govt.nz/sites/
default/files/docs/overseas- investment/oio-background- information.pdf
After a comprehensive review and consideration of the OIO’s recommendation, Ministers were satisfied that Milk New Zealand met all of the relevant criteria in the Overseas Investment Act 2005, and therefore accepted the OIO’s recommendation to grant consent, Williamson and Coleman said.
The "substantial and identifiable benefit to New Zealand" criteria were satisfied by particular reference to the following factors:
· Creation/Retention of jobs - section 17(2)(a)(i)
· Increased export receipts - section 17(2)(a)(iii)
· Added market competition/productivity - section 17(2)(a)(iv)
· Additional investment for development purposes - section 17(2)(a)(v)
· Increased processing of primary products - section 17(2)(a)(vi)
· Indigenous Vegetation/Fauna - section 17(2)(b)
· Trout, salmon, wildlife and game - section 17(2)(c)
· Historic Heritage - section 17(2)(d)
· Walking Access - section 17(2)(e)
· Offer to gift riverbed to the Crown - section 17(2)(f)
· Consequential Benefits - regulation 28(a)
· Advance significant government policy or strategy - regulation 28(f)
· Economic Interests - regulation 28(i)
Economic benefits
Benefits considered by Ministers included the intention of Milk New Zealand to invest more than NZ$14m in the properties to make them more economically and environmentally sustainable.
Milk New Zealand would also ensure protection of two important pa sites (the Nga Herenga pa and the Te Ruaki pa), and provide improved public walking access to the Pureora Forest Park and Te Rere falls. It would also establish an on-farm training facility for dairy farm workers.
Milk New Zealand intends to engage Landcorp Farming Limited (Landcorp) to manage the farms. The Overseas Investment Office considers that the involvement of Landcorp makes it more likely that the expected benefits will occur, Williamson and Coleman said.
"In addition, Ministers have imposed comprehensive conditions of consent on the company to ensure that the benefits proposed by Milk New Zealand are delivered," they said.
The conditions
Conditions of consent imposed by Ministers include the following:
· The individuals with control of Milk New Zealand must continue to be of good character
· Milk New Zealand must invest a minimum of NZD $14m in the properties
· Milk New Zealand and their associates must not acquire an ownership or control interest in milk processing facilities in New Zealand unless a 50% or more ownership or control interest in those facilities is held by non-overseas persons
· Milk New Zealand must establish an on-farm training facility for dairy farm workers and must meet the capital cost of establishing this facility
· Milk New Zealand must give two scholarships of not less than NZD $5,000 each year to students of the on-farm training facility with the first two scholarships to be awarded by 31 December 2013
· Milk New Zealand must use reasonable endeavours to assist Landcorp to extend its business to, and market its products, in China
· Milk New Zealand must provide public walking access over Benneydale Farm and Taharua Station, in consultation with the Department of Conservation and the New Zealand Walking Access Commission
· Milk New Zealand must take reasonable steps to protect and enhance existing areas of significant indigenous vegetation and significant habitats of indigenous fauna and flora on the properties
· Milk New Zealand must register a heritage covenant in respect of the Te Ruaki pa site on Tiwhaiti Farm
· If required by the Office of Treaty Settlements, the Applicant must transfer the Nga Herenga pa site (approximately 1.6ha located on Benneydale Farm) to the Crown for nil consideration.
Milk New Zealand agreed to all conditions of consent imposed by Ministers, Williamson and Coleman said.
Satisfied business experience and acumen requirement
The Overseas Investment Act 2005 requires the individuals with control of the relevant overseas person to collectively have business experience and acumen relevant to that overseas investment. The level of business experience and acumen required to satisfy this condition may vary according to the nature of the investment. In this case, the overseas investment is the acquisition of a large corporate farming business. The Ministers considered that the individuals with control have sufficient business experience and acumen to operate a large business of this nature, Williamson and Coleman said.
"Milk New Zealand is a subsidiary of Shanghai Pengxin Group Co. Limited, a fast growing international agribusiness which includes investment in sheep breeding, wheat, soy and maize production in China and South America. Shanghai Pengxin has obtained advice from leading New Zealand consultancies such as Perrin Ag, Landcorp and PwC. Shanghai Pengxin will also employ two New Zealand directors and an independent chairman to the board of Milk New Zealand," they said.
Was the Ministers’ decision influenced by New Zealand’s Free Trade Agreement with China?
The decision was not influence by New Zealand's free trade agreement with China.
"Ministers were satisfied that Milk New Zealand met all of the relevant criteria under the Overseas Investment Act 2005. Ministers can only have regard to the criteria and factors outlined in the Overseas Investment Act 2005. Every application is decided on its individual merits and the outcome would be the same even if New Zealand did not have a Free Trade Agreement with China," they said.
Foreign land ownership
In the last two years, consent was granted for overseas persons to acquire 357,056 hectares of agricultural land.
Consents granted involving agricultural land by country of majority ownership, are:
· United States to acquire 25,306 hectares of farm land
· Germany to acquire 6,834 hectares of farm land
· Switzerland 9,727 hectares of farm land
· Australia 3,861 hectares of farm land
· United Kingdom 22,600 hectares of farm land
· Hong Kong to acquire 759 hectares of farm land.
Excluding Hong Kong, there were no other consents granted to Chinese investors to purchase land for agriculture during the last two years, the Overseas Investment Office said.
Long time coming
Milk New Zealand’s application was extremely complex due to the number of properties involved, with each having its own unique issues that the OIO needed to consider, Williamson and Coleman said.
"For applications like Milk New Zealand Holdings Limited, the OIO aims to make decisions within 70 working days, excluding the time it takes for an applicant to provide information requested by the OIO and for Ministers to reach a decision. The OIO took a total of 54 working days to assess the application and Milk New Zealand took 123 working days in total to provide information requested by the OIO," they said.
Reaction
Alan McDonald from the Fay-led consortium
Ministers Set Up Open Season on New Zealand Farmland
The decision by two Government ministers to sell the Crafar Farms to the Shanghai Pengxin Group is wrong in law and, if not overturned by Judicial Review, sets up open season for any foreign buyers wanting New Zealand land, the Crafar Farms Purchase Group said today.
The Group is the highest New Zealand bidder ($171.5 million), offering $21.5 million more than the Government’s farming SOE, Landcorp.
Following today’s ministerial announcement approving the sale to Shanghai Pengxin, the Group confirmed it would proceed with a Judicial Review launched earlier this week to try to stop the land from being sold offshore. The deal between the Crafar receivers and Shanghai Pengxin will effectively make the New Zealand Government a tenant on New Zealand soil to foreign investors.
The Group also confirmed that, if it is successful and becomes the owner of the farms, it will divide them amongst its members, which consist of local Central North Island farmers, iwi groups and Auckland businessman, Sir Michael Fay.
No member of the group would own more than two farms and all are happy for legal restrictions to be placed on the farms’ title preventing, in perpetuity, their subsequent sale to foreigners.
A member of the purchase group, Hardie Peni of Tiroa E and Te Hape B Trusts, said his people were “dismayed but not deterred” by today’s ministerial decision.
“All public opinion polls have been overwhelmingly against the Shanghai Pengxin bid, with more than 80% of New Zealanders against the sale of large parcels of productive farm land to overseas buyers,” he said.
“This is one issue where all Kiwis, Maori and Pakeha, urban and rural, stand together. Kiwis are right to be mightily concerned that this National/Maori Party Government has stood by and waved foreign buyers through our farm gates.
“Last November, during the election campaign, Prime Minister John Key was only concerned about public opinion – but he now says public opinion does not count in this decision. The result is that all New Zealanders, and in particular Kiwi farmers, have been shafted.”
Mr Peni said Shanghai Pengxin has no background in farming.
“Shanghai Pengxin is just an agent for the Chinese Government and if it can get approval to buy Kiwi land then any foreign company or government has a free hand to buy whatever farmland they want in New Zealand. No Kiwi farmer could compete against this sort of international money and diplomatic pressure and stay in business.”
Another group member, Sir Michael Fay, who will own two of the 16 Crafar Farms if the purchase group’s proposal is successful, said the group had no choice but to seek a judicial review of the ministers’ decision.
“Back in September 2009, Finance Minister Bill English was justifiably boasting about law changes he had achieved to allow ministers to veto OIO recommendations for large-scale foreign buyouts of New Zealand farmland.
“That two ministers have failed to apply Mr English’s laws properly makes a mockery of his boasts.”
The purchase group also argues that the ministers’ decision would have been wrong in law even before Mr English’s amendments.
Group spokesman Alan McDonald said Shanghai Pengxin did not meet the criteria for overseas investment in New Zealand.
“By its own admission, Shanghai Pengxin Group does not have experience in dairying which is why they are trying to use the New Zealand Government’s own SOE, Landcorp, to put the veneer of a Kiwi face on this deal. The fact that Shanghai Pengxin does not have this dairy farming experience makes them nothing more than a passive investor and on this basis we believe the application should have been rejected.” he said.The Crafar Farms Purchase Group Judicial Review claim was filed last Tuesday and is expected to proceed next week in front of Justice Miller in the Wellington High Court.
Green Party
Crafar decision short-sighted
The Government’s decision to allow foreign ownership of the Crafar farms is not in New Zealand’s interest,” said the Green Party today.
“As food prices rise globally, selling off our productive land − such as the Crafar farms − to overseas bidders is economic folly,” said Green Party Agriculture spokesperson Steffan Browning.
Mr Browning was responding to the Government’s decision today to allow the sale of the 16 Crafar farms to a subsidiary of the Chinese company Shanghai Pengxin.
“Foreign ownership of the Crafar farms means that the profits will flow overseas, adding further to our current account deficit. In the 12 months to September 2011, $15.2 billion flowed out of NZ to overseas owners of NZ companies and debt,” said Mr Browning.
“The sale of the Crafar farms to Shanghai Pengxin contributes to the foreign land grab New Zealand is experiencing.
“One of the dreams of sharemilkers is to save enough money to buy some land and become a dairy farmer. But that dream is fast disappearing as the price of land is driven up, in part, by overseas corporations buying up land.”
The Green Party has a policy to ensure that New Zealand land remains in New Zealand ownership. Green Party Co-leader Russel Norman introduced a Member’s Bill in 2010 which rules out overseas ownership of farmland over 5 hectares.
“This simple measure would take some of the pressure off rural land prices, making it easier for New Zealand families to buy a farm, and will also help our current account deficit, as more profits will stay in New Zealand,” said Mr Browning.
“The decision to allow foreign ownership of the Crafar farms is short-sighted. When it comes to our productive farmland, we must keep it kiwi.”
New Zealand First
New Zealand First has described the sale of the Crafar farms to the China state owned company Shanghai Pengxin as economic treason.
Rt Hon Winston Peters says the sale announcement was delayed until after the election because John Key did not have the guts to tell New Zealanders he was selling their country out beneath their feet.
“New Zealanders have every reason to feel outraged and betrayed. Our country is being run for the benefit of foreign companies and the international money industry.
“We call on every concerned citizen to flood the Prime Minister and every National MP with messages of disgust at their lack of loyalty to the country they live in.”
Mr Peters says even the way the farms were sold stinks because every dairy farmer in New Zealand knows the best way to get a good price for land is to offer it to the neighbours.
“The farms are spread over a wide area yet they were offered as a single block. This makes absolutely no sense and there is outrage in the rural sector about the way this deal is being handled.”
Mr Peters also says New Zealanders have the right to be told all the details and the politics of the sale of the Crafar farms so they can get a true picture of the way the country is being run to suit vested interests.
“This is a bitterly sad day for New Zealand and there is more to come with our profitable power companies next on the block.”
(Updates with reactions)
173 Comments
Try allowing new HOUSING developments to pass raw land costs on with minimum "planning gain", to Kiwi first home buyers. How about THAT, NZ politicians?
Hugh Pavletich has been right all along. Eliminate "planning gain" and upfront levies, and you get $50,000 sections and new homes not a lot over $200,000. (Fund infrastructure with bonds).
You also get no house price bubble, and old "fixer upper" and "trickle down" homes are under $100,000, like they SHOULD be.
ALL the excuses made by advocates of urban growth constraint are invalid. The aggregate cost to young 1st home buyers is far greater than amounts allegedly saved on infrastructure. The alleged reductions in emissions do not occur because the higher house prices go, the LESS people can afford central locations (and the price premium is ALWAYS greater than what can be saved on transport). Traffic congestion is WORSE with the same number of people in a smaller space.
"Preserving farmland" is absurd when urban economies produce hundreds of times the income per acre, and you export food most of the time as a "price taker". As for "running out of land", NZ is about 0.4% urbanised and the planet is about the same. All 7 billion humans could fit on Tasmania at Hong Kong densities; on Texas at current average densities; and on Texas plus California at LOW densities (like Houston). That still leaves a LOT of planet to grow food and extract resources.
Wally, watch the back bench National party Mp's. They are watching this goverment put them back into opposition for a long time. The old guard is just loving itself to bits, Brownlee, English, Carter,Key, Dunne,Banks Lockwoodsmith and so on, all retiring next election. Whats in it for the poor bastards in the back benchs. Lets see if they have the balls to actually represent their electorate for a change and cross the floor..
Milk New Zealand must use reasonable endeavours to assist Landcorp to extend its business to, and market its products, in China
WTF does this mean? Aj et al - any comments? It will be Landcorp not Shanghai Pengxin selling and marketing milk, ice cream etc in to China???
Depending on the terms of the management contract, it isn't necessarily a bad decision. Whether the govt can effectively enforce the clause if Landcorp withdraws from management of the farms remains to be seen. If they did there would probably be some sort of fall out for NZ businesses in China.
The 'benefits' for NZ are flaky somewhat given that they would probably occur regardless of who owned them:
- Many of these farms are Fonterra suppliers. It could be assumed that they will sell the shares and supply the likes of Miraka, so the $14m of investment (which will be needed) will pretty much be paid for by selling the shares.
- The 10% increase in production will simply get them back to where they were before the receivers took over.
- Any dairy farm employing particularly young, staff is in effect a training facility. The requirements are housing, and a meeting type room - either at the cowshed office area or part of single staff accommodation - no big expense there as employees have to be housed anyway.
- Many farmers reimburse the cost of successful training/professional development for farm staff. The $5000 scholarship would be more than the usual $2-3k a farmer would invest in less experienced staff.
- Walking access - what is expected these days
- Flora and fauna - many Regional Councils already require this to be protected so again it is what one would expect. They may even qualify for funding from Farm Biodiversity fund.:-)
- Who is the training facility going to train - Chinese workers for Landcorp/Shanghai Pengxin China based investments or ordinary young kiwis wishing to go farming?
- Who is going to run this training facility - Landcorp or Perrin Ag who consulted on this?
- Having had a family member go through Landcorp training via their sheep/cattle farms, I was most impressed with the robustness of it.
Given the condition of assisting Landcorp in any of its China business I think the real question that has to be asked is - What is Landcorps plan for business/investment involving China going forward?
These are not farms first farm buyers would buy - investors perhaps, but not young farmers.I am more concerned at the Germans buying up a number of 400-600cow farms. This sized farm is what young farmers would buy as a 2nd farm. Take these farms out (thanks MyFarm-not!) and it puts the brakes on the farm ownership pathway for young farmers.
I say NZ should restrict the sale of land regarding foreign nationals in nations that themselves do not allow land owners freehold title - eg China.
But we should be perfectly happy with Aussies buying NZ land, and nationals from any nation with similar values to ours, and similar access to OUR citizens buying THEIR land. Why start stupid "tit for tat" regulatory wars with our friends?
You are right Gummy, as long as the sun goes up in the morning, even on a rainy day – NZ is good as gold.
..and as long we have arms long enough and a full belly – who gives a rat’s arse.
What do you think Roger, when we have in this country increasingly decisions made by the government, which are in contrary to the majority of the NZpublic ?
..and Roger when the government makes decisions, which only add to a megalomaniac economic excess of more debts, more environmental damage, health risks, unemployment, pollution and costs to our society. Roger - isn’t time for rethinking economics for a small, remote and under- populated country ?
Roger - why should New Zealand not stand out, but be like any other country ?
Wollongong .... or Woolloomooloo ? ..... I always get those two mixed up , 'cos one is where Spike Milligan's mum lives , and the other isn't ....... but I doubt that she'll beat your Rocher Ferroro in a chuka of tennis , even if that wild Spaniard Referee Nodule can . He has a bigger bat , so I am informed , or meebee that's his mother ..... I thought they used sticks or clubs ....... or is that contact bridge ?
...... anyhoo , the little Boss is happy , we just wached a tuna filleting display . A 25 kg. sthn blue-fin tuna sliced down to sushi & sashimi sized pieces in just 20 minutes !
Say something about money , or the world going to hell in a hand basket , or Hickey will have us banned ! ..... Geez he's a grumpy bear , that one . Probably no good at tennis , or the shortened version , 20 / 20 ......
Roger - I heard red wig bearded Scot Andy Murray’s vigorous mummy likes big batting mussly Nudeole, hitting a 100+ mostly over the stadium. She has even taken some pictures of him in Wimpelton.
Toykowitch vs Spanish Nude-ole is the Champ - I say 98 : 114.
Yeah – these well behaved Asians are ferry, ferry quick – they buy one farm in 20 minutes and many others, with Key and other small and big fortuniture (bulls/ cows) included.
She’s a fast world - once turning the Key and it open the door for paradise - and it is bloody all over.
I see a 7+ "Sushi wobble"
Woy Woy's where Wagga Wagga was , wasn't it , Walter ?
...... were's Fay today ? ...... Fay dunaway with his lawyers , at last ...... blast !
Feck it , no point in crying over spilt milk ..... get down on the floor and lick it up !
Dorkovich to beat Nodule in the last innings of the tennis tonight , Walter ?
Guys, guys...relax. Chinese ownership isn't anything to sweat - though they own it, unless they put the world's largest embassy on the land, it's still 100% subject to NZ laws. They'll have to employ NZ resident workers, comply with our environmental and animal welfare laws, and pay tax just like anyone else. The only difference is who'll call the shots regarding where the remaining profits end up and what kind of production they might choose to focus on.
Less impressive, of course, is the hypocrisy where a Chinese national is allowed to buy land in NZ, but a NZ national would struggle to do the same in China. Quid pro quo, I say.
Apparently their going to hire 50/50 sharemilkers to operate the farms so there should be some good opportunities for young kiwi farmers to get a leg up due to the size of the milking platforms and shouldn't be to hard to bet the previous owners record on enviromental and welfare issues should it?
Just gossip at this stage Aj but they now have a substantial land portfolio that will need managing and Shanghai Pengxin have been quite clear their intention to increase production which will need a comprehensive plan and will need to be well managed and followed through on. Ironical this is probably a good area for Landcorp to be in as it can add alot of value without needing to be the "farmer"
PI_Rimmer, you said it.
NZ is a sovereign country and can always take land back if it was justified (the owners spying, etc).
It always baffles me that Kiwis are so mistrusting of Chinese land buyers, yet so agnostic on defence and alliances.
Land in China is 50 year leasehold anyway. I say we should do quid quo pro, and apply conditions to any foreign national that apply in their own country. We shouldn't start tit for tat regulatory wars with our friends.
what's wrong with it?
It's a 50:50 ownership. Conditions of consent are very stingy. Landcorp manage and operate the farms. We got the captial and we got the jobs.
What the fxxx else do you want? You want to sell it to Michale Fay and let him earn a handsome $30 million instantly?
The banks should have been forced to take a 30m haircut. They could have considered it the price to pay for being able to operate in civilised country like NZ. Why don't you look sometime about how property transactions of this scale happen in China. It usually involves a lot of corrupt payments and villagers being forced off thier land by a group of thugs.
And now they are here.
That's what's wrong with it.
"In the last two years, consent was granted for overseas persons to acquire 357,056 hectares of agricultural land.
Consents granted involving agricultural land by country of majority ownership, are:
* United States to acquire 25,306 hectares of farm land"
That's more than 3 crafar farms sold to the states in the last two years alone. Are you suggesting the states is corrupt free, and we have no problems selling to them?
if anthing to get by, this is the strictest set of rules I've seen regarding OIO decisions.
apparently they know it's not gonna be a popular decision. they have to make sure if anything goes wrong they have a safe net (i.e. on good characters). i don't think they required good character on Shania Twain.
someone would rather a rich prick (as long as he has nz residency) to make a low ball offer - which is actually about 40 million less than the hk company and this chinese one. OIO was between a rock n a hard place.
The Americans whilst not perfect, have managed to construct a judiical system that does not involve a 1 day trial and being taken out and shot in the back of the head.
Penqxin is a Chinese State controlled company, they believe in and are responsible for, the above example. You think that constitutes 'good character'?
that such a stereotype
"1 day trial and shot in the head", are you living in the 80's?
and you blaming a civilian run enterprise for your stereotypes? tell me how you found out it's a "state controlled" cause I couldn't. only USA has more billionairs than China now and you still believe everything is "state controlled"
and last time I checked, the yankees have both "most ppl in prison", and highest incarceration rate, call that "good character".
In this article, about para 5, under the heading Labour Attacks, did you read it at all?
“Pengxin group has no background in farm management. Landcorp, the Kiwi SOE which itself made a bid to buy the farms, will now be paying a Chinese Government-backed company a touted NZ$18 million a year to rent and manage the farms for it," he said.
Unless we only allow NZers to buy land, and change our laws, the chinese, and anyone else have every right to buy our land, conditional on the OIO.
Does make me wonder whether the Auckland international airport sale was blocked though, as that was far less land, and we can always setup another airport if the government needed one.
Actually the vast majority of the dairy farms in NZ are owned by New Zealanders. The majority of Fonterra suppliers, supply 200,000kgs or less. This size = family farms. So the majority of suppliers in the biggest dairy company in NZ are smaller family owned farms. We don't hear about these as they are not newsworthy. BUT these smaller farms are now attracting the attention of Europeans and MyFarm because they can be very economically efficient. The big plus they have over larger farms is staff reliability/continuity.
I know a group of young kiwi farmers <30yrs old. They are some of the most motivated young people you will meet anywhere. They all are 50/50 sharemilkers and interestingly most have 'had a life' and had an OE.. One of them <25yrs, is taking on an equity stake in a dairy farm and will have a $2m mortgage.
Nowhere else in the world is there a pathway for young dairy farmers like there is in NZ. If as NeilD says that they will be employing 50/50 sharemilkers - what's the problem? There are fewer 50/50 jobs out there these days so 16 more will be good for young kiwi farmers.
Don't know freehold numbers. I understand around 80% of farmers are not in real strife. But a % of them may struggle under $5kg/ms. To put it in perspective I believe there are around 14,000 dairy farmers, so if 20% are in strife that is 2800. While that is a large number it is not a significant number in the scheme of things.
I spoke to the bank manager today and he was saying the costs of farming are rising. Now at over $3.90kg/ms. I think that is an increasing concern for the banks. They also said that farmers are paying down debt rather than expanding unless they are well capitalised.
Go to dairynz.co and look under financial. Don't remember the farm figure but for 2010 6% of sharemilkers had no disposable income.
Wrong place goto http://www.dairynz.co.nz/page/pageid/2145871209/DairyNZ_Economic_Survey…
Maybe in the very short term, but it will not be long before young Chineese imigrants will go through our training institutions and take up these sharemilking positions. That way they will be able to go on and compete with young NZers to buy NZ farms as individuals and face less resistance from the foreign ownership regulations, should they be tightened. Foreign purchases will raise farm prices and make it harder for young Kiwis. I guesse this will suit current Kiwi farm owners but will ultimately sell the country down the river.
are you saying immigrants are not new zealanders (provided they have "good character" and settled down permanently)?
why does that sound so wrong?
farmlands the size equivalent of nearly 50 crafar farms were sold to overseas in the last two years yet ppl can't move their eyes away from "Chinese"...
I suspected that the word "chinese' somehow triggered many angry responses. If "Chinese" was replaced with "english" (or related european race) it wouldn't raise an eye brown! Typical NZF stuffs
Kiwis need a mighty big pot of crack filler !! China might sell us some...
I would always put the interests of the children of this nation ahead of foreign Nationals any day, whether they are American, German, English or Chineese. The Chineese would do exactly the same and one can only respect their loyalty to their own people in this regard. (perhaps not so in others)
They might be, on the other hand they might identify with China and Chinese society while taking advantage of their langauge skills and links to local realestate to hawk land to the incoming population. Are you saying that sort of person is a New Zealander? I suppose the point is that in some peoples eyes other New Zealanders suck (for me it is eg the Harcourts Shanghai agents who flog the best parts of the country off as though it were cheese).
I don't beleive that will happen Chris-M. Sectors of chinese society wouldn't be seen swilling around in effluent. I have worked with Chinese on farms in China - it is a completely different culture farming there, to here. To make the changes required to farm like we do in NZ, will take more than a generation mainly due to ingrained cultural differences.
Chinese immigrants are already going through our training institutions. Don't see too many of them down on the farm, though.
Young NZers who really want to own a farm find a way to make it happen. Those who complain about how hard it is etc usually aren't prepared to make the sacrifices required to acheive it. They expect it to be 'easy'. Some young farmers are choosing to remain large herd managers. I know of one earning $180k. Why would you want to own a farm if you can earn that, have guaranteed holidays, sick leave etc? :-)
By the way, are you a young disenfranchised young farmer or someone commenting from the sideline?
It is another bloody big monster - remember Pike River ?
Chairman moa - we cannot minimise/ reduce our economic and financial sovereignty, by inflating our one-sided economy sectors further. Considering the worldwide situation, our environment, employment opportunities - long term I cannot see benefits from big foreign companies running shows in NZ – the opposite.
I don't think you are anwering my question. As example, noone is jumping up and down when the American/Canadian bought huge amount of land down in central Otago.. much larger than the Crafar farms.
I am against the idea of NZers are becoming tenants in our own land BUT interested why there are so much angry responses because of 'chinese' buyer. Hate to say it but the skin colour had a lot to do with it.
Of course I answered your question – in my opinion it doesn’t matter where these big foreign companies come from.
More info’s on:
Shanghai Pengxin Group Co., Ltd., an industrial conglomerate, engages in real estate development, agribusiness, mining industry, infrastructure construction, and investment businesses. The company, through its subsidiaries, develops and operates residential, commercial, retail, and office cum residential properties, as well as hotels and resorts. It also offers house maintenance, garden construction, equipment leasing, and interior design services; and holds investments in industry and commerce, including sports centers and hotels. The company was founded in 1997 and is based in Shanghai, China.
http://www.iese.ac.mz/lib/saber/fd_1636.pdf
The song, which is too big for NZ – la, la, la - next question, who runs the council in Taupo in 2014 ?
I'll explain my angry response, Chairman.
I have seen first hand the exploitation and degradation of small Pacific Island states by the chinese already.
You ever wonder why during both the Tongan and Solomon Islands riots, the first targets were chinese owned buisneses? I'll tell you why, it's because the locals hate thier guts. And the reason is because the locals get treated like dirt by the chinese.
Didn't start like that of course, but as the trickle of chinese investors increased, so did the local powerbase of the chinese, and then before you knew it , the chinese embassy started making politcal based donations, and all sorts of things flow from that.
This a first hand experience, I have lived , and done buisness in the Islands for more than a few years.
So you see it's not an issue of skin colour, it's a matter of taking on board how the chinese have behaved towards our not so distant neighbours, and not wanting that happening here.
"Mr Peters also says New Zealanders have the right to be told all the details and the politics of the sale of the Crafar farms so they can get a true picture of the way the country is being run to suit vested interests"
...So is Winston heading to the highcourt to help out Michael Fay...now that would be a great photo op!
You know .. for the edification of the newcomers here (to nz that is) .. it would be most enlightening if the scribes here (maybe Tony Chaston) (hey David do you have any influence there) interviewed an old-time markets person and explain why, farming being a substantial part of the backbone of the nz economy, there are no corporate farming conglomerates listed on the stock exchange .. and from memory there never have been .. maybe 1. Perhaps GBH who is a long-time dabbler in such matters could explain. GBH, are you a buyer of Shanghai Pengxin shares on the Shanghai Stock Exchange?
No , I buy on the HK stock exchange : Easier to trade , and more robust regulations on listed companies than mainland PRC bourses ......
..... we have had a few farming conglomerates listed on the NZX in the past : None of them performed very well . Although Gummy made a killing on Cashmere Pacific ( I got out before it crashed ! ) , Tasman Ag was a low flier , as is Uruguay Farming systems currently ........and there were a few forestry companies , Opio & the like , Carter Halt Henry , Feltcher Forests of course ... and the fishers , Regal Salmon ........
Brian Gaynor is the fellow to write up such an article for you . He has an encyclopeadic knowledge of NZX listings past & present .
Tasman Agriculture was listed iconoclast. Dairy Holdings bought up the NZ farms and New Plymouth District Council I believe now owns all the Tasmanian assets of TasAg. The links below are a bit old but show how Tasman Agriculture was split up.
http://www.scoop.co.nz/stories/BU1009/S00098/new-plymouth-district-seek…
http://www.dairyholdings.co.nz/contact.html
The problem with farming is the volatility of income/profit. The weather is the biggest determinate of profit and the thing you can do least about. Therefore for investors who want a return on investment, some years it would be negative and others too low to be truly acceptable. It can be much harder for corporates to tighten their belts than a family run farm. Note that MyFarm syndicates usually have a life of 5-7years and they factor capital gains in to their 'possible returns'. After 5-7years farms usually need an injection of capital and by then any tax loss made as a result of stock writedowns is coming to an end.
Farming is a price taker game, not a price maker game. Processing milk is a price maker game, hence why the significant majority of farmers supply a cooperative.
Be warned .. China learns fast .. over the past 5+ years the 3 mining majors, all European controlled, have extorted massive profits out of the Chinese iron-ore importers, and on one occasion RIO shafted the chinese in a side deal, to the point over the last 2 years the Chinese have publicly stated they dont enjoy dealing with monopoly suppliers who hold them to ransom, and have seriously started aquiring all small mining houses that are available. The objective is to cut out the middle man and get the product at least cost. There are currently $1 billion of aquisition proposals sitting in the FIRB's (Foreign Investment Review Board) in-tray waiting approval. Who is the monopoly supplier of NZ milk products to China? Crafar is just the start.
Fonterra has a cap on owning voting rights. Well, they have until the current government decides to legislate against it ;-)
If they continue to buy up farms then that pain in arse to Fonterra suppliers - DIRA - will cease to be implemented.
It's the ability to make and market their own product where they will make money. Wouldn't surprise me if they make tax losses on the farms - and aren't too worried about it - as they will more than make up for it in their sales in China. Synlait said they will be selling infant formula for $80NZD a tin. Has to be a handsome profit in that especially if there are preferrential deals regarding import duty etc for them.
Half of those farms are pigs....600 to 750 metres above sea level, others are drought prone, most are infertile pumice. They are rundown, their cowsheds are poor....the chinese have been foolish, there are plenty of much better farms out there for sale. And they paid over the odds...still they got their little slice of enzed, now will they ever make money out of it? I know who will.....the consultants, the electricians, the builders, the fencers, the vets, the managers, the scanners, the ab techs, the stock agents, the local rustlers....all new zealanders
To add to my comment, over the years I have seen many farming outfits come and go in my area. All spend big money when they first buy in.....they all redo the water reticulation, a good bit of fencing, spend money on the yards, and the housing. Then it comes to a halt as the money runs out and the income is less than budgeted. Then no money is spent, employees are let go, then the property is onsold....and the cycle begins again.
Indeed , exactly as the Japanese did in New York in the 1980's ..... they paid over the top for alot of high profile ( but badly run down ) commercial properties ...... only to bail out a few years later , offering the locals steep discounts .......
..... if we can get over our xenophobia ...... and study this with an emotionally detached business acumen , we may take the Penguins to the cleaners , if we're patient .......
Can the Chinese economic miracle last ? ...... the Japanese one didn't , yet we were 100 % confident that the aggressors of WW II , Japan & West Germany , were taking over the world by mercantilism , in the 1980's ........
........ imagine the " ker-thud " to the Chinese economy today if their currency was freely floated ........ they can only cheat the system for so long , just as the Eurozone is discovering , with the antics of Merkel's Germany ......
Taking all the milk to a central point to be made into infant milk powder (which is a highly specialised and skilled manufacturing process) is probably not on the cards with the distances between the farms involved, so it will be interesting to see exactly what their plans are... It doesnt matter how good a businessman you are, farming is a difficult business to profit from. Mother nature brings you drought and pestilence at the best of times. Large scale dairying is not for the faint hearted.
No ego/social boost for owning ex Crafer farms; Belles right, some of them are in very hard country. Given the money they paid for the land, development costs (14 mil) and costs to run corporate farms (land corp ticket clipping) this transaction was not for generating return on investment. If they are as minister Maurice claims, 'credible with business accumen' (like Michael Fay, haha), then they have a longer term, grander vision, than owning dairy farms, and supplying milk powder to China via locally operated (and owned?) processors.
Of course its possible the cooler temps and free draining pumice could be exactly what they are after. Maybe feedlotting could be in their vision. Going to all friesian cows, rearing the offspring, fattening on feedlots. With the money of the chinese govt behind them, its within the realms of possibility. We are all taking for granted they stay dairy farms, with lamb and mutton at historical highs, and beef taking off, they may be inclined to add some feedlots to the dairy mix.
I have no idea Cas Ob, I was in the Rangitikei last year and the regional council was making it difficult for them to have a certain number of animals grazing on a per ha plot. I thought that was ludicrous at first but after some thought decided it made sense. We have industrialised farming practices in certain elements of farming so we should abide by industrial rules. As for where they would get the feed, darno... canterbury where they do so much more cropping is the sensible place to feedlot. The feedlotting was just a thought. We really dont know what their plans are and perhaps we take too much for granted.
Was talking to a friend who dairys on the West Coast. The Coast farmers source a lot of their feed from Canterbury. They said it was becoming harder and harder to source due to more dairy going in due to Fonterra Darfield and Westland chasing suppliers 'over the hill'.
Environment Southland work on 2.3cows/ha for dairy. It is guide when considering resource consents rather than a hard and fast rule. I think it is the way all regional councils are going now - putting some figure around number of cows/ha.
This Horizons RC rule was different, like you couldnt graze more than say 100 cows per ha at one time.....my figures are just a guess, but you get the point, the old rotational grazing, which every farmer does was suddenly being looked at.... someone else here may know more. And yes I had heard the cropping farms in Canterbury were rapidly turning into dairy farms.
Despite all the banks restructuring of distressed farmers, the overall rural debt hasn't changed much from the peak of rural lending,following GFC. Banks and farmers are still in a rock and a hard place, and with still more changes in bank regulations to roll out over the next 4 years there will be an ongoing rationalization of bank rural debt. The only ones to have benefited from Crafer farm receivership is the receivers.
The issue here is really how are the rest of the forced sales of farms going to proceed when there is still a lack of capital for investment which I don't see changing in the distant future.If it wasn't for an improved payout there would have been many more farmers under the hammer and as someone said cost of production is $3.90 plus interest and principle there isn't much left over for reinvesting.
As for sheep and beef the forestry carbon faming adding an injection to hill country sales will be non existant this year with Carbon value dropped to $6.25 a tonne from $18- $20 late last year.
I am still dealing with financially distressed farmers and negotiating exit strategies in a more humane manner with banks and receivers.National bank for example is trying to reduce its rural portfolio by categorising farming business into three groups, The top group they will support ,the middle will be supported to a certain extent but will be paying higher financing costs comenserate with perceived risk and the lower third will be in strategic management with the view to moving those farm businesses on one way or another, so overall the issue of rural land for sale and who can afford to buy is going to carry on.
The other worrying issue is the difficulty in young farmers wanting to purchase the first farm. Bank requirements are such that the level of equity is higher and while the land values have dropped the price of breeding stock has sky rocketted, another problem lurking.
Thank you for your insight Janette. I noted a caller to radio live this afternoon. He owed I think about 2 mil and the value of his farm was circa 2 mil. It seems 3 years has seen little movement in resolution. The tax cost to repaying principal is also a huge roadblock to moving forward.
Was he one of those cashflow positive, equity negative, situations, Belle? As you say the cost in tax liability in paying down debt can be overlooked at times and misunderstood. I would have thought it would be in the banks interest to leave those profitable farmers where they are, after all they aren't costing the bank anything - unless they are forced to sell.
If there are still approx 20% of farmers in financial distress in dairy alone that could be 2800, so I guess there's still a lot of farms to come to market. Problem is NZ farmers are somewhat leary of taking on more debt so the only buyers will be foreigners.
It is no surprise, Nats were expressing their intensions to sell assessts and this is consistent with their appraoch, people voted them in ,now no use crying. Nats are working for banks, PI, and rewarding their mates wherever they can. I am not a leftie so to say , I have been voting for NATs but last election I did not vote for Nat due to their assesst sale agenda. They need to be booted out, the difficulty there is no better option, Lab are equally bad in other ways.
An even more insidious purchase is the Asians buying up multiple properties in Auckland and preventing genuine young home seekers from getting access at more realistic prices.
Just look at some of the more affluent suburbs and watch as they deteriorate with little or no maintenance done.
Asians may still not be aware of coming problems with tax because they do not care as they probably do not show up on the IRD screens
How does Landcorp reconcile managing a large scale dairy farm in the Lake Taupo Catchment after themselves exiting the catchment in 2007, by selling their sheep and beef farms for around $6000/ha, which have subsequently been converted to dairy and dairy support, by someone much smarter than their corporate management persons!!!!
What's going to be the next move; National selling landcorp to Pengxin? Why is the government involved in commercial farming anyway? I would guess they could run a power company more successfully than a farm. What is John Keys aspirations for Land Corp?
How does Landcorp reconcile managing a large scale dairy farm in the Lake Taupo Catchment after themselves exiting the catchment in 2007, by selling their sheep and beef farms for around $6000/ha, which have subsequently been converted to dairy and dairy support, by someone much smarter than their corporate management persons!!!!
What's going to be the next move; National selling landcorp to Pengxin? Why is the government involved in commercial farming anyway? I would guess they could run a power company more successfully than a farm. What is John Keys aspirations for Land Corp?
I don't know what the ruckus is all about. The Chinese are buying only 7893 hectares compared to :-
· United States to acquire 25,306 hectares of farm land
· Germany to acquire 6,834 hectares of farm land
· Switzerland 9,727 hectares of farm land
· Australia 3,861 hectares of farm land
· United Kingdom 22,600 hectares of farm land
· Hong Kong to acquire 759 hectares of farm land.
This screech by Williamson of 'racism' is disgusting, it is designed to deflect any legitimate debate as being particularly anti Chinese... this is NOT the case. I believe that most Kiwis would be angry no matter which foreign country was allowed to purchase our farms. And unti now most of us did not know how much was being flicked off to whoever showed the money.
These under hand deals to sell NZ to the highest bidder are tragic and will have ramifications for generations to come. Soon the country will be pretty much foreign owned and JonKey will be retired in Hawaii.
That said, you voted for him... you suffer the consequences...
Surely the media have a big part to play in this, or haven't being playing their part as it may be.
The reason the spotlight has been put on Chinese owenership is because it has been brought the the attention of the public. With some better reporting of other international deals then maybe there would be a ruckus.
But mandalay, why is it that it has only become a subject of concern around the Chinese purchase ?...I guess what you're saying is that we are actually all just uninformed sheep and are lead around by the nose by the media. Until the media points out something, and says its bad, we aren't able to think for ourselves ?
Actually, tend to agree with you, but personally I think Williamson's point is a fair one with many all the same.
Oh no! Not the Chinese!
We need some decent NZers owning it. Decent blokes like that Crafar guy - solid as I'd say! As honest as the day is long. He knew how to manage a farm and maintain a green image.
That Michael Fay would have been a good choice. I hear he's made some good investments in NZ, and really helped small kiwi investors. Not a corrupt or opportunistic bone in that guy's body. His daughter's hot too, and a great singer - I think NZonAir should spend more on building her career.
Can't go wrong with a kiwi. New Zealand. Kainga tuturu. 上帝保衛新西蘭。
Hello!
Long time listener, first time caller.
Has no one else noticed that we're talking about 7,000 hectares out of 350 thousand or so sold to foreign investors over the last two years. Hardly even material.
Don't get me wrong though, thankfully this will be the second and last term for Smarmy Smurf! Not that there will be much left to govern soon!
PM Key gone in less then 12 months !
Considering the worldwide situation, the economic position and the NZpublic opinion of New Zealand, more prove - PM Key for his buddies – not for the good of the wider New Zealand population.
The multimillionaire Chinese investor behind a successful bid for the Crafar farms has another purchase already lined up and being considered by the Government.
Jiang Zhaobai, counted among the 400 wealthiest Chinese, was given ministerial approval yesterday for his Shanghai Pengxin global conglomerate to buy the Crafar farms.
The deal is likely to face a judicial review before it is finally signed next week, but Prime Minister John Key said yesterday the bid "well and truly exceeded" legal requirements.
http://www.stuff.co.nz/business/6327844/Crafar-buyer-eyes-more-Kiwi-land
-The OIO was also processing a bid from Mr Jiang as part of a joint venture trying to buy "development land" in New Zealand.-
Kunst this is exactly the type of investment we want the chinese to make, let them sink as much yuan as they like into property, jobs for africa, and as we all know over supply of housing will mean prices crash right?.....maybe upto 30% (coff)
I think what i missed tat the time was that instead of properties crashing in price, the value of the NZD that we measure the value of our properties in would crash. So we are looking out housing and saying to ourselves that it held up, but maybe only because we are measuring it in severly devalued NZDs. Measured work need to buy it and they are expensive, but maybe that is because our pay has crashed in value. It is really tricky becasue all we have as a measure is NZD which are worth a whole lot less than than used to only a very short time ago.
My question is this, why couldn't the farms be divided up and sold individually? Re the foreign ownership thing, no one would have minded if chinese had bought some of the farms but it is the size and number that is worrying. Perhaps there should be restrictions on the size of the operation any one person can own.
As far as reporting for a half arsed conservative Auckland newspaper, she's not bad; and has a good point in that if Michael Fay is the alternative, the alternative is worse. Michael Fays past deeds epitomise what is wrong with the political, financial, and economic forces afflicting society.
Does even handed reporting include stooping to Fays attempts to bring xenophobia into the debate. Fays not xenophobic himself of course, he just wants the OIO decision to go his way. But the only debate worth having is should NZers support any foreign ownership, or not.
From TV Channel 7 Melbourne
It's happening here, under the radar, nothing in the MSM
The foreign raiders who are stockpiling our best land and farms.
http://au.news.yahoo.com/today-tonight/video/watch/28040396/
That link doesnt work too well
Try this one and click on the thumbnail for the Land Raiders
http://au.news.yahoo.com/today-tonight/video/
From NY Times Dealbook
FBI. Searches Offices of NY Adviser on Chinese Reverse Mergers. The FBI conducted a search Wednesday of New York Global Group, a corporate advisory firm that specializes in helping Chinese companies sell shares in the United States.
I believe the time has come when we need to set the two islands of NZ into two states so we can have more control over our future.
We can cherry pick the best ideas from around the world. Maybe states like in Australia or America. Scotland is having a referendum on independence so maybe each island can also have independance from each other.
Well, i am sure we can come up with a good system, but we need the debate first.
Just think, the government will only be able to bugger up half of NZ not all of it like now.
Tim Watkins at Pundit has an Excellent summation of the Pengxin deal...well worth your time to read this...
http://www.pundit.co.nz/content/crafar-farms-deal-ticks-the-boxes-%E2%8…
Summed it up nicely i thought.
Excellent article . The answer to the question Tim Watkins poses , how to keep our productive assets in kiwi hands , surely must be to encourage savings ......
..... taxing folks on the interest earned on their cash savings & term deposits is seriously dumb , when we need more savings ......
Stupid enough: We all do the same country by country – daily.
http://www.taoiseach.gov.ie/attached_files/BuildingIrelandsSmartEconomy…
In New Zealand we have a law that in essence requires chemist shops to be owned by individual chemists. It is a strange law in the modern world. Fran O'Sulivan does not spend a lot of time thinking about it , nobody really minds much. We could have a similar law for New Zealand Dairy farms. Keep the corporates away, probably be a good thing.
The chemist shop example is merely to illustrate that rules are just what we make them. Any option has things for it and things against. For chemist shops you could say in NZ we have.
1. expensive stuff to buy- eg over the counter meds seem very expensive
2. Lots of shop owner Chemists in every town in NZ
3. Tax revenue from the profitabile shops
4. Local community involvment
5. Multiplier effect of local small business ownership
6. very nice stores and staff
UK Model.- Boots is the major player owned offshore by private equity
1. Amazingly Cheap over the counter meds
2. No local ownership
3. No/extremely littke tax
4. No local multiplier effect
5. Boots is amajor compeitor to supermarkets/food stores etc
6. Nice enough staff, Ok stores
So no clear winning model. In NZ the whoelsalers/buying groups seem to be the lever to reduse any real competition. Similar to the Foodstuffs model in many ways- buying groups being allowd to set price/service etc and lobby government. VS Large offshore corporates doing the same thing.
Anyway the topic is dairy farms
Yes i did gather that, but you were advocating legal controls and limitations on business ownership and size, which i'm guessing you're saying this makes them more efficent?..creats a healthier community because the customers deal directly with the business owner??..they pay more taxes???... i'm no too sure about that!
I guess the corporates can and will become more dominant because technology will increasingly allow them too and dairying is a classic example of this.
Dairying use to be very labour intensive, not so anymore, look at the figures.
Canterbury our latest dairying area and most corporatized,avg herd size 750 cow producing a avg of 1350kg/ms/Ha, waikato a traditional dairying area with the highest proportion of owner/operators, avg herd size 350 cows producing an avg of 950kg/ms/Ha....who's the most efficent?? which farm can produce the cheapest product....New Technology has allowed that to happen...and new technology just keeps on coming...and its best suited to commodity production such as dairy....maybe not chemist shops.
If you were guaranteed a nice fat margin, would you complian?
I have seen chemist "shops" inside warehouse....so unless its a shop within a shop....besides which most chemists (from my limited understanding) are now franchises who charge accordingly....
So it should be us the consumer lobbying...
regards
In New Zealand we have a law that in essence requires chemist shops to be owned by individual chemists. It is a strange law in the modern world. Fran O'Sulivan does not spend a lot of time thinking about it , nobody really minds much. We could have a similar law for New Zealand Dairy farms. Keep the corporates away, probably be a good thing.
Small, beautiful New Zealand under attack by own megalomaniac government.
The Chinese Government-backed Shanghai Pengxin bid for the 16 Crafar farms has been approved - bravo.
For a start with the sale of Crafar farms, J.Key is now not only bailing out the banks, but also other criminals, who maneuvered them selves into the position of no return.
The buyers - gigantic companies http://www.peng-xin.com.cn/eng/GroupIntro106100104.shtml supported by governments know what they are doing. Dairy farms owned by Chinese companies/ government are popping up all over the world.
Does J. Key think about the long term consequences of our NZagriculture industry – the NZ dairy farmer in particular ?
Here an example, why I think he does not: But Professor Ning Li, the scientist who led the research and director of the State Key Laboratories for AgroBiotechnology at the China Agricultural University insisted that the GM milk would be as safe to drink as milk from ordinary dairy cows.
He said: "The milk tastes stronger than normal milk.
“We aim to commercialize some research in this area in coming three years. For the “human-like milk”, 10 years or maybe more time will be required to finally pour this enhanced milk into the consumer’s cup.”
China is now leading the way in research on genetically modified food and the rules on the technology are more relaxed than those in place in Europe.
In the current worldwide situation - I classify this as another megalomaniac adventure by the government with long term devastating economic and financial consequences for our economy, environment and society.
I ask the questions: Who would lose converting the farms in smaller units or some even back into native bush and who would be the winners ?
Follow the money Walter....it always comes down to that. The property bubble in agriculture was blown by the banks under Clark and came under the protection of Key from 08. The Crafar fiasco reflects failed govt wrapped up in policy aimed at ensuring the banks do not take losses on their own stupid lending. The outcome is land cost too high for young Kiwi to consider farm ownership...an increase in corporate ownership is on the table...an end to the family farm.
One other outcome will be a need to import labour to work on the farms to reduce costs...this already happens in the orchard and vineyard sectors...So expect to see Chinese labour brought in to work the Crafar land. I doubt the OIO and related rules said "no" to that.
We should realise that New Zealanders are being sold out all over again. British Elites did it the first time to the original Maori owners using the various strategies of the day. It failed in part due in no small part to a lack of labour that caused individuals have greater bargaining power against capital and allowed labour turn the system and buy many of the farms, then in the dairy industry that labour/owner model combined in cooprative structures to fight off corporate interests. Now New Zealand is being done over again using the very latest techniques. Only this time it isn't just the Maori who will loose out, it is everyone. Why anyone would defend New Zealand being sold out from under us for a second time is beyond me.
No land sales to foreigners full stop, only to NZ residents. This would keep land prices relevant to wages earned in this country and give the young a chance before they all leave. We all Know National is out to screw down wages and break the unions so at least our land prices would reflect what we earn. The sooner this country removes this fool Key the sooner we have a chance. But we will need more than the wet blanket Shearer, this is his opportunity and he is hiding in the shadows. NO Land sales to foreigners
I dont see why and I certinly dont see what looks like racism on your part as being needed.
To start with you can only bring in specific skills that are un-available here in NZ and show there is such a need....Halal is pretty specific requirement.......
A general farm worker is just cheap labour....however maybe you have not seen all the foreign vineyard workers? ie most NZers wont work in such hellish "jobs".........but NZers who own the vineyards choose to employ them at minimum wages.....so who's to "blame"?
regards
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