CraFarm decision a small part of much bigger picture
Using Overseas Investment Office (OIO) figures provided under the Official Information Act, Federated Farmers has found urban expansion and carbon forestry potentially pose bigger threats to agriculture than the sale of the former CraFarms to Shanghai Pengxin.
“We hope today’s announcement of the approval of the sale of the former CraFarms to Chinese investors Shanghai Pengxin will finally spell the end of this saga. There is a lot of emotion around large scale overseas investment in any type of land, but especially of farmland,” says Bruce Wills, Federated Farmers President and a former banker.
“This is completely understandable; New Zealanders fear they will become tenants in their own land. Indeed, I have always believed the CraFarms’ receivers would have sold the farms quicker and to New Zealand buyers if they had been sold as separate entities.
“However, our investigations into the sale of farmland shows forestry and lifestyle blocks pose much greater threats to our countryside than the sale of these dairy farms.
“To get a clear idea of this issue, Federated Farmers asked the OIO what farm land sales have been consented, by farm type. We do also note, not all of these approvals actually translate into finalised land sales.
“The results are an eye opener. Between 2002 and 31 December 2011, the sale of 13,317 hectares (ha) of dairy land is dwarfed by forestry approvals at a staggering 1.78 million ha.
“The forestry sum is astounding given there’s around 1.8 million hectares of plantation forestry in all of New Zealand. What’s more, two-thirds of these overseas forestry approvals were granted between 2002 and 2007.
“Approvals for sheep and beef land was 293,783 ha between 2002 and 2011 and there was even more horticultural land given approval under the Overseas Investment Act approval than dairy farms with 15,037 ha.
“We are also losing large tracks of sheep and beef land to incentives under the Emissions Trading Scheme. Of the 12,131 ha of forestry land before the OIO right now, half of that, 6,119 ha, is to convert working farmland to carbon sequestration.
“Given there’s 1.6 million ha of dairy farms, overseas investors over that time bought less than one percent. Even with a spike in the first quarter of 2012, less than 1.3 percent of dairy land was consented to go into overseas hands. I also suspect many dairy applicants may have since become Kiwis.
“This is an important point to make; but the OIO doesn’t keep track of how many overseas applicants become permanent residents or citizens down the track. We feel there needs to be more information available on this to build a clearer understanding of this issue.
“We are also missing the bigger picture by focusing on the former CraFarms farms. Landcare Research shows 873,000 hectares of farmland are now in less productive lifestyle blocks. That’s equivalent to 110 Crafar farms being taken up by our expanding cities.
“This is the big picture we should be looking at in this debate,” Mr Wills concluded.