The approved sale of a large Otago dairy farm to an overseas investor for $34 million is a classic example of why rural land remains so expensive and out of reach for many New Zealanders, the Green Party says.The Overseas Investment Office (OIO) recently
The approved sale of a large Otago dairy farm to an overseas investor for $34 million is a classic example of why rural land remains so expensive and out of reach for many New Zealanders, the Green Party says.
The Overseas Investment Office (OIO) recently gave approval to Harvard University in the United States for the purchase of Big Sky Dairy Farms in the Maniatoto district.
The 1760ha property grazing 3300 cows is one of the nation's largest milk producers and the sale price was listed on the OIO papers as being $34,152,494.
Big Sky's original syndicate formed in 2001 and planned to develop the farm into the nation's biggest dairy herd, but it defaulted on payments to creditors and was put into liquidation in 2007.
Harvard, which has other investments in New Zealand's primary sector, told the OIO it intended to boost the operation by improving irrigation and pasture management.
The OIO is also looking at an application by Chinese-backed Natural Dairy to buy 16 dairy farms owned by the Crafar family before being put in receivership this year.
Green Party co-leader Russel Norman said it was disappointing the Big Sky bid got the green light, and had the party been aware of the application and run a campaign around it, the result might have been different.
"For us it's pretty straight forward -- we don't support New Zealand land falling into foreign ownership -- whether it's Harvard or the Chinese Communist Party," he told NZPA.
"From our point of view the economic case remains the same -- it's a drain on the New Zealand economy, it's money that is going out of the economy, it drives up rural land prices, puts pressure on the environment because the higher rural land prices are, the harder people have to thrash the land to make money out of it."
Following public unrest about the Crafar farms application, the Government last month announced changes to screening processes involved when foreigners apply to buy land here, including introducing economic interest and mitigating factor tests.
Dr Norman said it was difficult to tell if the Big Sky application would have been approved had those screening changes been introduced before the Harvard application went before the OIO.
"The screening process is entirely political because it's an economic interest test and one person's version of an economic interest is different to another," he said. "It's very difficult to know."
He said part of the frustration of sales of farms to wealthy overseas investors was that it inflated land values.
"Part of the reason our level of indebtedness is so high is because everyone is having to borrow so much money to buy farms, because they have become so ridiculously expensive."
If rural land prices dropped it would better for the New Zealand economy and would make it easier for locals to get into farm ownership, Dr Norman said.
The Green Party has submitted a member's bill saying sensitive land, including any land over five hectares, needs to stay in the ownership of New Zealand controlled entities, "and that means a New Zealand company, it means a New Zealand citizen or a New Zealand resident".
