Bundled farm sales to foreigners in govt’s sights

Bundled farm sales to foreigners in govt’s sights

by Paul McBeth

Sept. 27 (BusinessDesk) – Bundling up large tracts of farmland for sale to foreign investors is a major concern, says the government in its review of foreign investment rules.

Finance Minister Bill English told a media conference in Wellington “undue aggregation and vertical integration” of farmland was behind the introduction of one of two new benefits tests under the Overseas Investment Act.

The changes will let ministers take wider economic implications into account before signing off a sale to foreign investors.

English citing two large farm sales that are looming: the bid by Hong Kong-based Natural Dairy (NZ) Holdings for the Crafar family farms, and international bidder interest in dairy farms in which the failed financier South Canterbury Finance Ltd. had a stake.

The changes will apply from December, by which time the Crafar farms issue is expected to be resolved.

“Over the next few years we’ll continue to find a number of large aggregated landholdings coming on the market,” English said. “There are some transactions going on” and there’s “potentially a number of large scale land sales coming on to the market.”

The government has come under increasing pressure to block farm sales after the bid for the Crafar farms came to light, with groups as diverse as the Green Party and Federated Farmers expressing either opposition or disquiet.

The government has been looking at foreign investment rules since it came into office, although its original focus was to speed the process up.

Simplified rules have already seen approval times fall to an average 38 days from 63 days.

Ministers will be able to consider whether the nation’s wider economic interests are adequately safeguarded.

A “mitigating” factor test will let ministers consider whether an investment opens opportunities for New Zealand involvement, such as whether it will have local board members or a local head office is to be established.

The government will also keep the previous Labour-led government’s strategic asset test, even though it has yet to be used.

(BusinessDesk) 14:56:26

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