Massive Rent from Landcorpto under Crafar Farm Deal

For Immediate Release

12 January, 2012

Massive Rent from Landcorp to Shanghai Pengxin under Crafar Farm Deal

Landcorp will pay the Chinese owners $18 million per year to be tenants on the Crafar Farms if the Shanghai Pengxin Group’s application to the Overseas Investment Office (OIO) is successful.

Despite Landcorp’s refusal to comply with an Official Information Act request to provide details of its contract negotiations with the Chinese, Hardie Peni, Chairman of the Tiroa E and Te Hape B Trusts and one of several investors in the central North Island based farmers’ group also seeking to purchase the farms, says details are beginning to emerge locally.

“From what we’re hearing Landcorp have negotiated a deal that is the standard 50-50 sharemilking deal familiar to the wider dairy industry,” says Mr Peni.

“Prime Minister John Key said last year that we didn’t want to be tenants in our own land. On current Fonterra payout numbers and based on Landcorp’s plan to produce 5.2 million kilograms of milksolids per annum, Landcorp, a taxpayer owned Government farmer, will pay the Chinese sitting in Shanghai, $18 million in rent per year to be tenants on what was our own New Zealand farm land.

“No matter which way you look at a deal like that it just seems stupid when there are New Zealand farmers ready willing and able to buy these farms and keep producing milk for the benefit of our local and national economies.

“It is especially hard for us as Iwi with deep ancestral links and claims on this land to consider the possibility of the land going into overseas ownership with the likelihood it will never come back to us.”

Mr Peni said the fact that OIO figures showed approvals for sales of land were increasing should be a concern to all New Zealanders and was a matter of national sovereignty.

“New Zealand farmers can’t buy land in China but overseas buyers are snapping up farms and other valuable land in New Zealand at a rate of more than 107,000 hectares per year for the past five years (2006-2011 OIO figures). That’s 10 Crafar Farm transactions every year.

Mr Peni said his farming group believed Shanghai Pengxin Group failed the OIO’s key test to buy land because Pengxin is clearly nothing more than a passive investor.

“They are a construction and mining company that admits they don’t know how to farm. But Landcorp’s involvement allows Pengxin to get approval for a deal that surely must be turned down.

“The only publicly available information shows Shanghai Pengxin Group has a very high level of debt but has somehow found the backing to make a $200 million deal for the Crafar Farms. Again we’re hearing their backing comes from a major Chinese dairy company that is a direct competitor to Fonterra.

“If that’s the case Landcorp is not only competing against New Zealand farmers for land, it’s also helping our rivals compete against New Zealand’s most successful export earning company. Is that what the taxpayer wants from our tax dollars?

“Giving the go ahead to the Pengxin/Landcorp deal makes no sense. It sets a precedent that is an immediate threat to our national sovereignty.”

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