What’s wrong with Chinese investment in NZ farms?

Federated Farmers has an open mind  on the news that a Chinese company wants to buy the Crafer dairy farms.

Reports that Hong Kong listed Natural Dairy (NZ) Holdings Limited, maybe moving to buy dairy farm assets and milk powder production plants in New Zealand, is a sign that the gate on the New Zealand-China Free Trade Agreement, swings both ways. . .

. . .”While the ball’s in the Government’s court, assuming this all comes to pass, Federated Farmers wishes to meet with Natural Dairy (NZ) Holdings Limited sooner rather than later, to understand its strategic direction.

“Whatever happens, New Zealand will remain an attractive investment destination so maybe time has come for us to look at a Ministry of Food Production. 

“It may also help put a floor under farm prices given that in the three months ending February, just 205 farms were sold.  That was down from 276 farm sales in the same three month period in 2009 and 713 for the same quarter in 2008.

I’m not sure that we need another ministry, but a discussion and strategy on food production is a good idea.

The sale might also persuade would-be buyers that the bottom of the market has been reached and it’s time to get the gorse out of their pockets.

Not everyone is so open minded about the idea of Chinese investment here.

There are risks that animal welfare, hygiene and environmental standards might be compromised. But that can happen with any ownership. There are very strict rules about all of those which every owner has to adhere to and breeches of which have stiff penalties.

There are also oppportunities from the plan. If, has been mooted, at least some of the milk will be processed here and shipped as long-life milk rather than powder, that will create jobs for New Zealanders.

Some opposition is based on a blanket aversion to foreign ownership but as Lachlan McKenzie said the door swings both ways.

PGG Wrightson is 30% owned by Agria Corp which is a Chinese company and New Zealand businesses own foreign businesses.

Fonterra has dairy farms in China and Chile and NZ Farming Systems Uruguay owns farms in Uruguay.

10 Responses to What’s wrong with Chinese investment in NZ farms?

  1. Adolf Fiinkensein says:

    I’m not worried about them buying farms. Production facilities is another matter all together. Does Fonterra REALLY want these people controlling a serious proportion of our dairy industry manufacture and exports? The same people who allowed the melamine fiasco on their own door step.

    Our bone lazy media have asked absolutely no questions about the $billion or so of milk powder production changing hands. All they can focus on is Crafar’s farms. Pathetic.

    What are the implications for Fonterra’s capital restructuring?


  2. homepaddock says:

    Very good questions, Adolf, especially if the milk is marketed as NZ milk.

    The stringent regulations which are required of food produced and processed here ought to apply to any company regardless of who owns it. But you are right to be wary.


  3. JC says:

    There’s another elephant in the room..

    Fonterra and and Feds are hosting some US senators/congressmen shortly in an effort to show that Fonterra isn’t a monopoly supplier.

    As 90% of product comes from Fonterra this is a hard sell, but the introduction of the Chinese could be used to dilute the monopoly and encourage Fonterra’s shareholders to look up market and follow more the Nokia model.

    Now would be a good time for Fonterra to increase its R&A into high end product.



  4. LeftRightOut says:

    …at least some of the milk will be processed here and shipped as long-life milk rather than powder, that will create jobs for New Zealanders.

    Don’t be too sure about this. Under our (less than) Free Trade Agreement with China, chinese workers could be imported/exploited to work in these factories, thus reducing job opportunities for New Zealanders.


  5. Adolf Fiinkensein says:

    LRO, you should not spout such arrant nonsense.


  6. Tired Farmer says:

    Adolf, methinks you are taking the P— out on Left RightOut’s remarks.


  7. barry says:

    It should not go un-noticed that the chinese Hong Kong company is called:

    Natural dairy (NZ) Holdings. Now – there are 3 very important parts to that name.
    Natural – no added melamine – its all real milk
    Dairy – its from real cows
    NZ – its from New Zealand

    But all the profit is in Hong Kong.
    And most of the jobs will be in china , and maybe even NZ jobs will be chinese based (like Air NZ) and under our new free trade deal, the chinese will be able to send chinese labour to NZ and pay them chinese wages.

    Now isnt that amazing !!!!!!

    If NZ dairy farmers hadnt been so stupid as to vote to form Fonterra, and then starve it of capital , then fonterra might have been able to buy these farms, but no, they have no monery and their borrowings are so high they cant borrow the money either.
    And anyway if they could get the money theyd be off buying farms and milk in S.America – or even china…….

    Shares are a gamble – and you lose most gambles (TAKE THE TOP 10 AT THEIR PRICE 15 YEARS AGO THEYD COST YOU $39 FOR ONE SHARE IN EACH OF THEM, TODAY THEYRE WORTH $35 – for the lot)
    Investment companies are sort of dodgy.
    Dairy farms will be worth fuck all in a few years time.

    Shit – am i happy ive got some rental properties. At least these bloody chinese labours will have to live somewhere……….


  8. Julie says:

    Anyone interested in this issue is recommended to read “Dirt – The Erosion of Civilizations” by David R. Montgomery (2007) University of California Press. One of his chapters is entitled “Let Them Eat Colonies” and this looks like what is happening to New Zealand. Montgomery draws attention to the fact that during the Irish potato famine Irish exports to England increased, and that in present day Guatemala most Guatemalans cannot afford to buy their own coffee. Montgomery also argues that topsoil loss (simply mining in another form) can can “cripple an economy and impoverish its people.” New Zealanders need to consider whether their future is to become subsistence farmers unable to afford the produce of their own land while supporting an empire abroad. Let’s reconsider exporting our topsoil and our water until we have had a serious debate on whether that is in our long term interest.


  9. Phil Toms says:

    Thanks for outstanding and informative posts about this crucial issue. We should sell them the cheese, not the soil. Apparently this is a result of Clark’s “free” Trade deal with China.
    The deal must be scrapped.
    Southland farmers are apparently shocked that the sarcasticly named “Natural Dairy New Zealand” are eyeing up their neighbourhood also.
    We need a petition, a referendum. Should be a slam dunk.
    Wait till I tell the Greens on facebook about the chinese workers!
    On the other hand, they do have some really good blankets and mirrors!


  10. Phil Toms says:

    Barry, this debate is very big at the moment. Yours is the only post I can find which claims the chinese can bring their own labour and pay them chinese wages. Please could you post a link to where you get this from. I am extremely alarmed by this suggestion. If it is true, it needs to be shouted from the rooftops.
    Phil toms


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