Landcorp’s full year results to June 2013 are very sorry reading.
The company made a net operating profit of $12, 959,000; a net loss after tax of $18,067,000 and paid a $5 million dividend.
It attributes the poor return to last year’s drought which hit milk production and livestock prices.
There would be few if any farms in the areas where Landcorp operates that didn’t have an equally tough year.
But none would have $1,694,900 in assets.
Landcorp has a very big asset with a very poor return.
Performance in recent years hasn’t been as bad as last season but even the best isn’t a good return on the asset:
The company has a good reputation for staff training and genetics but neither require the state ownership of farms.
The one compelling argument for the continued ownership of the farms is as a land bank for treaty settlements.
But once they are concluded there is no need for the state to be in the business of farming.
Then the land should be sold, farm by farm, over time so as not to flood the market and depress prices.
The farm management expertise and genetics could be sold as separate companies.
That would provide far more money for research, training and other projects which would return more for the country such as irrigation infrastructure than will ever be available from Landcorp’s dividends.