Landcorp has reported an operating loss of $9.4 million for the year to June.
The result compared with a $4.9 million operating profit the previous year, itself an 84 percent decline on the previous year.
Statutory profit was $11.5 million, reflecting the one-off receipt of $7.4 million from land sales and unrealised “revaluation movements on items such as livestock, farm properties and financial assets, e.g. co-operative shares”, a spokesman for the company said.
“It’s been a tough year for the entire dairy sector, so our result is solid in that context,” said chief executive Steve Carden. “The result would have been lower without the progress already being made to strengthen our farming systems” and its high value Pamu product range. . .
The loss isn’t unexpected with dairy prices so low and sheep meat having had a pretty ordinary year but remind me again why we own this company?
Landcorp owns or leases 376,942 hectares of land. Its 140 farms and 1.6 million stock units makes it New Zealand’s largest farming operation.
It has a good reputation for staff management and training, animal welfare, genetics, other farming practices and environmental sustainability.
But does that justify state ownership of the company when its total asset value in its half year report to December 2015 was $1,846.4m?
There is a case for the crown owning land to use for treaty settlements.
There’s also a very strong case for reducing that huge investment in Landcorp by gradually selling farms to free-up money to spend it where the need for, and value from, investing it are greater.
That won’t happen.
All the parties on the left are philosophically wedded to the idea of state ownership even though the government, investors and taxpayers are all better off after other partial privatisations.
National is philosophically supportive of the idea but good philosophy and policy are sometimes bad politics and it has other priorities on which to concentrate.
Why do we still own the company? Politics.