What’s wrong with Chinese investment in NZ farms?

25/03/2010

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.


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