Whether our ancestors, paddled, sailed, or flew here, they brought with them a variety of skills and cultures which have helped make us and our country what it is.
Now that our birth rate is hovering at or below natural replacement level, immigration is at least as important as it was in the past.
You’d think that means we’d welcome people bringing their expertise and money, but that’s not necessarily the case, especially when it comes to those wanting to buy farm land.
The Herald reports:
. . . at least 24 countries have been given approval to invest in the agricultural sector, covering 154,855ha and a wide range of sectors from sheep farming to viticulture.
I suspect they mean that people from at least 24 countries, which is different from the countries themselves, and that’s not necessarily bad.
Westpac chief economist Brendan O’Donovan says foreign investment generally has been an integral part of New Zealand’s growth.
“Because we’ve always had a capital shortage and we’ve been very dependent on foreign funding and foreign firms,” O’Donovan explains. . .
New Zealanders buy into foreign companies and land, he says. “If you expect to be able to buy land in other countries then you’ve got to be prepared to sell it here.”
Adolf at No Minister, agrees and points out that New Zealanders may well have bought a greater area of land in other countries than foreigners have bought here over the last five years.
Although not all countries allow non-nationals to buy land which is one of the issues Federated Farmers is considering. While mindful of the importance of overseas investment, Feds president Don Nicolson says:
“. . . I think it’s very important that we have reciprocal rights for purchasing in the countries that may be willing to invest in our land and assets here.
“We can only lease [land in China] so at best people are saying surely these people should only be able to lease land in New Zealand.”
New Zealanders buy land in North and South America, Australia, South Africa and central Europe, he says.
“I think if you talk this through with people clearly they need to understand that we need capital flows into this country … and when you start going through how it plays out people do back up.”
Federated Farmers is reviewing its position on foreign ownership.
“Our position of old has been that, well they can’t take the land with them, provided they acknowledge New Zealand law and institutions and provided they pay taxes in New Zealand then what is the issue?” Nicolson says.
“We want to have capital flow into this country – the last thing we need is anything that would spook capital flight.”
However, Fonterra chair Sir Henry van der Heyden is less enthusiastic. He said low-cost pastoral agriculture is New Zealand’s point of difference and warned we must be careful not to give away our competitive advantage.
“Or we will pay the price,” van der Heyden says.
Van der Heyden wants to start a public debate over who should own prime pastoral land and questions why, given our temperate climate and soil and water resources, land is not seen as a strategic asset.
“Why shouldn’t it be under [New Zealand] control and ownership?”
He didn’t explain how this view sits with the co-operative’s farming ventures in China and Chile, although, at least in China, Fonterra leases land because foreigners aren’t permitted to own it.
It’s unfortunate that the discussion on overseas ownership now is being driven by fears the 16 Crafar farms may be bought by a Chinese company. Policy on matters as important as this should be formed on general principle not particular prejudice and, as O’Donovan says:
“The key thing in all of this is to set clear rules because what we’re talking about is property rights, you can’t go changing the rules midstream,” he says.
“If there’s any no-go areas for foreign investors then it should be put on a register so it’s clear … and everyone knows what the rules are.”
It’s not just potential purchasers who need certainty, would-be vendors do too.
Land sales are more emotive than other assets because people have a perception the family silver is being sold, he says.
“There’s a limited difference between a foreigner owning a company here versus the land underneath that company.
“The question is always what do you do with the money [from] the asset that’s been sold,” O’Donovan says.
“If you think that you can invest it either somewhere else in New Zealand or overseas and generate a greater return on it, then where’s the issue.”
This is something which is often overlooked. For every buyer there must be a seller. If money is brought in to New Zealand to purchase land the vendor is then able to invest the proceeds in more land or other ventures and the foreigners investing here bring more than money.
An Italian bought a farm in the Hakataramea Valley, realised it was similar to where he grew up in northern Italy which produced good wines. He planted grapes and last year opened the Waitaki Valley’s first winery.
We have friends who came from overseas, invested money they brought with them in farms, settled on them with their families and are making a positive contribution to their new communities and New Zealand agriculture.
These examples may well be able to be countered by anecdotes of other people who took more than they contributed but bad farming isn’t peculiar to foreigners.
Regardless of who owns the land, it’s now who they are or where they come from, but what they are permitted to do with it which is most important.