Rural round-up

May 30, 2018
Collective responsibility tough – ODT editorial:

The Government and farming leaders have made one of the hardest decisions imaginable in deciding to attempt the eradication of cattle disease Mycoplasma bovis from New Zealand.

The decision has been made to protect the national herd and the long-term productivity of the farming sector.

Farming leaders have thrown their support behind the eradication attempt, but it is the actual farmers with the infected herds who will now be facing the reality of losing cows they may have bred into milk-producing animals. . . 

Mycolplasma bovis – focusing on the immediate – Keith Woodford:

[This is an open letter to the Minister of Agriculture Damien O’Connor, sent on the evening of 29 May 2018, as part of an ongoing dialogue.]

Dear Damien

Mycoplasma bovis: focusing on the immediate

This is a further open letter. It is an open letter because it contains information that I believe both you and others need to hear.

First of all, I want to acknowledge phone and email interactions we have had in recent days. I note in particular that you emailed me at 3am this morning which surely tells its own story. Farmers too are emailing me at that time, indicative of the stress they are under.

Now that the eradication decision has been made, then I do not wish to debate that here. Instead I want to focus on maximising the chances that it will work and minimising the pain to the affected farmers.

On the Newshub AM show this morning I focused among other things on the need for MPI to ‘up its game’. Response Director Geoff Gwyn subsequently acknowledged that there may well be lessons to learn, but did not name any when asked by the presenter, and said that he thought that MPI had done many things well. . . 

Mental health fears for farmers over mass cow cull – Tim Brown:

The people at ground zero of the Mycoplasma bovis outbreak are warning that the eradication bid could have disastrous knock-on effects.

Others in the small Southland town of Winton are backing the government cull of 150,000 cows.

Yesterday, the government announced it was committed to eradicating the illness with a ten year plan that would cost about $886 million.

Prime Minster Jacinda Ardern said the government had “one shot” at eliminating the disease.

It was discovered in July last year and since then 41 farms have been confirmed as infected. That has since dropped to 37 farms, with more than 11,000 cattle slaughtered. . . 

Cattle disease Mycoplasma bovis rated ‘low risk’ by health officials – Gerard Hutching:

The possibility of humans contracting Mycoplasma bovis from eating meat or drinking milk from infected cattle has been dismissed by officials and food safety experts as a “low risk”.

The Ministry for Primary Industries (MPI) said the disease was not a food safety risk. Concerns have again been raised over the culling of 152,000 cattle and whether their meat or milk might threaten human health.

“There is no issue with eating beef or drinking milk from infected herds. This disease is in every other farming nation and people have been consuming products from cattle with Mycoplasma bovis for decades,” MPI said. . . 

Good on-farm management essential for eradication plan to succeed:

Good on-farm animal management will be essential if plans to eradicate Mycoplasma bovis (M. bovis) are to succeed, the New Zealand Veterinary Association says.

“This will be essential to stop the infection spreading and to ensure M. bovis isn’t re-introduced into New Zealand,” NZVA President Dr. Peter Blaikie said.

The industry and government today announced a phased eradication plan to attempt to get rid of M. bovis. . . 

M, bovis: how did we get here?:

Everyone’s been playing catch-up since the Mycoplasma bovis outbreak – and everyone’s blamed each other.

On Monday, the government announced a 10-year plan to eradicate the disease, saying about 150,000 cows would have to be slaughtered.

Prime Minister Jacinda Ardern said the government had “one shot” at eliminating the disease, at a cost of about $886 million to government and industry bodies.

The news is devastating for many farmers who have devoted their lives to the industry. Some fear their livelihoods will be destroyed.

But how did we get here? . . 

In a word from Sir Humphrey – courageous – Gravedodger:

During my life spent in primary production one of the most stressful segments arose around the determination to eradicate TB. Bovine Tuberculosis is one insidious little beastie with a remarkable ability to thwart detection.

Once every  year all bovine stock were mustered and put up a race where a MAF person would inject a small dose of reagent  in the soft skin  between the tail and the rump, three days later that crat would return and scan by feel for a lump at that injection site and if a reactor (a palpable lump) was discovered that beast would be slaughtered asap where TB would be confirmed  post mortem but alas sometimes the animal would be a “clear”.
One reactor and the whole heard would be placed on ‘movement control’ requiring any cattle for sale to carry a “white ear tag” and receive  a discounted price.

We farmed in an area of the Wairarapa where our eight neighbours all went on and off “movement control” over the twenty years yet surprisingly  we managed to remain “Clear” throughout the two decades we operated there.
It did not come easy, I wish to forget how many nights were spent sometimes more than five hours on an open quad bike seeking the dreaded Possum, an uninvited guest that could become infected with Bovine TB but before inevitable death could infect pasture from suppurating lesions, leaving infected grass to be ingested by a grazing beast and a “reactor”  created. . .

Olive Oil 
the New Zealand Way: –

David Walshaw 

“I have a lot invested in each drop of this gorgeous, golden liquid. There is the time and money, of course, but there is far more than that, too. It is the distillation of a dream and the physical and emotional effort required to realise that dream. The flavours and the aromas of the oil are like a story — the story of the tree’s experience of a year, itself a chapter in the life of the tree, and the tree’s life a volume in the ages long story of the cultivation of the olive. My own story is in there, too, intertwined with the gnarled wood of the olive tree.” 

When, after a successful career in banking and finance, David Walshaw decided it was time for a change, he settled on growing olives for oil as his new direction. Neither he nor his wife Helen had any previous experience, but by doing the research, by seeking the advice of other growers, by putting in the work, by trial and not a few errors, they made a go of it. . . 

The build of Synlait’s liquid packaging facility is on track:

Synlait Milk is pleased with the progress made on the building of its advanced liquid dairy packaging facility by Tetra Pak.

The two companies have worked together for over ten years, beginning with the building of Synlait’s anhydrous milkfat (AMF) plant in 2007.

The new facility will produce fresh milk and cream for Foodstuffs South Island’s private label brands from early 2019, and will be a platform for Synlait to pursue a range of dairy-based products for export markets. . . 

Milk NZ Holding surprised by Fonterra’s $7 payout for 2019 given outlook for global demand Jonathan Underhill

(BusinessDesk) – Milk New Zealand Holding, which owns and manages dairy operations controlled by Shanghai Pengxin, says it didn’t expect such a bullish forecast from Fonterra Cooperative Group for its 2019 milk payout.

Last week Fonterra raised its forecast milk price for 2019 of $7 per kilogram of milk solids from the $6.75 /kgMS projected for the current season, while cutting its projected dividends for 2018, saying rising global dairy prices were squeezing margins. . .

Federated Farmers appoints Terry Copeland as its new CEO:

The man who helped transform NZ Young Farmers has been appointed to lead the country’s most influential rural lobby group.

Terry Copeland, 50, has been named the next chief executive of Federated Farmers. He replaces Graham Smith.

Mr Copeland has been the chief executive of NZ Young Farmers since 2013 and is looking forward to a new challenge. . . 

Butchers ‘living in fear’ as vegan attacks on the rise, says Countryside Alliance – Helena Horton:

Attacks on small businesses by vegan activists are on the rise, according to the Countryside Alliance.

Death threats, stoked by social media and encouraged by international groups of activists, have caused butchers and farmers to “live in fear.”

Marlow Butchers, in, Ashford, Kent, was targeted earlier this month by activists who daubed red paint on the doors and windows of the shop . .

Organic vs conventional food fight: Focus on pesticides distracts from real environmental problems – Marc Brazeau :

A quick note in my news feed highlighted a new data set from the World Bank that shows that while the US has one of the most productive agriculture sectors in the world, it also has some of the lowest rates of pesticide and fertilizer use. Good news. The author’s title, however, stuck me as unfortunate: World’s Model for Sustainability in Food Production. His write up was about pesticide and fertilizer use, and while high yields, with low pesticide and fertilizer rates are very commendable (and surprising to many), pesticide and fertilizer use is hardly the last word in sustainability in agriculture. And among the biggest impacts of agriculture: land use, water use, greenhouse gas emissions, water pollution; pesticides hardly rate. And yet…

One of the things that has really begun to stand out in the debate between advocates of technologically progressive agriculture and the critics of technological agriculture is the persistence of the idea that the use of pesticides is still a major problem, if not the central environmental impact of agriculture, that needs to be addressed. This is unfortunate. It’s just not accurate. It’s a cul-de-sac in the discussion about how to improve the environmental footprint of agriculture. It’s a distraction from the addressing the major environmental impacts. . .


Rural round-up

September 4, 2017

Eradication is still doable MPI says – Annette Scott:

Officials expect to decide by the end of the year whether the cattle disease Mycoplasma bovis can be eradicated.

The disease, identified on a Van Leeuwen Dairy Group farm in South Canterbury in July, had now been traced to six farms including four van Leeuwen farms, one North Otago farm believed to be a calf rearing operation and a lifestyle block at Sefton in North Canterbury.

A fourth community meeting in North Otago on Thursday attracted a crowd of 160 people full of questions. . . 

Urgent need to train rural GPs – Eileen Goodwin:

A decade before Waikato University sparked a public debate on a third medical school, a far-sighted Queenstown GP set up a Rural Medical Immersion Programme to try to fill rural health shortages. Health reporter Eileen Goodwin talks to those involved.

The trust founded to further his brother’s legacy fostering rural health may be redundant when a new rural school of medicine is established, John Farry says. Mr Farry, of Dunedin, chairman of the Pat Farry Rural Health Education Trust, hopes the new school will be awarded to the University of Otago under its joint bid with Auckland. He did not want to see it set up as a new medical school, such as that sought by the University of Waikato. . .

Water Conservation Orders should be abolished says Feds:

Federated Farmers is calling for Water Conservation Orders (WCO) to be abolished because they are no longer relevant and a relic of the past.

Under the Resource Management Act (RMA), the Orders are limited and do not acknowledge farming, horticulture, beverages, manufacturing, and access for human and livestock drinking.

The Federation says the National Policy Statement for Freshwater Management has superseded the Orders and made the legislation no longer fitting for future challenges around water conservation. . . 

Farm sector welcomes TPP resuscitation talks:

The National Farmers’ Federation (NFF) of Australia and Federated Farmers of New Zealand say moves to bring into force the bulk of the Trans Pacific Partnership (TPP) is good news for both Australian and New Zealand farm exports.

In Sydney this week, officials from Australia and New Zealand concluded three days of talks with chief negotiators from the other nine TPP countries.

The aim of the talks was to push forward on the development of a ‘regional trade pact’ following the United States’ withdrawal from negotiations earlier this year. . . 

Landcorp back in the black as valuations swing in its favour:

(BusinessDesk) – Landcorp Farming reported a full-year profit as the state-owned farmer recog-nised a jump in the value of livestock and benefited from strong market prices.

Profit was $51.9 million in the year ended June 30, more than four times the $11.5 million it earned a year earlier. Revenue rose 11 percent to $233.5 million while expenses rose 3.3 percent, which included costs related to the end of its sharemilking contract with Shanghai Pengxin, the company said.

The results include a $20 million increase in the value of livestock, “reflecting strong market prices” while the year-earlier result carried an unrealised loss of $24.8 million on land and improvements. The operating profit in the latest year was about $5.7 million, within its guidance range of between $2 million and $7 million, from a year-earlier loss of $9.4 million. . . 

Terms of trade just shy of all-time high:

Record butter prices and high prices for meat helped lift the merchandise terms of trade by 1.5 percent in the June 2017 quarter, Stats NZ said today. This was just shy of the all-time high set 44 years ago in the June 1973 quarter.

Terms of trade is a measure of the purchasing power of New Zealand’s exports abroad and an indicator of the state of the overall economy. The 1.5 percent rise in the June quarter means New Zealand can buy 1.5 percent more imports for the same amount of exports.

“The 1.5 percent rise in terms of trade in the June quarter follows a 3.9 percent increase in the March 2017 quarter,” prices senior manager Jason Attewell said today. “Because the March provisional quarter was revised down from 5.1 percent, the terms of trade didn’t quite reach the record high as expected, but it is very close.” . . 

NZ’s Top Butcher Announced:

The nation’s top butcher and butcher apprentice have been announced this evening at one of the most anticipated events on the meat industry calendar.

Reuben Sharples from Aussie Butcher New Lynn has been named Alto Butcher of the Year and Samantha Weller from New World Rangiora took out the title of Competenz Butcher Apprentice of the Year.

Following three highly competitive regional competitions in Auckland, Wellington and Christchurch, 10 finalists from each category went head to head in the Grand Final held at Shed 10 in Auckland earlier today. . . 

T&G Global secures exclusive commercialisation rights for blueberry varieties in Australia:

T&G Global has become the license holder of a suite of 16 proprietary blueberry varieties in Australia, allowing it to better deliver to growing demand for berry fruit worldwide.

The exclusive agreement represents one of the biggest collections of proprietary commercial and pre-commercial blueberry varieties in the world and is the result of an agreement between T&G and Plant & Food Research in New Zealand. The arrangement includes varieties developed by Plant & Food Research and a collection of premium varieties from Fall Creek Farm and Nursery in Oregon, USA, for which Plant & Food Research holds the Australian licensing rights. . . 

Farmers feed cities. Support your local farmer before the Labour Party sens him/her out of business.


Rural round-up

October 31, 2016

Graduates take red meat path – Sally Rae:

Young Telford graduates William Benson and Lisa Bonenkamp will today embark on careers in the red meat sector.

The pair have completed their studies at Telford, where they were involved in the Red Meat Network, a tertiary network designed to increase the number of high achieving graduates entering the sheep and beef industry. Established last year, the network allowed 20 leading students from six tertiary institutions to hear high calibre speakers from the red meat sector, including New Zealand Special Agricultural Trade Envoy Mike Petersen. It was funded by the Red Meat Profit Partnership, a Primary Growth Partnership programme.

Encouraging young people into the red meat sector was a key part of increasing productivity, RMPP general manager Michael Smith said. . . 

Chinese investment in NZ likely to shift to companies – Alexa Cook:

Public suspicion and red tape is discouraging Chinese investment in New Zealand, a Shanghai Pengxin boss says.

Shanghai Pengxin president of overseas investment Terry Lee told a Chinese agriculture conference in Wellington they wanted to control the value chain from farm gate to the table, but New Zealand kept putting up hurdles.

Mr Lee told the audience New Zealand’s government tailor-made regulations so Shanghai Pengxin could not buy Lochinvar station last year.

He said there should have been an apology, and while suspicion was a natural reaction to foreign investment it was not helpful for New Zealand. . . 

The future of milk – Lynley Hargreaves:

Value-added milk products are likely to continue their rise, says new Royal Society of New Zealand Fellow Dr Skelte Anema. That means we’ll keep moving away from commodities like dried milk powder and export more expensive products such as fresh and long-life liquid milk and cream. A Principal Research Scientist at the Fonterra Research and Development Centre, Dr Anema has worked in the New Zealand dairy industry since 1990. He tells us how the science and economics have changed, and how processing milk in different ways can effect milk proteins, making for more consistent products, a longer shelf life, or even pourable cheese.

When you first started working in this area, New Zealand had cream-topped glass bottles of home-delivered milk. How has the research environment changed in the last 26 years?

Fresh milk that is sold in New Zealand is only a very small part of our milk supply. But one thing that’s very different now is that we used to do a lot of research on milk powder. . . 

Jane Hunter Honoured by Marlborough Wine Industry:

Jane Hunter, owner of Hunter’s Wines in Marlborough, has been awarded a Lifetime Achievement Award by the board of Wine Marlborough.

The annual award is given in recognition of services to the wine industry over a period of time.

Jane, who arrived in Marlborough in 1983, has played an integral role in making Marlborough a household name in international wine circles.

Arriving in the province in 1983 as a viticulturist for Montana Wines, she went on to marry Ernie Hunter, the founder of one of Marlborough’s first wineries. When Ernie died in 1987, Jane took over the reins of the company. . . 

Future of Food:

The Netherlands and New Zealand have much in common, in both culture and economics, particularly in the areas of agri-food, horticulture and trade. Next month, the Embassy of the Netherlands is hosting a one-day forum, in cooperation with Massey University and FoodHQ, which will take advantage of the many parallels between the two nations with the aim of creating momentum for exploring new opportunities where we can collaborate on the issues of sustainable food commerce in key global markets.

Next month’s Future of Food Forum will be opened by Science and Innovation Minister Steven Joyce and Netherlands Minister for Economic Affairs Henk Kamp. The Forum includes presentations and discussions between leaders from the private and public sector, including Fonterra chief executive Theo Spierings, Zespri chief executive Lain Jager and Massey Vice-Chancellor Steve Maharey. . . 

Insects are the sustainable food of the future –  Dick Wybrow:

The buzz is getting louder as we make more room on our dinner tables for bugs.

With a growing global population and shrinking resources, some experts think insects could eventually replace meat and fish.

It’s been estimated that it takes 1750 litres of water and more than 6kg of feed to make an average hamburger.

So maybe it’s time to bite the bugs back.

We already know a handful of freeze-dried ants or a salad sprinkled with crickets can provide heaps of protein. . . 

Meth use spikes amongst rural Australians:

There are calls for drug monitoring in rural areas after a study found meth use among rural Australians is twice as high as those living in cities.

One in 43 people in rural areas are using the drug, according to researchers from the University of Western Australia – that’s 150 percent more than in 2007.

In cities, use has only gone up 16 percent.

The highest rates of usage were found in rural men aged 18 to 25, particularly tradies. . . 

Nine Hours in the Combine : Reflecting on #My60Acres – Uptown Farms:

The corn is harvested!  It took Matt and I, each running a 9500 John Deere combine with a 6 row corn head, about nine hours to harvest the entire 60 acres.  So now that it’s all done, here are my thoughts.

Farming is hard work!

There might be a reason only 2% of Americans do this – it’s hard!  I try to battle that fairy-tale version of farming on my  blog but I don’t think I’ve given enough credit to the physical aspect of farming. 

I see him come home every night  covered head to toe in dust and looking physically exhausted.  But it never really registered with me.  Especially this time of year.  I know working cattle is hard, shearing sheep is hard. But driving a tractor or a combine?  . . 


Rural round-up

February 17, 2016

Urban ideals quash rural spirit – Craig Wiggins:

Over the last few years I have stood in front of many, commentating rural sports in many rural communities in three different countries and feel it’s time to put some perspective into the emotive protests for and against rural activities.  

We have just witnessed the SAFE campaign against the dairy industry and through the summer the anti-rodeo campaign gaining media coverage.  As in the case of the SAFE coverage, it’s easy fodder for urban-based journalists to get consumer buy-in and notoriety for their own careers.  

I pat on the back anyone who is passionate about what they believe in or against and stand up for it.

I am, however, against sensationalising facts and issues in the pursuit of self-promotion and a win over others at all costs, whether it be the truth or not.  

To win an argument one should be more knowledgeable about the facts the opposing side is arguing than they are. . . 

Landcorp scraps Shanghai Pengxin deal – Neal Wallace:

Landcorp will not renew its sharemilking contract with Chinese corporate dairy farmers Shanghai Pengxin when it expires at the end of next season.  

This brings to an end an arrangement that started in November 2012 when Shanghai Pengxin bought 16 Central North Island dairy farms that belonged to the Crafar family. . . 

Alliance enforces shareholding commitment to match supply – Allan Barber:

After many years competing for livestock without compelling suppliers to invest in the full number of shares required in principle, Alliance Group has seized the opportunity offered by Silver Fern Farms’ likely shareholding change to review its capital base.

The uncharitable observer would presume this action is necessary to raise more capital for balance sheet or investment purposes. However Alliance chairman Murray Taggart is adamant this move is all about correcting the imbalance between those suppliers who are fully shared up and those who have made a lesser commitment. The adjustment will take place gradually in line with the rate of supply with deductions of 50 cents per lamb, sheep or calf, $2 per deer and $6 per head of cattle. . . 

Has our dairy industry gone too far? – Julian Lee:

We all know the importance of our dairy industry and its existence to our country.

It’s our number one industry — we get that.

But has dairy gone too far in the beautiful Mackenzie Country?

The Mackenzie Basin is a stunning piece of landscape in the South Island — a desert spotted with electric blue lakes surrounded by mountains.

It is the last place you would think you would want to put cows. . . 

Open Country Dairy posts record annual profit in 2015 – Tina Morrison:

(BusinessDesk) – Open Country Dairy, the dairy manufacturer controlled by Talley’s Group, posted a record annual profit last year even as revenue fell.

Profit increased 16 percent to $34.4 million in the year ended Sept. 30, 2015, according to the Auckland-based company’s annual report. Revenue slid 24 percent to $688 million while the cost of sales sank 28 percent to $620.5 million, according to the accounts.

The company didn’t pay a dividend and has previously said it was investing in infrastructure for future growth. . . 

Weaknesses in industry cohesion and international marketing are costing kiwi farmers:

Federated Farmers Meat and Fibre Chair Rick Powdrell is calling for action to be taken to address issues in the marketing of kiwi lamb overseas – particularly in the UK – to prevent our sheep farmers continuing to face low returns.

Speaking at Federated Farmers Meat & Fibre Council in Wellington today, Mr Powdrell said meals featuring lamb had fallen 7% in the UK, while lamb consumption in the US was rising at 10% per year.

Mr Powdrell has just returned from the American Sheep Industry Conference in Scottsdale, Arizona, where he had seen first-hand some of the initiatives that are underpinning this growth. . . 


Rural round-up

November 6, 2015

Lochinver Station sells to New Zealand buyer:

One of New Zealand’s largest farms, Lochinver Station in the central North Island, will remain in New Zealand ownership following its sale for an undisclosed sum to privately owned New Zealand farming group Rimanui Farms Ltd.

It will take over the ownership of the 13,843 hectare sheep and beef station, upon settlement of the sale in March next year, from one of New Zealand’s largest private companies, Stevenson Group Limited, which has owned it for more than half a century.

Bayleys Real Estate recommenced marketing the property last month after the Government announced it had turned down an Overseas Investment Office application from Chinese company Shanghai Pengxin’s subsidiary Pure 100 to buy the property. . . 

IrrigationNZ calls for 350,000ha more land to be irrigated – Sophie Boot:

(BusinessDesk) – IrrigationNZ is calling for a dramatic escalation in irrigation, saying New Zealand could bring water to an additional 350,000 hectares by 2025, boosting agricultural production and providing a buffer against weather events such as El Nino-induced drought.

The lobby group wants a 50 percent increase in irrigated land in the next 10 years, according to its industry snapshot released today. New Zealand currently has about 720,000 hectares of irrigated land, and IrrigationNZ has produced a map showing where irrigation could be expanded, pushing total watered land to more than 1 million hectares.

Chief executive Andrew Curtis said New Zealand’s primary production growth is being hampered by a lack of a reliable water supply, which ultimately holds back economic growth. . . 

No jobs?  move to the regions, urges govt:

Unemployed people are being urged to look to the regions for work by the government, after the unemployment rate broke the 6 percent mark yesterday.

The rate is now at its highest point in two years and economists have predicted that it is likely to rise further.

Listen to more on Morning Report ( 4 min 32 sec )

But Steven Joyce, Minister of Tertiary Education, Skills and Employment told Morning Report it was a “multi-regional story”, with lot of shifts around the country.

He said that in some regions such as Otago and Northland, there were shortages of people applying for jobs, and unemployed people should consider moving if they could. . . 

Forestry joins GIA biosecurity agreement:

The forestry industry has become the sixth industry group to join the Government Industry Agreement (GIA) biosecurity partnership, Primary Industries Ministers Nathan Guy and Jo Goodhew have announced today.

“It’s great to have the New Zealand Forest Owners Association (FOA) onboard, working with the Ministry for Primary Industries to manage and respond to the most important biosecurity risks,” says Mr Guy.

“A growing number of industries have now signed up to work together with the Government through the GIA.” . . 

Forest defence bolstered by agreement with government:

The Forest Owners Association says having a biosecurity agreement with the government is a vital part of the forest industry’s defence system.

FOA chief executive David Rhodes and primary industries minister Nathan Guy today signed what is known as a Government-Industry Agreement at Parliament. The agreement defines where responsibilities and costs will fall in the event of an outbreak of a serious forest pest or disease.

“For 50 years we have had a forest health surveillance scheme that is seen by overseas experts as one of the best in the world. But being ‘best’ is not good enough, we need it to be as near to perfect as we can make it,” says Mr Rhodes. . . 

FMG's photo.


Rural round-up

October 15, 2015

Farmer saved seed to be retained:

The recently concluded Trans-Pacific Partnership trade talks have created disappointing doomsayer discourse.

Some misinformed commentators have a view that farmers will be stopped from saving some seed from their crops.

NZ Plant Breeding and Research Association (PBRA) President Tom Bruynel says there is no intent at all by the seed industry to get rid of farmer saved seed.

He says the Association and the Arable Industry Group of Federated Farmers have been jointly saying that the right to save seed needs to be part of any updated plants legislation and there is agreement in principle that there be a fair and simple system of royalty collection for seed that has been kept back for sowing. . . .

Judicial review sought of Lochinver decision:

Pure 100 Farm Limited (Pure 100), a subsidiary of Shanghai Pengxin, is seeking a judicial review of the Government’s decision to decline its application to purchase Lochinver Station.

Announcing the decision, Terry Lee, Director of Milk New Zealand (a subsidiary of Shanghai Pengxin) said the aim of the review is to obtain clarity on the ‘counterfactual’ to be used when assessing sales of non-urban land of greater than 5 hectares to overseas investors.

“To assess the benefits of an investment in such land, the regulator assesses the application against 21 factors which are laid out in the Overseas Investment Act and the Overseas Investment Regulations. These benefits are assessed relative to what would have occurred if this particular investment was not to occur i.e. ‘the counterfactual’. . . 

Ploughing the perfect well-turned furrow – Kate Taylor:

The drawcard of ploughing competitions for Tirau farmer Angela Taylor are the challenge and the camaraderie.

“There’s a lot of technique to it and you need a lot of concentration,” she says.

“There’s the satisfaction of achieving and improving, and the pride when you look at the straight furrows afterwards.” . . .

Innovation key to food security – Daniel Kruithoff:

AUSTRALIAN Prime Minister Malcolm Turnbull has put innovation at the heart of the government’s efforts to improve the country’s global competitiveness.

The government’s renewed focus on the pivotal role innovation plays in helping us overcome complex challenges is welcome.

And I can think of no more complex challenge than sustainably producing enough food to meet rapidly rising global demand.

It is hard to not be alarmed by the looming collision of a rapidly growing population and a changing, more volatile climate. . . 

Organic GMOs Could Be The Future of Food — If We Let Them – Ferris Jabr:

Two years ago, I traveled to Woodland, California, to meet scientists who were developing tastier and more nutritious fruits and vegetables. On the way to the research center, my taxi driver asked what had brought me to town. “Well,” I started, “I’m a journalist and I’m here to visit Monsanto.” “Monsanto? They do all that unnatural GMO stuff, right?” “They do make a lot of GMOs,” I replied, “but the scientists I’m visiting do not use genetic engineering.” Instead, they perform marker-assisted breeding. They chip off tiny bits of seeds and young plants and analyze their genes in search of desirable traits. Then they use that information to decide which seeds to plant and, later, cross-pollinate and which ones to reject, speeding up the traditional plant breeding process. “And that’s not GMO?” my driver asked. “Since they are just reading the DNA, not changing it, it’s technically not a form of genetic engineering,” I answered.

I was about to go on, but I caught myself. In part because I worried that I was on the verge of subjecting another human to an unexpected seminar on plant genetics. But, more fundamentally, because I realized that what I had just said was wrong. Of course the breeders at Monsanto were changing the plants’ DNA. That is what breeders everywhere have done for centuries, regardless of their tools. That is what the pioneers of agriculture started doing at least 10,000 years ago. That is what sex itself does: it shakes up DNA. In that moment, I realized just how meaningless the term GMO is, and how obfuscating it is, too. . . 


Ministers say no to Lochinver sale

September 17, 2015

Ministers have declined an application by a foreign company to buy Lochinver Station:

An overseas company’s application to purchase Lochinver Station has been declined because the benefits to New Zealand are not substantial and identifiable, Ministers Paula Bennett and Louise Upston say.

Pure 100 Farm Ltd, a subsidiary of China-based Shanghai Pengxin, applied to the Overseas Investment Office (OIO) last year to buy the 13,800 ha farm near Taupo for $88 million.

“Because Lochinver Station is classified by law as sensitive land, Ministers must consider whether the application meets the requirements set out in the Overseas Investment Act,” Associate Finance Minister Paula Bennett says.

“While we recognise and support the importance of overseas investment, the Overseas Investment Act states it is a privilege for overseas people to own sensitive New Zealand assets and therefore requires such investments to meet statutory criteria for consent.

“After detailed and careful individual consideration, we are not satisfied there will be, or is likely to be, a substantial benefit to New Zealand – a key requirement for applications of sensitive land of this size.”

While the OIO said the question of whether the benefits of the potential investment to New Zealand are or could be substantial and identifiable was finely balanced, it recommended approving the application.

“We agreed parts of the proposed investment could benefit New Zealand but in our judgement on the overall balance of evidence, the benefits are not likely to be substantial and identifiable,” Land Information Minister Louise Upston says.

“This proposed sale didn’t pass a test we are required to exercise Ministerial judgement on.

“This is an example of our system working well.  The OIO conducted a thorough investigation before making a finely balanced recommendation.  Ministers carefully assessed the evidence and ultimately came to different view.”

A summary of the reasons for the Ministers’ decision can be found here.

This decision shows the bar for overseas ownership of farm land is set very high.

It is very difficult for a would-be foreign buyer to prove that it would provide more benefits than a local one, even if the local is hypothetical.

 


Rural round-up

July 24, 2015

Certainty underpins healthy community :

Federated Farmers have placed an emphasis the importance of certainty within the primary sector as a key component of a thriving economy.

Speaking at the Local Government New Zealand conference, Federated Farmers president Dr William Rolleston told councils the number one issue facing the primary sector needs was certainty, and with certainty came the ability to make investment decisions that underpinned a thriving economy. 

Rolleston also spoke about the Resource Management Act (RMA), and heavy burden it placed on the rural sector.  . .

Shanghai Pengxin puts all its farms up for sale – Gerard Hutching:

Chinese company Shanghai Pengxin’s total farm assets in New Zealand are up for sale, including 16 farms and a conditional agreement to buy Lochinver Station – but they are unlikely to be sold.

Because the company wants to restructure, the Overseas Investment Office (OIO) requires it to offer its assets for sale to New Zealanders.

The 16 dairy farms totalling 7885 hectares are the former Crafar family farms, bought controversially for $200 million in 2012.

They were listed for sale on Trade Me on Sunday on a “price by negotiation” basis and by Tuesday had been viewed 657 times. . .

Paraparaumu farmer is looking to give away his best friend to a loving home – Jessy Edwards:

Brian Arnopp is being eaten out of house and home by his best mate, and it’s finally got too much for him.

So now Mr Bull is going free to a good home.

Arnopp, of Paraparaumu, has looked after Mr Bull since he was left at the 77-year-old’s farm four years ago. . .

Pipfruit industry on track:

The New Zealand pipfruit industry recently regained its position as the world’s most competitive pipfruit industry, making this year’s conference time to reflect, says Pipfruit NZ.

The pipfruit industry, which is due to hold its annual conference in Wellington in August, is one of the fastest growing primary sectors in the country. Exports have increased in value from $340m in 2012 to $536m in 2014. The industry is well on track to reach its $1bn export target by 2022.

Pipfruit NZ says the annual conference will be an important networking and educational event for the industry. . .

Time to show your true nature:

Farmers are being urged to enter the Ballance Farm Environment Awards, which now include the Auckland region.

Entries open on August 1.

Facilitated by the New Zealand Farm Environment (NZFE) Trust, the awards promote best-practice land management by showcasing the work of people farming in a way that is environmentally, economically and socially sustainable. . .

Farmers need government to heed ’10 point’ local government plan:

Federated Farmers want the government to give immediate attention to the Local Government New Zealand’s ’10 point plan’ for rates reform.

Federated Farmers Local Government spokesperson Katie Milne says the disastrous dairy payout prices in particular mean farmers want urgent action on inequities in the rates they pay to their local bodies.

“We farmers can’t control international prices. Neither can the government. But the government can legislate rates reform. It all helps, and the sooner the better,” Katie Milne says. . .

Te Karaka student awarded scholarship:

A Te Karaka student has been awarded the Mangatu Blocks and Ravensdown Scholarship, providing three years study at Auckland University.

Roland Taupara Brown completed his secondary schooling at Gisborne Boys High School where in his final year he was named Dux for 2014.

Brown says the scholarship provides him with a unique opportunity to focus on his studies in science and commerce at Auckland University. His Bachelor of Science degree will focus on green chemistry and his Bachelor of Commerce will provide the business disciplines to ensure a balance between environmental and commercial considerations. . .


Chinese-NZ partnership wins

May 9, 2015

The company which bought the former Crafar farms has won an award for turning the business around using New Zealand management, labour and skills.

Milk New Zealand, owned by Shanghai Pengxin, was last night named supreme winner at the 2015 HSBC New Zealand China Trade Association Business Awards in Auckland.

Shanghai Pengxin bought Crafar Farms in 2012 for more than $200 million.

Gary Romano, chief executive of Pengxin International, said the award was recognition for how they had run the farms.

Shanghai Pengxin’s purchase of the farms was controversial – but Mr Romano believed it had been good for New Zealand.

“Look, as a New Zealander, I did think to myself, am I doing something that’s good for New Zealand as well as my company?

“After speaking to a number of economists and thinking clearly through this I’ve come to the view that there is absolutely no downside to foreign investment.

“I think some of the things that the Overseas Investment Office does are very correct.

“So, things like making sure there’s been no money laundering, the right amount of taxes have been paid, people of good character, and that we’ve paid a fair price for the assets in a contestable process – all those things are very, very useful for New Zealand.”

He said once those tests had been passed, such investment provided oxygen for the economy. . .

The combination of foreign investment and local skills has been a winning one which shows the benefits that can result from allowing overseas ownership of some land.


Foreign ownership boosts wages:

September 5, 2014

Trans Tasman on foreign ownership:

The proposed sale of the 13,800ha Lochinver Station, near Taupo to Shanghai Pengxin, which bought the Crafar Farms in a joint venture with Landcorp, reignited the political debate about foreign investment and purchases of Kiwi land. Labour has promised to block the sale if it is not approved before the September 20 election and stop land sales over 5ha except in rare circumstances. Finance spokesman David Parker says land sales to foreigners do not increase output and do not release capital to be reinvested by the NZ owner to create new jobs. Finance Minister Bill English, however, reckons the Govt has struck the right balance between attracting foreign investment and tightening the rules for overseas investment in sensitive land.
Public Disquiet. Chinese investors have been making other investments in the farm sector: they have a minority stake in Blue Sky Meats and the Overseas Investment Office is considering an application to buy Prime Range Meats. Farm leaders have become disquieted. Federated Farmers supports positive overseas investment in NZ’s farming system but is concerned there would be little benefit to NZ if the Lochinver deal is clinched. President William Rolleston says “NZ absolutely needs foreign investment” but only if it benefits the local and national economy. He wants a “substantial and identifiable” benefit test incorporated in overseas investment eligibility criteria. Public opinion survey results this week suggest a majority of voters similarly approve of farm sales to foreigners only when it brings a significant advantage over an NZ buyer such as jobs. Almost 33% want farm sales to foreigners banned.

National raised the already high hurdle foreign buyers have to jump before a purchase is approved and benefits above and beyond those sales to domestic buyers would provide is one of the criteria.

 Better For Workers. An upcoming working paper by Motu Economic and Public Policy Research economists throws some light on the economics by examining how employment in foreign-owned firms affects NZ workers’ earnings. Using data from Statistics NZ’s Integrated Data Infrastructure, which tracks workers as they move between firms, the researchers found workers in foreign firms tend to receive, on average, around 14% higher monthly starting earnings than workers in domestically-owned firms. Compositional differences are the main explanation: foreign firms tend to be bigger and employ workers who would have received relatively high wages regardless of where they worked. The authors also found under-25 year olds get greater gains from joining a foreign firm and smaller losses on exit than older groups, while more highly skilled workers attract a stronger wage premium while working in the foreign-firm sector. In short, foreign firms not only tend to hire more highly skilled workers; they also remunerate these workers more generously.

A very small percentage of land  – around 2% – is in foreign ownership now.

The problem is one of perception based on emotion taking no account of the facts and benefits which include better wages for staff employed by foreign owners.


Rural round-up

August 18, 2014

The circus of foreign ownership – Dr William Rolleston:

The Election has suddenly sparked into life. It was not a policy, a pratfall or a stunt, but Shanghai Pengxin Group’s Overseas Investment Office (OIO) application to buy Lochinver Station.

While Federated Farmers has taken the principled position of trying to learn what the ‘substantial and identifiable benefit’ to New Zealand is of this proposed sale, others have gone off the proverbial deep end.  National has been far too dismissive of concerns being raised in some quarters. Labour has gone to the opposite end by announcing they’d block the sale, along with the Greens.  Meanwhile, NZ First will go further and stop all foreign sales of New Zealand farmland.  That seems to be the position of Colin Craig, who stepped into Mr Peters shoes by breaking this story.

What everyone seems to have forgotten is process.  Our overseas investment rules are meant to operate on fair play under the guise of the OIO.  Instead, it has turned into an election political circus. The coverage of which, has gone global, given the media who have contacted me. . .

Meat and fibre’s time to shine – Rick Powdrell:

Boy oh boy, doesn’t it feel good to be a sheep and beef farmer for once. Of course it wasn’t always that way.  We were the dairy industry for decades, almost as soon as the Dunedin slipped out of Port Chalmers in1882, we rode the sheep’s back.  The good times operated under a simple business model.  We grew meat and fibre and Britain needed it.

Through war and peace, these good times seemed destined to run forever.  Our success blinded us to what the bright sparks at companies like DuPont were doing.  That was until they ‘wool-jacked’ us with oil based fibres.  That wasn’t helped by lamb being seen in the 1970s as your grans’ meal. You could have lamb cooked anyway you wanted as long as it came in a roasting tin.  Other meats became trendier and in some instances, cheaper, while our industry was trapped in a Sunday roast.  . .

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Demand drops for malting barley – Annette Scott:

A shrinking number of Kiwi beer drinkers is creating less demand for malting barley.

As beer consumption falls, coupled with higher prices for New Zealand barley, breweries require less malt and malting companies less barley.

Marton-based malting company Malteurop NZ operations manager Tiago Cabral said New Zealanders’ drinking habits were having an impact on the company. . .

 

Worth sharing - thanks The Horse Mafia

NSW $10m beef deal with China – Roderick Makim:

NSW beef suppliers have secured a $10 million export deal to the Chinese market.

Producers including Andrews Meat Industries in Lidcombe and the Northern Co-operative Meat Company Ltd in Casino are among the NSW suppliers involved in the deal, Deputy Premier Andrew Stoner said today.

Mr Stoner announced the deal while visiting Hong Kong and Shenzhen for a three-day trade mission along with representatives from a range of NSW food companies. . . .


70,000,000 reasons for sale

August 10, 2014

Tim Worstall, writing at Forbes, says there’s 70,000,000 reasons for selling Lochinver Station:

There’s a slightly bizarre argument going on over in New Zealand over the ownership of a large farm, Lochinver Station. The argument is over whether it’s right or not for it to be sold to a Chinese company. There’s so many things wrong with even having the debate that it’s difficult for we foreigners to get our minds around it. For a start the very definition of private property is that you can dispose of said property as you wish. If you can’t then it’s not actually private property any more. But more than that the basis of the argument against allowing the sale seems to be that the sale should be in New Zealand’s economic interest as a whole. Which, of course, it is, there’s 70 million benefits coming into the country in the form of the $70 million that’s being paid for it. Why the debate continues after this is a mystery. . .

The debate continues because of emotion and politics.

. . . To which I would just add that one about the 70 million benefits. A foreigner (a corporation, an individual, it doesn’t matter) is bringing money into the country to pay for Lochinver Station. The price that’s being paid is, by definition, everyone’s best guess as to the total current value of all of the future profits from that farming operation. This is thus an addition of $70 million to New Zealand’s capital stock. Before, there was the farm worth $70 million. After the sale there will still be the farm, which will still employ people, pay taxes and so on. And also the family operation that used to run the farm now has $70 million. The deal adds to the capital stock of the country and what makes a place richer is increasing the amount of capital that is added to the labour of that place. Thus there’s 70 million benefits to the sale, each dollar being paid over being a benefit of one dollar.

Other than a xenophobic appeal to economic populism (and those with long memories might care to ponder on where said autarkic populism led the economy under Robert Muldoon) there’s really nothing at all to support the idea that Lochinver Station cannot be sold to anyone at all who wants to buy it.

Private property rights and economics mean nothing to the xenophobes opposing the sale.

They also fail to see the benefits to the seller and the country from those $70,000,000 and all the other money the would-be purchaser, Shanghai Pengxin,  will have to put into the farm to meet the very strict criteria of the Overseas Investment Office.


Labour tries to out-Winston Winston

August 5, 2014

Labour has forgotten that is trying to out Winston-Winston Peters on sales of land to foreigners:

The next Labour Government will keep rural and residential land in Kiwi hands, Labour’s Finance spokesperson David Parker says.

“New Zealanders are sick of seeing their farms and homes sold to overseas buyers with the profits and opportunities going offshore. No overseas person has the right to buy our land.

The opportunities stay here where the land is, so do the jobs which go with it.

The profit is only what’s left after costs – including the purchase price, wages, repairs and maintenance, development and tax – are paid.

A friend is New Zealand manager for overseas investors who own several farms. That company reinvests all its profit in the farms and adds more money from other investments elsewhere for development which includes a very expensive experiment with organic farming.

Their money is making the farms better and they are putting far more into the country than they are taking out.

“In all but the rarest of cases, sales of rural land to overseas buyers will be banned. Non-resident investors will also be banned from buying existing Kiwi homes.

What will those rarest cases be and who will decide?

“Changing who owns what already exists does nothing to increase New Zealand’s output. It just sells off New Zealand’s profit stream and kills off the Kiwi dream of owning our farms and homes.

It could increase New Zealand’s output if the investment improved production.

“Labour will reverse the current approach so that overseas buyers of rural land will have to prove they will create more jobs and exports than any New Zealand investor. Given New Zealanders are among the best farmers in the world it is an extremely hard hurdle to get over.

The hurdles overseas must leap are already very high and include the creation of jobs.  Among other conditions local buyers don’t have to meet but foreigners do is allowing public access.

New Zealand farmers are very good but they often lack the capital to be even better.

“This will ensure our farms are not priced out of the reach of New Zealanders.

If that is the case it would also mean the vendor gets less to invest elsewhere.

“We will also limit the discretion of the minister to ignore recommendations from the Overseas Investment Office.

“Labour will also restrict sales of residential homes to any non-residents unless they intend to move here, helping to keep the Kiwi home ownership dream alive, especially for young New Zealanders currently locked out of the housing market.

“The National Government is ignoring the legitimate concerns of New Zealanders about New Zealand land and houses being sold to overseas interests.

These concerns are largely based on emotion rather than facts.

A very small proportion of farm land is owned by foreigners and the problems with housing are largely a result of planning restricting the supply in Auckland and the earthquakes in Christchurch.

“Instead of accusing New Zealanders of being xenophobic, John Key and Steven Joyce should respect New Zealanders’ desire to keep New Zealand land in New Zealand hands,” David Parker says.

The accusation of xenophobia is because the protest is loud when it is a Chinese buyer and quiet to non-existent when it is from other countries like the USA, Britain, Australia or Germany.

Wee parties can get away with outrageous policies because they can always use the excuse they didn’t have the numbers to get them enacted.

The bigger parties are usually more circumspect.

Labour has forgotten this in trying to out Winston Winston Peters with this dog-whistle to the xenophobic.

It is also ignoring the benefits from the sale:

Stevenson Group, the concrete, quarrying and engineering firm that owns Lochinver Station, ran an extensive tender before agreeing to sell the 13,843 hectare farm to Shanghai Pengxin and says it will reinvest the funds in other businesses. . .

 The Stevenson family has owned Lochinver for 60 years but started as a drain-laying business in 1912, expanding into quarrying and construction in the late 1930s, and making concrete blocks from 1946. The original 5,260 ha Lochinver farm was acquired in 1958 and the family expanded to 16,595 ha “breaking the wild country into farming land” with “an enormous amount of hard work.”

“Farming is not the core business of Stevenson Group,” chief executive Mark Franklin told BusinessDesk. The company is freeing up capital to invest in other businesses such as expanding its Drury quarry, he said.

Franklin said the company had “really intensive discussions with lots of people both domestically and internationally. You can be very clear, anyone who was interested, I have spoken to.”

While Lochinver has a rateable value of more than $70 million, the purchase price hasn’t been disclosed. Still, Franklin said Pengxin’s offer wasn’t necessarily the highest on price alone and his company had considered a range of factors including retention of workers and the future of the property. Lochinver was more a farm enterprise than a farm. “In New Zealand a lot of people own farms but this is part of a supply chain.”

He said Pengxin had a long-term strategy to build a vertically integrated business.

The value in the property was “in its ability to grow a lot of grass,” which made it attractive for both dairy support and wintering stock, he said. Sheep farming was likely to remain a core part of the business. . .

The owner gets a large amount of money to invest in its core business, the new owner will bring money into the country, spend more on running and improving the property which will require employing locals and using local goods and services.

Federated Farmers which supports foreign investment in general has some concerns over the sale of Lochinver.

While Federated Farmers supports positive overseas investment into New Zealand’s farming system, it is concerned the potential sale of Lochinver Station to Shanghai Pengxin Group Co. Limited, may not provide sufficient benefit to New Zealand.

“Since there is no requirement to publicly notify applications to the Overseas Investment Office, Federated Farmers is frankly uneasy about the potential sale of Lochinver Station to Shanghai Pengxin,” says Dr William Rolleston, Federated Farmers President.

“New Zealand absolutely needs foreign investment but it has to be of benefit to the local and national economy. 

“That is why a ‘substantial and identifiable benefit’ test was incorporated into the overseas investment decision tree, further bolstered in 2012 by a High Court decision adding a “with and without” counterfactual test. 

“This was to ensure any investment, such as the one being proposed, has benefit over and above just making a farm work better.  Since Lochinver Station is highly regarded in farming circles there must be something very special and we are keen to know what that is. . .

He might be reassured by a speech Prime Minister John Key made to Federated Farmers in 2010:

. . . I want to take this opportunity to outline the Government’s position on overseas investment and talk about the changes we are making to the approvals regime.

In summary, we recognise the huge contribution that overseas investment makes to Kiwi jobs and Kiwi incomes.

New Zealand benefits from openness, both in trade and in investment.

However, New Zealanders have legitimate concerns about some aspects of overseas investment, particularly when it comes to land.

I share those concerns.

Good policy is a matter of striking the right balance.

We have reviewed the rules around overseas investment. For the most part, we think those rules are appropriate and the overall legislation is sound.

However, we have made a few adjustments to the approvals regime and given ministers increased flexibility to consider a wider range of issues when assessing proposed investments. . .

What I want to say first is that you, as individual farmers, and as members of Federated Farmers, have been right in the middle of recent debates about overseas investment, because a lot of those debates have been about land.

I’m sure that between you, you have some strong views and quite possibly some mixed views about overseas investment.

Unfortunately, much of the debate in recent months has been stirred up by politicians who are more concerned about getting on the news than they are about well-thought-out policy.

We are likely to see more of this tub-thumping and political posturing in the lead-up to next year’s election.

Politicians who were unwavering advocates of trade and investment when they were in government have somehow turned into defenders of Fortress New Zealand while in opposition.

Their views appear to have changed 180 degrees, for the sake of politics.

That is a shame, because at stake here are New Zealand jobs, New Zealand incomes, and New Zealand futures.

The reason we allow investment to flow between countries – both into New Zealand and out of New Zealand – is because it benefits New Zealanders.

We don’t do it for any other reason – we do it because we benefit from it.

In particular, overseas investment in New Zealand creates jobs, boosts incomes, and helps the economy grow.

Overseas capital can make things happen here that wouldn’t otherwise happen, grow businesses that wouldn’t otherwise have the means to grow, create jobs that otherwise wouldn’t exist, and pay wages that are higher than they would otherwise be.

Overseas capital makes New Zealand a vastly more productive country.

So there is absolutely no way we could enjoy the standard of living we do without overseas investment.

And part of that standard of living is being able to afford the education, law and order, and health services that our families want.

A recent study concluded that overseas investment in New Zealand lifted national income by around $5 billion between 1996 and 2006. That is an estimate of the return to New Zealand from overseas investment, over and above the cost of paying interest and dividends on that investment. . . .

He gave examples from the wine industry.

Since the year 2000 the number of wineries in New Zealand has almost doubled, and the industry directly employs 6,000 people.

This expansion of the wine industry into one of our most important export industries has largely happened because of overseas investment.

That investment has not just been into big producers, like Montana, but smaller wineries like Craggy Range, Sacred Hill, Dry River and Te Awa.

Overseas investment has allowed the industry to grow exponentially, and also develop from being a small and family-based sector into a more capital-intensive and technologically-advanced industry with real global connections.

Overseas investment also plays a positive role in New Zealand agribusiness, providing a vital source of capital for ongoing expansion and growth. PGG Wrightson, Synlait, CRV Ambreed and Anzco are good examples of such investment. . .

He also pointed out investment is a two-way street.

New Zealand businesses and individuals are themselves investing abroad.

There has been considerable investment, for example, by New Zealand dairy farmers in overseas farms. Fonterra, of course, has processing facilities in a number of different countries.

A free flow of investment also allows New Zealanders to diversify their savings across different countries and different industries. Most of the savings that are in the Super Fund, for example, and in many KiwiSaver funds, are invested overseas.

In fact, the total amount of equity investment into and out of New Zealand is surprisingly balanced. According to the latest figures, New Zealanders have around $53 billion of equity invested abroad while overseas investors have $61 billion of equity in New Zealand.

So international flows of investment – both into and out of New Zealand – are very important for our standard of living. . .

Then he addressed concerns about foreign investment:

I’m sure most people have these concerns from time to time, because as New Zealanders we have a very real and very profound sense of attachment to the land.

For one thing, our economy is based on agriculture so we recognise and respect that the land has an important economic value.

We also have a strong tradition of aspiring to own land – our own house, section, lifestyle block, farm, or block of native bush. We are not entirely comfortable as tenants – we want to put our roots down and call some place our own.

We also value outdoor pursuits – tramping, hunting, fishing, camping and picnicking – and even when we don’t do those activities, we like the fact that we could if we wanted to.

Our tourism marketing is very focused on New Zealand’s natural beauty, and we’re proud of it.

I have recently said myself that we don’t want to end up in a position where New Zealanders are tenants in their own country.

So I think the fact that people are concerned with overseas ownership is perfectly legitimate.

But we should be careful not to let those concerns get out of hand.

For a start, about a third of New Zealand – including our most iconic land – is protected by being in the conservation estate. So no-one from overseas can come in and buy Mt Taranaki or the Franz Josef Glacier, for example.

Second, it is a simple fact that land can’t change nationality. People can change nationality, of course, and factories can be relocated overseas. But a piece of land in New Zealand will always be here in New Zealand.

Because it will always be here, the use of that land will always be subject to New Zealand laws and regulations. And ultimately we as New Zealanders get to determine what those laws and regulations will be.

Third, and contrary to what some people might think, there hasn’t been an acceleration of overseas sales in recent years.

In fact, as at a couple of days ago, only 11, 203 hectares of land has been sold so far this year. That is certainly well below the peak of 380,000 hectares that were sold in 2006.

Fourth, the issue of whether businesses and properties are owned by New Zealanders or people from overseas, is for the most part, squarely in our own hands.

What I mean is that no-one can be forced to sell their business to an overseas investor, just as no farmers can be compelled to sell their land to foreigners.

Obviously with mortgagee sales or receiverships things get a little more complicated but, in general, people who feel very strongly that New Zealand-based assets should remain in New Zealand hands are free to sell only to New Zealanders.

The problem is that it’s people who don’t own the land who are complaining and wanting to dictate to whom the owners can sell.

Moreover, New Zealanders can always buy land and other assets back. What makes that difficult isn’t the rules around overseas investment, it is the fact that New Zealand has a poor savings record and therefore a relatively small stock of capital available for investment.

If, as a country, we saved more, we would own more of the assets in New Zealand, including land, as well as being less in debt to overseas lenders.

Finally, there are specific safeguards contained in the Overseas Investment Act and in the regulations which the government makes under that Act.

Over the past year or so the Government has been reviewing this system of rules, to make sure we have got the balance right between three key objectives:

welcoming desirable investment, in recognition of the benefits it brings for New Zealanders

providing a stable investment environment, where the rules are settled and everyone is clear about what they are; and

addressing public concerns about overseas investment, particularly in regard to land.

This review has come to three conclusions.

The first conclusion is that the Overseas Investment Act is a fundamentally sound piece of legislation.

The Act makes it clear that it is a privilege for overseas people to own or control sensitive New Zealand assets.

In particular, it lays out that foreign investment in land is only acceptable if it substantially benefits New Zealand, according to a range of factors which include, among other things:

  • the creation of new job opportunities in New Zealand
  • the introduction into New Zealand of new technology
  • increased export receipts for New Zealand exporters
  • the introduction into New Zealand of additional investment for development purposes
  • increased processing in New Zealand of New Zealand’s primary products
  • protection of native bush and other indigenous vegetation; and
  • protection of game species and walking access.
  • In addition, farm land has to be offered on the open market so that New Zealanders can bid for it as well.

These are very stringent criteria.

In fact, these are the very same criteria that Phil Goff was trying to pass off as brand new policy a few weeks ago. I welcome his endorsement of the current provisions of the Overseas Investment Act which, of course, was passed by his government back in 2005. . .

The third conclusion we came to was that a couple of additions should be made to the existing rules.

These additions would make sure that all public concerns about overseas investment, both now and in the future, could be covered off under the rules.

So the Government is adding two more factors that ministers must consider when they assess the benefits of a proposed overseas investment in New Zealand land.

The first new factor is very wide-ranging and looks at whether New Zealand’s economic interests will be adequately promoted by overseas investment.

This will allow ministers to consider, for example, whether any of our key exports are in danger of being controlled by an overseas entity, or whether there are non-commercial motivations driving a proposed overseas investment.

The second new factor is a “mitigating factor” which looks at whether the investor has a meaningful commitment to New Zealand involvement in the running or oversight of the investment.

That could include, for example, part ownership with New Zealanders, appointing New Zealanders to the board, or listing on a New Zealand exchange.

These two new factors will be weighed up alongside all the existing factors when ministers consider applications for investment.

We are also going to outline the Government’s policy on foreign investment more clearly by amending the Directive Letter issued to the Overseas Investment Office.

This will make things clearer for both the Office and for overseas investors.

So in conclusion can I stress that we allow overseas investment to flow between countries – both into New Zealand and out of New Zealand – because it benefits New Zealanders.

With the appropriate checks and balances in place, this investment is good for jobs, wages and growth.

After reviewing the overseas investment regime, and making some amendments to it, the Government is satisfied that we do now have the appropriate checks and balances. . .

National strengthened those checks and balances.

Foreign investors must jump very high hurdles and if they don’t meet the conditions imposed on them by the OIO – conditions which are strictly monitored – they cannot keep the property.

The Overseas Investment Office has yet to make its decision on the sale of Lochinver.

If it does approve the deal, the strict criteria it must apply, made stricter by National, will ensure that the benefits to New Zealand are greater than any which would come from the sale to a New Zealander.


Debate policy not specific purchase

August 3, 2014

Pure 100 Farm Limited, a local subsidiary of Shanghai Pengxin Group has signed an agreement to buy Lochinver Station between Napier and Taupo.

The Central Plateau farm acquisition is now before the Overseas Investment Office (OIO) and will then go through the Chinese regulatory approval process prior to settlement.

The Group currently owns 16 farms in the North Island and has significantly enhanced these assets. According to a Land Information New Zealand report[1], PNZFGL (another local subsidiary) has been instrumental in the re-development and improvement of the North Island farm properties it owns.

The Group plans to secure operational synergies over time with this planned farm acquisition and some of its neighbouring North Island farms.

In March this year, the Group secured a 74 per cent stake in 13 farms in the South Island and has committed to capital improvements and implementing innovative industry concepts.

The Shanghai Pengxin philosophy is to work co-operatively through its local subsidiaries within the New Zealand farming industry and support new investment and innovative opportunities, as well as productivity enhancement, sustainable farming practices, and building supply chain capability.

It didn’t take long for the usual suspects to get agitated about foreigners buying land.

Lisa Owen started the interview with Steven Joyce and Grant Robertson on the topic:

Lisa Owen: . . . I want to start with you, Mr Joyce. Ownership of assets is what makes you wealthy. So what do you think of this 18,000 hectare Lochinver Station being sold to foreigners?

Steven Joyce: What I think it it’s election time because we’re getting a sale of land, and therefore a couple of people now – it used to be just Winston; now it’s Colin Craig as well – beating the anti-foreigners drum, and I suspect we’ll see a bit more of this between now and election day. But it’s as regular as every three years that this comes up.

Grant Robertson, it’s just electioneering?

Grant Roberston: Well, no. I mean, New Zealanders are actually sick of our assets being sold off, and it’s the same for farms as it is for Steven selling off energy companies. We want to see value held by New Zealanders. We don’t get this land back once it’s sold. It’s gone.

Joyce: Well, actually you do.

Robertson: Well, no, we don’t.

Joyce: No, you do.

Robertson: And it’s New Zealanders who need to have jobs being created from assets that we own. Our message for foreign investors is if you want to come into New Zealand, help create jobs.

Joyce: That’s right.

It is right, that is one of the criteria the Overseas Investment Office must take into consideration when approving a purchase of land by foreigners.

Roberston: Build a processing plant. But we don’t want to sell off the land like this.

Mr Joyce, this is—

Joyce: Well, actually, I need to answer that, because, actually, I mean, Grant, you’re interesting there, because I haven’t seen you out protesting James Cameron’s land purchases in the Wairarapa, so I’m assuming it’s only Chinese investors.

Robertson: No, it’s not. The allegation is just wrong, Steven.

Joyce: When did you go out and oppose purchasing James Cameron?

Roberston: We’ve never opposed foreign investment that is not productive for year.

Mr Joyce, can we–?

Joyce: Give me a chance. When did you go out and actually oppose the last purchase of James Cameron’s land? Where’s the press release on that?

Robertson: We have been opposing the purchases of dairy farms by anyone, and wherever they’re from, if it’s strategic land like this—

Joyce: But this isn’t a dairy farm. You know that, don’t you? This isn’t a dairy farm. . .

Robertson: That’s right. But this is about what New Zealanders want, and New Zealanders what to control their own land.

What he’s saying is that people want to control other people’s land. this land isn’t owned by New Zealanders in general it’s owned by individuals.

Joyce: So this is not a dairy farm and this is not James Cameron, therefore you’re opposing it?

Mr Joyce, I just want to ask you about your own leader’s comments.

Joyce: He’s against Chinese investment.

Robertson: Oh, for goodness sake, Steven.

Mr Joyce—

Joyce: Little xenophobia from the Labour Party to start the day off.

Mr Joyce—

Robertson: See, this is typical of the personal politics. He doesn’t want to debate what New Zealanders want, which is to control their own future. Steven’s happy to sell off our future rather than have New Zealanders in control.

Mr Joyce. Can I ask a question please, gentlemen?

Joyce: Yeah.

Your own leader has said that he doesn’t want us becoming tenants in our own country, but isn’t this exactly what is happening under your watch?

Joyce: No, it’s not. No, look, it’s a tiny amount. It’s actually a ridiculously small amount of land than under Labour, because, actually, under Labour, the average over the last five years they were in office, 90,000 hectares a year were sold to offshore purchasers. Under National, it’s been an average of 39,000 hectares a year. So it’s ridiculous for Labour to turn around—

So that’s the point, isn’t it? More under Labour, more under National. The pie being sold off is even bigger.

Joyce: But let’s look at the real benefit of international investment, actually, because, I think, all this hysteria which Grant’s trying to stoke this morning is actually incorrect, because there’s plenty of fantastic examples of international investment in this country which has brought real benefit. For example, Whirinaki, the big forestry processer in Hawke’s Bay, owned by OG for 43 years. The investment, it hasn’t had much—

So are you happy, Mr Joyce, that an enormous amount of productive New Zealand land is going offshore?

Land, productive or not can’t go offshore regardless of who owns it.

If foreigners own it some of the profit will go overseas but only after the owners have paid all the costs of running and improving the farm and also paid tax.

Robertson: Are you going to guarantee, Steven, that when this farm is sold off, this estate is sold off, that there will be some kind of added jobs? There will be processing coming and there will be something in the economy for New Zealanders? Rather than just selling off our—

Joyce: That’s one of the criteria that we put in in 2010, so absolutely.

Robertson: And you have not stuck to that.

Joyce: We have absolutely stuck to that.

Gentlemen, excuse me. We’ve spoken to sources at Tuwharetoa and other iwi who said this farm was outside of their price bracket. $70 million. So I’m interested to know where are the New Zealanders who are wealthy enough to buy our own assets? Isn’t that part of the problem?

Joyce: Well, actually, there’s plenty of New Zealanders that are wealthy enough to buy our own assets, but, look, the point of view is international investment is very important to New Zealand. It’s been very important all the way through, and it’s important to our future. And there are plenty of examples. I was actually at one the other day. Frucor, which is now owned by Suntory, a Japanese company, and they’re making big investments in their processing plant, and all the workers are in favour of that. Now, if you take the example of this particular company, Shanghai Pengxin, they have made investments in the older Crafar farms. Nobody, I think, is arguing that the Crafar farms used to be well-run. My understanding is there’s been some good investments out of that and more investments expected. So that’s all good stuff. There has to be a benefit to New Zealand—

Robertson: What Steven fails to understand here is that New Zealanders are completely sick of seeing their land sold off. This is about our lands and our future. Steven, the thing is we have learned our lesson.

I want to ask you—Mr Robertson, the Labour Party—No, no, let me—

Robertson: Steven Joyce refuses to learn the lesson that New Zealanders want land retained in New Zealand ownership.

Labour plans to stop foreign purchases. People who are not living in New Zealand, under Labour, would only be allowed to buy up to 5 hectares of land. So, would you stop the sale of this farm?

Robertson: Our criteria would definitely mean that a sale like this would be highly unlikely, unless—

Highly unlikely isn’t a no, it’s another yeah-nah answer from Labour which knows there are benefits from foreign ownership, which is why it allowed sales to go through when it was last in power.

Paul Walker makes some good points on this issue:

For efficiency reasons we want resources to be in the hands of those who value them most highly and the way to do that is sell them to the highest bidder. We want land (and other resources) to be used in the most efficient manner and the country of origin of the buyer is irrelevant to this. A thought experiment: ask yourself, Why are auctions used for so many goods? Its a way of finding out who values the good most highly. Whoever bids the most gets the goods. This is how we maximise the probability of getting an efficient allocation of resources. Secondly would a Labour government compensate the seller of the land for their policy? Under the Labour policy the seller would be forced to sell their land at a lower price than they would otherwise get (or not sell at all) and would a Labour government make up the difference between the actual sale price and the highest possible price? And if not, Why should the seller receive a lower return than they otherwise would?. And if this is a good policy for land why not implement it for other goods as well? What makes this idea land specific?

What makes land specific is emotion.

When PGG Whritghtson was purchased by a Chinese company no-one made a fuss about that yet the intellectual property that went with it in seed development may well have been more valuable than thousands of hectares of land.

But most of the fuss over foreign ownership of land is emotional.

It doesn’t take into account the benefits to the sellers and the country nor is it based on complete understanding of the area involved.

The issue is a hot-button one and should be debated.

But the debate should be on the big picture of how much land in foreign ownership is acceptable and any policy changes needed to ensure that. It shouldn’t be based on individual purchases, especially when it looks like at least some of the opposition is based on xenophobia.


Rural round-up

March 27, 2014

Guy prepared to help, but unwilling to interfere – Allan Barber:

Nathan Guy gave a very positive speech to Beef + Lamb NZ’s AGM on Saturday which covered three major points: what the government is doing for farmers, his vision for the red meat sector and thoughts on the discussions about industry structure.

Obviously, given MPI’s bullish view of agricultural exports, the Minister was extremely positive about economic performance. However he was at pains to point out the government’s role as an enabler, citing his focus on biosecurity resources, trade negotiations for market access, and investment in research.

He began by referring to his intention to strengthen resources at the border and to establish Government Industry Agreements (GIA) with various sectors which will ultimately involve the private sector in sharing the costs of biosecurity; different sectors are at various stages of negotiation on this issue. . . .

Project explores the potential of EID:

Warren Ayers farms 890ha of rolling country near Wyndham. The property runs 600 Perendale stud ewes and another 5,700 commercial ewes.

Lambing averages 135 per cent and lambs are finished to 17kg. Two-year-old replacement heifers are bought in annually for the 120-head Angus cow herd. Every year, all but the lightest 10 calves are sold at weaning. The policy is simple to manage and keeps the genetics of the herd diversified sufficiently that the same bull can be used for several years. For the past five years, the property has also wintered 650 dairy cows.

Warren has EID tagged his stud animals since 2006 and the commercial two-tooths have been tagged since 2009. . .

Fonterra begins construction on new IDR357 billion plant in Indonesia:

Fonterra today commenced construction on its first blending and packing plant in Indonesia, which will support the growth of its market leading consumer brands Anlene, Anmum and Anchor Boneeto.

Located in West Java, the plant is Fonterra’s first manufacturing facility in the country and its largest investment in a new manufacturing facility in ASEAN in the last 10 years.

Director General of Agro Industry at the Ministry of Industry, Panggah Susanto, joined Fonterra at an event in Jakarta to mark the official start of construction today.

Pascal De Petrini, Managing Director of Fonterra Asia Pacific, Middle East & Africa (APMEA), said that Fonterra Brands Manufacturing Indonesia Cikarang Plant will allow Fonterra to meet the ever-growing demand for dairy nutrition in Indonesia. . .

Dry conditions in Northland and Waikato remain a big concern:

Primary Industries Minister Nathan Guy says dry conditions in parts of Waikato and Northland remain a serious concern.

“Local authorities in Northland have announced the western parts of their region are in drought. This reflects the tough few months they’ve had as pasture has browned off.

“Cyclone Lusi has helped green tinges appear in some places, but the rainfall was erratic and insufficient. Western Northland and large parts of the Waikato remain very dry.

“The Ministry for Primary Industries is keeping a close eye on conditions here and elsewhere. I’ve seen for myself how dry things are on two trips to the Waikato in the last two weeks. . .

West Coast Northland drought declaration a relief:

The adverse event declaration covering drought in Northland’s West Coast the declaration will not provide a lot of direct financial assistance but will provide huge psychological relief.

“New Zealanders will get an inkling of what the guys on Northland’s West Coast have been going through. Not just since November, but since 2012 and even before that,” says Roger Ludbrook, Federated Farmers Northland provincial president.

“The big thing a declaration triggers is the Northland Rural Support Trust, so any farmer can approach the RST for free advice on farm management, or just someone to have a decent chinwag with.

“Beyond this, it doesn’t mean much financially unless the absolute worst happens. There is a safety net, but it is exactly the same as for any other New Zealander and carries the same eligibility rules.

“Then there is Inland Revenue and to be fair to them they aren’t unapproachable. . .

Drought-affected farmers encouraged to talk to their banks

Drought-affected farmers should talk to their banks said the New Zealand Bankers’ Association in response to increasingly dry conditions in parts of Northland and Waikato.

“We encourage any farmers facing hardship as a result of the lack of rain to contact their bank to discuss options for assistance and how they can work through these challenging conditions,” said New Zealand Bankers’ Association chief executive Kirk Hope. . . .

Fonterra profit down but revenue on track to break $20 billion:

Fonterra Cooperative Group’s half year results means it could be back on track to break the $20 billion revenue barrier; corporate New Zealand’s ‘four minute mile.’

“I think the fall in operating profit will grab attention instead of where it ought to be focussed, on revenue,” says Willy Leferink, Federated Farmers Dairy chairperson.

“This is real money coming into the New Zealand economy.  I mean revenue for the half-year is up 21 percent to $11.3 billion.  While we’ve got close to the $20 billion barrier in the past, this time, we’ve got a real chance of breaking it.

“That said, the declared drought in Northland along with drought-like conditions in the upper North Island could act like a brake.  We’ve also seen GlobalDairyTrade retreat in recent trading events due in part to increased volume. . .

Pengxin picks up former Fonterra executive Romanos for NZ Milk role, report says:

(BusinessDesk) – Shanghai Pengxin has hired Gary Romano, who resigned from Fonterra Cooperative Group last year during the botulism scare, to oversee the Chinese company’s overseas operations including its New Zealand farms, the NZ Herald reports.

Romano’s Linked In profile says he is “currently on the beach before becoming active again in 2014.” He resigned as head of NZ Milk Products at Fonterra last August as the company embarked on a global recall of whey protein concentrate. The bacterium was eventually shown to be harmless.

He will become chief executive of NZ Milk Management and a director of Pengxin’s two farm groups in the North Island and South Island, according to the Herald. Terry Lee, managing director of Pengxin’s Milk New Zealand unit, didn’t immediately return calls. . .

Samoa sheep farming increasing:

Sheep farming in Samoa is growing through a programme funded by the World Bank.

Under the Samoa Agriculture Competitiveness Enhancement Project, the World Bank is helping develop livestock, fruits and vegetable farming.

Sheep were introduced in Samoa in 2004, with the flock now grown to 700. . .

Macca’s hits milestone of three million kilos of Angus

AngusPure recognises programme as instrumental to success of Angus demand

McDonald’s New Zealand today announced it has sold a whopping three million kilograms of New Zealand Angus beef since 2009. With today’s launch of the promotional Angus the Great burger, the company expects to continue its contribution to the success of local Angus beef sales

This milestone is acknowledged by AngusPure’s chairman Tim Brittain, who says the ‘McAngus’ programme has been instrumental in helping grow the demand for Angus cattle, and that Kiwi farmers have been well rewarded since the original launch of the Angus burger range in 2009. . .


Less than 2% of land foreign owned

February 16, 2014

The sale of Synlait farms to a Chinese controlled company brought the usual xenophobic response.

However, OIO approval for the sale of three North Otago farms to Cragimore Investments went unremarked.

That adds credence to the belief that at least some of the opposition is racially motivated.

Whatever, the motivation, a lot of it is based on the erroneous belief that we’re in danger of becoming tenants in our own country when in fact only 2% of land is foreign owned.

The sale of Synlait Farms to a Chinese-controlled buyer is part of a process ensuring New Zealand grows the right products to meet world demand, NZ Institute of Economic Research (NZIER) economist Chris Nixon says.

“That’s the fundamental point – land must reflect world prices because that’s how we decide what to grow on the type of land we’ve got,” Nixon said.

NZIER didn’t comment on the merits of individual deals but the trend was important for NZ to be a successful part of an international world, he said.

Nixon, who has written research papers on foreign direct investment, said the level of overseas ownership of land in this country was low by world standards and wasn’t growing quickly.

 “We’ve missed out really. The land is seen as relatively expensive and we are a long way from world markets.

“The deals we see are high profile but they are small and it tends to be spiky – it happens now and then.”

NZIER studies showed less than 2% of NZ land was owned by foreigners. The exact level of farmland ownership by foreigners wasn’t known but it would be within that range, Nixon said.

Most of the acreage was expected to be in forestry.

Less than 2% is a very small amount and that inwards investment brings benefits.

Waikato University professor of agri-business Jacqueline Rowarth said overseas investment helped maintain farm values and protect the high debt levels held in the dairy sector.

Restricting sales would make many current farmers “green round the gills” because of the impact on their farm values and debt they had taken on.

“Treasury says we haven’t got enough money coming in as a country to make investments and the Reserve Bank says that dairying debt is a major issue if things go wrong.

“Without the interest shown by overseas buyers the value of farms would drop.” . . .

The benefits aren’t just to those who sell the land.

          SFL will invest $20 million to develop the Synlait farms and Pengxin is spending about $18m on development in the North Island.

The multiplier effect of that level of investment in infrastructure and services in a regional economy meant everyone would benefit, Rowarth said.

The proof was in the Southland economy, which was booming because of dairy conversions. Dairy investment involved huge expenditure.

Rowarth also counters the myth that foreign owners compete unfairly with locals.

While overseas investment would maintain farm values, it wasn’t pushing prices out of the reach of New Zealanders as long as milk prices and operating costs were at levels to make the farm business profitable, she said. . . .

While foreign direct investment was important for the economy, it was also important for New Zealanders to capture the foreign trade benefits through ownership of the processing and marketing companies, Rowarth said.

“I’m less worried about the foreign ownership of land than I am about the companies, because that is where the brands and the value is.

“We’ve got companies like (PGG) Wrightson and now Synlait Milk majority overseas owned and the questions are where are the profits going? Are they coming back to NZ?”

It’s not the profits but the loss of  intellectual property a company like PGGW has in seed development which might be of concern. But there’s not the emotional attachment to IP the way there is to land.

Synlait Milk had said it was not paying dividends but would invest in its assets and the risk was  NZ investors would sell out if they weren’t getting an income from it.

Nixon has also noted greater reaction to farm acquisition than to foreigners buying agri-businesses, saying that was surprising when agri-business had more impact on the daily lives of New Zealanders.

Having open markets that encouraged overseas investment was important for credit rating agencies, he said.

Without that NZ would face greater interest costs on overseas borrowing.

Higher interest rates, and the inevitable increase in the value of our dollar that would follow, would be a very high cost for banning sales to overseas interests when such a small amount of land is owned by foreigners.


Rural round-up

February 8, 2014

Waikato fast turning waste into wealth:

The Waikato is fast turning waste into wealth, thanks to New Zealand’s first and only independent product development spray dryer and a collection of the country’s world-class researchers.

Waikato Innovation Park is the first organisation in the region to receive funding from Bio-Resource Processing Alliance (BPA). The $28,000 is helping it develop a way to scale up commercial production of pure avocado powder – a project that was started on a small scale in 2013.

The BPA is a government funded initiative that helps New Zealand’s biological-based manufacturing businesses gain maximum value from waste and by-products, while reducing environmental impacts from primary production and manufacturing activities.

According to BPA general manager Trevor Stuthridge, the initiative has $2.5 million per year on offer to New Zealand companies and their research providers over the next five years. . .

Benefits tipped from Synlait takeover – Alan Williams:

New jobs and $6 million coming from overseas for farm development spending are among the benefits of the latest Shanghai Pengxin investment in New Zealand, Cabinet ministers say.

Chinese company Shanghai Pengxin’s majority shareholding in the company that is taking over Synlait Farms in Canterbury was approved by State Services Minister Jonathon Coleman and Land Information Minister Maurice Williamson.

In their decision released by the Overseas Investment Office (OIO), they also referred to the benefits to NZ of the Shanghai Pengxin investment in 16 former Crafar farms in the North Island and the advancement of New Zealand’s “China strategy”. . .

Controls on fruit and vegetable movement lifted:

The Ministry for Primary Industries (MPI) confirms that all restrictions on the movement of fruit and vegetables in Whangarei have been lifted as of yesterday evening, Friday 7 February.

MPI Deputy Director General, Compliance and Response, Andrew Coleman, says this marks the milestone where two weeks of trapping, fruit sampling and testing is completed.

“We have received our final results from trapping and fruit examination and I am delighted to say that our rigorous checks found no further sign of the Queensland fruit fly in the Whangarei area. New Zealand’s fruit fly-free status remains intact, as it has throughout this response. There is no longer any need for residents in the area to be restricted in their movements of produce.” . . .

Whangarei fruit fly operation comes to an end:

Primary Industries Minister Nathan Guy has thanked the people of Whangarei for their cooperation over the last two weeks in responding to the find of a single male Queensland fruit fly.



“It’s very pleasing that no other fruit fly has been found and that this appears to be a solitary insect.



“This detection is a very rare event and shows we have a high performing biosecurity system.



“I want to thank the people of Whangarei for their support and patience over the last two weeks.



“Locals have been very supportive of this operation. They realise how important it is to treat this response seriously, and their cooperation has been great,” says Mr Guy. . . .

Good news in seed export growth:

Federated Farmers is pleased to see exports of vegetable and herbage seeds still rising.

“To see total seed exports rise by 14 percent from 2012 levels shows arable farmers in New Zealand are doing their fair share for the economy,” says Ian Mackenzie, the Grain & Seed Chairman of Federated Farmers.

“What makes the $192 million contribution to the economy so good is that this contribution is heavily concentrated in mid and North Canterbury region, with almost all the production done between the Rakaia and Waimakariri Rivers.

“Dairy is not the only land use that is driving economic activity in Canterbury, and that deserves to be celebrated” . .

Rabobank Wine Quarterly Q4: Challenges remain for global industry:

• New Zealand harvest yet to commence, but favourable growing conditions indicate positive signs for the coming vintage.

• New Zealand wine exports are firmly back in growth given the higher supply available from the record 2013 vintage, and the share of bulk wine in the ‘product mix’ is rising.

• Australian harvest underway, expectations of a slightly smaller crop, with the recent severe heatwave potentially impacting yields. . . .

The full report is here.


Foreign investment isn’t easy here

November 9, 2013

The New Zealand Initiative is researching foreign direct investment and is seeking information:

The $200 million sale of the Crafar farms to Shanghai Pengxin generated a storm of controversy last year, as well as massive legal fees as teams of lawyers waded through rivers of red tape to get the deal across the line.

Yet if the same deal were proposed in Australia, it would apparently have passed with barely a squeak of protest under their Foreign Direct Investment rules, while in Canada it is a more complicated “maybe”.

It seems not all FDI regimes are created equal, particularly as inbound investment is often subject to grey-area factors that are not captured in the black ink of the rules.

We would like to tap into the knowledge of our international friends and followers, so perhaps you can help us:

In what international jurisdictions would the purchase of $200 million (US$165 million) of productive farmland by a Chinese conglomerate have gone through smoothly, and in what countries would it have been red-flagged, as it was in New Zealand?

Your input will be included in our second FDI report, which compares New Zealand’s inbound investment policy framework to other international jurisdictions. All submissions will be published anonymously.

If you would like to help us, please do so in email form to khyaati.acharya@nzinitiative.org.nz by 18 November 2013.

The NZI has comparisons with other countries:

Australia: A $200 million investment would appear to be able to sail through because it is below the investment threshold of A$244 million that triggers Australia’s FDI rules.

Canada: A $200 million investment would appear to sail through at the Federal level because it would be under the threshold level of C$344 million that applies to Chinese investor as China is a WTO-member. However, perhaps it would trigger FDI scrutiny at the provisional level, perhaps most particularly in Alberta, Quebec, Saskatchewan and Manitoba, all of which restrict significant investments by overseas persons in productive farmland.

Hong Kong: Presumably, no FDI restrictions would apply to a $200 million purchase in Hong Kong.  But does Hong Kong have $200 million of dairy farmland to purchase?

Korea: We understand that South Korea does limit investment in arable farmland given its limited availability and national significance, but we don’t have any details.

Singapore: We understand that Taiwan does not consider productive land to be a sensitive national asset and applies no monetary threshold to inwards FDI. If so the investment should sail through.

UK: We understand that the United Kingdom would impose no screening requirement on such a transaction and has no monetary threshold for triggering scrutiny, nor is farmland regarded as a ‘sensitive area’.  Presumptively, the purchase would sail through.

USA: At the Federal level the purchase would sail through since all a foreign purchaser of US farmland is required to do is to disclose the purchase to the Secretary for Agriculture.

Foreign investment in farms isn’t easy here.

A New Zealander who manages a farming business for an international company tells me that going through the Overseas Investment Office was a long and difficult process.

It took ages, and was expensive, even when the company was selling a farm it already owned here to buy another and had a good record of employment, development, and responsible stewardship of and best environmental practice on its properties.


Rural round-up

November 4, 2013

Few farms in foreign hands says English – Alan Wood:

Foreign investment in New Zealand farmland, including dairy farms, remains relatively low and has significant safeguards, Finance Minister Bill English says.

Some investment, including that in the Crafar farms in the North Island by the Chinese, has raised the hackles of some Kiwis.

For example, Campaign Against Foreign Control of Aotearoa spokesman Murray Horton says he is firmly against ownership of New Zealand land by foreigners, whether they be Chinese, American, Australian or British.

Last month the China-based Shanghai Pengxin Group announced a takeover bid for Synlait Farms, in association with two of Synlait’s founders, John Penno and Juliet Maclean. . .

The Industrialisation of American Dairying and the Implications for New Zealand: Keith Woodford:

The ‘handout notes’ that follow were written  for a Lincoln University Dairy Farm Focus Day on 10 October 2013. These focus days are held every two months. This one was attended by about 200 farmers and rural professionals. I gave the presentation as Lincoln’s Professor of Farm Management and Agribusiness, standing on a trailer out in the paddock – so basically it was all ad libbed without visual aids. Actually,  sometimes it is fun to talk without the distraction of powerpoints!

Background

  • The American dairy industry is rapidly transforming to an industrial model based on large scale (>2000 cow) mega farms.
  • As of 2013, approximately 40% of American production comes from 800 mega farms.
  • Another 30% comes from a further 2500 farms, each with between 500 and 2,000 cows.
  • The final 30% comes from more than 50,000 farms with less than 500 cows
  • The mega farms have costs of production that are much lower than the smaller farms. . .

 

Farming robot could bring the cows in – Jill Galloway:

“Like a four-wheel-drive wheelchair on steroids” is how Andrew Manderson describes his Agri-Rover.

He designed the prototype farm robot which was built by a team from AgResearch and Lincoln University, using industrial parts and costing $4000.

It was a robust machine and had a powerful engine, said Dr Manderson.

It would comfortably trundle around a paddock, so long as it didn’t encounter a gradient of more than 20 degrees.

He said it had a top speed of 5kmh, but with a few adjustments it could really motor.

(Click on the link above to see a video of the robot in action)

Winning the battle against boxthorn pest – Ruth Grundy:

Graeme Loh is the first to admit he is more ”exterminator” than ”nurturer”.

He is the Department of Conservation (Doc) ranger who oversees one of the country’s newest reserves, a prominent and ancient limestone outcrop at Gards Rd, between Duntroon and Kurow.

He said his main focus was to eradicate an aggressive exotic invader – boxthorn – which threatened to appropriate this national treasure.

”People don’t realise how bad a weed it is and how difficult it is to remove.” . . .

Farmsafe says quad bike research backs roll bars – Anna Vidot:

Farm safety advocates say the science is in, and now is the time to start encouraging people to use quad bikes with roll bars.

Manufacturers of the vehicles have long argued that crush protection bars cause more injuries than they prevent, and take the focus away from other safety measures like helmets and proper training.

But Farmsafe Australia says there’s mounting evidence that crush protection bars are more likely to save a life than not, if a quad bike rolls. . . .

Dogs queue up for aversion training

Kiwi advocate Lesley Baigent  was  gratified by the response  to Saturday’s kiwi aversion  training session for dogs at the
Raetea reserve, at the northern foot of the Mangamuka  Gorge.

Dogs were literally queuing  up to undergo the training,  which involves a special collar  delivering an electric shock at  the appropriate moment to  persuade the dogs that kiwi  are best left alone. Success rates varied, Lesley said, and there were certainly  no expectations of 100 per  cent. . . .


Rural round-up

October 28, 2013

Industry award like winning ‘ham Lotto’ – Sally Rae:

Sue Morton describes winning gold in the 100% New Zealand Bacon and Ham Competition as like winning ”ham Lotto”.

Mrs Morton and her husband Gus, from Waitaki Bacon and Ham, won the gold award for their Hampshire Champagne sliced ham in the recent competition.

Retail meat industry specialist Matt Grimes, who has been a judge since the competition’s inception in 2008, described the entry as a ”standout”. . . .

Otago couple among six in award finals – Sally Rae:

Otago farmers Trevor and Karen Peters are among the six finalists in the Lincoln University Foundation South Island Farmer of the Year competition.

The Peters family operates a sheep and beef hill country farming enterprise across six properties. Nominees noted their commitment to the farming industry and their focus on succession planning.

Farming was a very high-cost business to get into but one with a low cash return, Mr Peters said.

”We have focused on a process for succession planning to ensure that business decisions on the property can focus on the long term, knowing that there will be a continuity of investment,” he said. . . .

Synlait Farms had five offers – Alan Williams:

Synlait Farms chief executive Juliet Maclean will increase her investment in the company as part of the planned takeover joint venture with Shanghai Pengxin.

If the takeover proceeds Maclean will receive just over $15 million for her 17.55% stake in the corporate dairy farmer but is required to invest $17m directly into her new 16.1% shareholding in the takeover vehicle SFL Holdings (SFLH). She will remain as chief executive and director of Synlait Farms. . . .

Taking Jersey butter to the top – Richard Rennie:

A small dairy company has tipped the usual processing model on its head, aiming to produce crafted, niche butter from one breed of cow, for the top-end food and restaurant trade. Richard Rennie investigates.

A couple of years ago Lewis Road Creamery founder Peter Cullinane had an epiphany in the most ordinary of places.

While trawling the dairy aisle of his Auckland supermarket for Danish Lurpak butter he wondered why he had to buy butter that had travelled 20,000km to get a brand that tasted good? . . .

Fury over eartag ‘spying’:

FARMERS are outraged at proposals by Meat and Livestock Australia to covertly sell to banks and rural lending institutions private information.

The farmer’s private information has been about the income they derive from the sale of their cattle and sheep.

A consultant’s report commissioned by the MLA – and leaked to the Australian Beef Association – says 10 financial institutions are keen to pay to automatically receive emails informing them every time a farmer who has a mortgage or debt sells his stock through the saleyards or to an abattoir.

The scheme, which the ABA likens to “spying for profit”, is made possible by the tracking of electronic eartags, which are now mandatory from birth for all cattle in all states, from farm to meatworks, under a scheme administered by the MLA. . .  Hat tip: Interest.co.nz

Focus on heat on livestock  – Nicloa Bell:

HOW livestock will react to warming global temperatures is the focus of a new study.

While it is commonly known that livestock production can be affected by exposure to heat, researchers from the University of Western Australia’s Institute of Agriculture and India’s Kerala Veterinary and Animal Sciences University are working to determine the physiological and genetic basis for adaptation in animals as a response to increasing global temperatures.

Physiology professor Shane Maloney from UWA’s School of Anatomy, Physiology and Human Biology is leading the project and said they hoped the research might help in the selection of livestock to improve production. . .


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