Farmers Weekly NZ September 18 2017

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56 Meat sector underperforms Vol 16 No 37, September 18, 2017

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Sell-off surprise Alan Williams alan.williams@nzx.com

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PROCESS for the surprise sale of most Landcorp farms to young people will start very quickly if National is re-elected, Primary Industries Minister Nathan Guy says. Landcorp was unaware of the plan till told just before it was announced. He hoped to have several farms leased to young farmers during the next term. That would be the first step towards them buying the farms over the next five to 10 years. He hoped the scheme will get about 100 farmers on to the ownership ladder for the first time, taking up about two-thirds of the Landcorp portfolio. “If we get back in, we’ll start the process very quickly, get a panel of experts in place to work through the issues involved and the applications for farms.” The panel would select candidates for a farm ballot. Farmers would have to work the property throughout the lease period and both the leases and eventual sale agreements would be at market rates. A spokesman for the Stateowned farmer said Landcorp had not been given prior warning on the election policy but would not be commenting further. Guy said there were issues to work through, including iwi having first-right-of-refusal on

farms being sold by the Crown and Treaty of Waitangi claims on other farms. The protocols would all be observed. Landcorp had some very large farm stations and some of them could be subdivided into affordable blocks for young farmers. The panel would work with the Landcorp board on the most suitable boundary adjustments to provide adequate farming scale and work would also be required on how to allocate infrastructure such as woolsheds, stockyards, and housing. It was possible some facilities could be jointly owned. Large dairy farms would also be subdivided. Campaigning in Gisborne late last week, Guy said he was getting widespread farmer support for the policy. Federated Farmers welcomed the new pathway to farm ownership though president Katie Milne cautioned that Landcorp had “become a complex business in recent years and unpicking it will not happen quickly”. Young Farmers chief executive Terry Copeland said he was getting an excited reaction to the news from his membership round the country. “There’s been a barrier in recent years to getting young people on to farms and this idea of being able to lease a farm, prove yourself over those years, then buy it is a winwin for everyone.” The five to 10-year lease period would give ballot winners time to build up a successful business to the point of getting bank financing.

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There’s been a barrier in recent years to getting young people on to farms and this idea of being able to lease a farm, prove yourself over those years, then buy it is a win-win for everyone. Terry Copeland Young Farmers

POSITIVE: Young Farmers chief executive Terry Copeland says his membership is excited by the policy.

He was sure the programme would be over-subscribed, with applicants from a wide variety of backgrounds. “I hope the process is fair and equitable and ideally the initiative would be for young farming families that would not ordinarily have an opportunity to buy a farm.” Guy said the process would be focused towards young farmers with experience running a farming operation and have not already had sole ownership of a property. Environmental sustainability

would be a key measure for applicants to get on to the ballot. Landcorp farmed about 140 properties. It managed several on behalf of owners and Guy’s estimate that it owned 135 farms might be on the high side. Iwi rights of refusal and treaty claims might also take a considerable time to resolve. Under its Treaty of Waitangi settlement in the 1990s, Ngai Tahu had first right of refusal over sales of Crown-owned land in the South Island and it was understood most

of the North Island farms were affected by the treaty process. The Landcorp board might also be expected to want to protect its position in its research work, notably the commercial-scale livestock genetics work as well as its role in the FarmIQ programme. There was understood to be a roughly an equal mix of farms between the North Island and the South Island and though Landcorp had diversified strongly into dairying in recent years, the owned farms had a bias to sheep and beef. There would be properties on which Landcorp had commercial deals that would not be involved in the sale process, Guy said. Money from the farm sales would be used for public services. There had been no clear public good coming from Crown ownership and little financial return to taxpayers, he said. Landcorp had not paid a dividend in the past two years with its focus on reducing debt.

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