2 Jul 2015

Farmers making huge profits from tenure reviews

5:47 am on 2 July 2015

New research shows farmers are making huge profits from on-selling land purchased through the tenure review process.

Classic Mackenzie vista.

Classic Mackenzie vista. Photo: RNZ / Graeme Acton

Tenure review was introduced 23 years ago to allow farmers to buy high country land they had previously leased from the crown and to allow some of the land to pass into the hands of the Department of Conservation.

The research released to Radio New Zealand showed that over the past 20 years, land sold to farmers by the crown for $11 million has been on-sold for $300 million.

The figures were compiled by Lincoln University's Ann Brower, who said the land involved stretches the entire length of the South Island and included some of the country's most iconic pieces of landscape.

"A lot of it is near some of those southern lakes and not surprisingly, land near southern lakes sold for a whole lot more. And land that was close to tramping tracks and things like that, that sold for more."

Green Party MP Eugenie Sage said taxpayers were not getting good value for money out of the process because Land Information New Zealand or Linz, was only selling the land based on its value as pasture.

"The potential for subdivision isn't included in the valuation and nor does the crown consider that the landscape and amenity values which enable these lands to be on-sold for very high prices because they're often quite desirable with outlooks over lakes and to the mountains, that's not taken into account."

Eugenie Sage is one of six new Green MPs.

Green Party MP Eugenie Sage. Photo: GREEN PARTY

Changing the natural landscape

As well as selling off the land too cheaply she said the government was also squandering the huge tourism opportunities that some of the land presented.

"These high country landscapes have enormous economic value. They're the basis of the tourism industry. If they're cluttered with subdivisions and converted to dairy pasture, they no longer have that scenic and amenity value that attracts visitors."

Forest and Bird's Jen Miller said once land passed from being a pastoral lease to freehold, farmers were able to do whatever their district plan allowed.

She said in the MacKenzie Basin that had resulted in the large scale conversion of land to dairy farming - making the land more valuable but also transforming it into something quite different.

"If you drive south of Twizel, what once was this sort of brown dry landscape that we're used to is now green with huge pivot irrigators and cattle. It's converted from a highly natural landscape into a Canterbury Plains landscape."

Some alpine tussock land in the Mackenzie Country is being irrigated for intensive farming.

Some alpine tussock land in the Mackenzie Country is being irrigated for intensive farming. Photo: RNZ / Graeme Acton

Federated Farmers High Country spokesperson for South Canterbury Andrew Simpson said while there had been some on-selling of land, it had not been on a large scale.

He said a farmer's ability to subdivide and build houses was limited by the district plan.

"Where you've seen some subdivisions, they're very well done and are adding a huge value to the district through different land uses and new businesses."

Mr Simpson said the huge sums of money farmers had been getting for formerly leasehold land was simply a reflection of the property market.

"You look at the house prices in Auckland, you'll see those values have sky rocketed as well. It's the same with lakefront farming properties."

Minister for Land Information Louise Upston declined a request to be interviewed and directed Radio New Zealand to Linz for comment.

Nobody at Linz was willing to be interviewed but a spokesperson said the price land sold for was based on market valuations.