4 Aug 2014

Farmers worry about offshore sale of station

3:21 pm on 4 August 2014

Federated Farmers has raised some concerns over the proposed sale of Lochinver Station in the central North Island to the Chinese Shanghai Pengxin Group.

Shanghai Pengxin has signed a sale and purchase agreement for the near 14,000 hectare sheep and cattle farm, near Taupo.

The sale is still subject to New Zealand and Chinese regulatory approval.

The Chinese company already owns 29 New Zealand farms, mostly dairy, including 16 farms formerly owned by the Crafar family.

Pengxin International's chief executive, Gary Romano, said it planned to convert parts of the Lochinver station into a dairy farm.

"It's a unique property,'' he said.

"It's got quite a varied terrain, so currently there is a significant sheep business, I think 30,000 sheep on the property, there is beef, there's also raising of heifers and it also does some dairy grazing. There's a dairy support block for a neighbouring dairy farm.

"Now the nature of the block is such that we will be maintaining the sheep and the beef, but we have made application to have a portion of that farm converted to a dairy farm.

"The reason for that is one of our existing farms actually backs on to the Lochinvar property and there's just an opportunity for some synergies between the two, in the way we construct a dairy shed and the movement of cows.

"As time progresses we might look to acquire consents to do more dairying".

Shanghai Pengxin says it will invest in boosting productivity and environmental compliance on Lochinver Station.

Shanghai Pengxin says it will invest in boosting productivity and environmental compliance on Lochinver Station. Photo: PHOTO NZ

Federated Farmers said it supported positive overseas investment in New Zealand farming.

But the federation president, Dr William Rolleston, says it wanted to know whether the Lochinver sale would provide the level of benefit to the country required under overseas investment laws.

Dr Rolleston said the proposed Lochinver sale highlighted the need for research into the extent of overseas investment in farmland and Federated Farmers was repeating it's call for a register of foreign-owned farmland.

"Back in 2010, the Government did tighten the rules aound foreign ownership and said where there was land integration or vertical integration there had to be a substantial and visible benefit in that land purchase and we've yet to see what that is around this particular purchase.

"We're aware that Shanghai Pengxin has bought the Crafar farms, they've invested in Synlait farms and this is another 14,000 hectares.

"That's three times the trigger level for extra tests that the Government's put on.

"The requirement is really to show that there is going to be improvement above what the New Zealand investor would do.

"So, if they were planning to put in facilities that produce products that are not being produced in New Zealand, add some technology that we don't have, so adding value from that point of view, then that would help satisfy that sort of test of national benefit that we'd like to see."