20 Nov 2014

Challenge to bridge rural-urban divide

5:16 pm on 20 November 2014

Lincoln University's Vice-Chancellor Andrew West has challenged farmers to help break down the urban-rural divide.

Responding to a question at yesterday's Federated Farmers National council meeting, Dr West said one of the biggest contributors is that the rural sector is denying the urban sector the opportunity to participate in wealth it is creating.

"They don't invest in Fonterra. They can't. They don't invest in Ravensdown, Ballance or Silver Fern Farms or Alliance. Yes, there are private companiesl, but they're privately held like ANZCO, AFFCO - you can't get near them. So, when are you going to allow B-class non-voting shares from superannuation funds, mum and dad investors in Auckland, into Fonterra and some of these other great companies?

"They desperately need the capital, because they don't have enough for intangibles, like brands and R and D, new product development.They desperately need the capital to take over other companies in the world, he said.

"Farmers are paying $75,000 to $90,000 a hectare on average in Waikato right now for dairy farms, they aren't going to provide the money, so, where's it coming from? And if it's not going to be FDI (foreign direct investment) 'cos that's where it's coming from right now, then you've got to allow superannuation funds to get in there.

"That's one of the reasons I really loved that package of polices from Labour and the Greens - the capital gains tax, compulsory superannuation and review monetary policy - and get away from this nutty policy we've got right now - using the price of money to regulate the economy."

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