National will look to sell Landcorp farms if re-elected

Primary industries spokesman Nathan Guy said "National will direct Landcorp to lease these farms to young farms"

A National government will look to sell state-owned Landcorp Farming farms if it is re-elected on Sept. 23, says primary industries spokesman Nathan Guy.

"The government owns a large number of commercial farms through Landcorp, but there is no clear public good coming from Crown ownership and little financial return to taxpayers," Guy said in a statement. The move is a more aggressive stance as the government has previously said it was committed to keeping Landcorp, which does buy and sell farms.

Landcorp, the nation's largest corporate farmer, was not immediately available for comment.

Guy said they will target young farming families and that farms will be awarded on a lease-to-buy arrangement, with leases awarded by a panel and ballot and prioritised towards young farmers who have experience at running a farming operation, and have not already had sole ownership of one before. The lessee will be required to work the farm continuously themselves for at least five years before being able to purchase it, or longer if they need more time to build up capital.

The sale and settlement process is expected to take more than a decade to complete and any revenue generated by the sales will be reinvested in public services, he said.

"National will direct Landcorp to lease these farms to young farmers, and give them the opportunity to buy them at market rates when they have built up enough capital," Guy said.

He did not specify how many farms would be affected but said that not all of the 140 farms will be sold as many are subject to Treaty of Waitangi claims and others have a right-of-first-refusal for iwi. Also, some of Landcorp's larger farms will be divided into smaller units more appropriate for first-time owners.

Guy said he expects around 100 young farming families to benefit from the programme.

A strategic review by independent financial consulting firm Deloitte previously determined there is no reason that state-owned enterprise Landcorp needs to be in government ownership. Deloitte undertook the review in 2014 at the behest of Treasury and Landcorp, as part of Treasury's programme of independent reviews across all SOEs, and the 100-page report was released under the Official Information Act.

According to Deloitte, in its earlier years, from 1987 to 2001, Landcorp produced total operating profits of $144 million and paid $314 million of dividends to the Crown, which was significantly funded by asset sales.

It then diversified its operations from predominantly sheep and beef to include dairying and deer farming. During this period up until 2013 ahead of the report's publication, Landcorp spent about $180 million on capital investment and moved to align dividends with operating profits, with capital from land sales reinvested principally into the development of dairy farms.

In its more recent history over the past two years, Landcorp hasn't paid a dividend to the Crown, creating tensions with its government owner which prefers dividends to be paid ahead of reinvestment and growth in the business.

In late August Landcorp reported a full-year profit as the state-owned farmer recognised 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. It did not pay a dividend in line with its policy of repaying debt.

(BusinessDesk)


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Gun....bang....foot...ouch.

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What the hell?!? Why should you farmers get a sweetheart deal to buy significant fixed assets while the rest of NZ's youth aren't being assisted to buy non-farming businesses?

What are the chances those young farmers (not driven by the same aspirations as their parents) just farm until they get freehold title then sell the land to foreigners?

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If it is such a great deal Ben , then perhaps you should take the opportunity.
Become a farmer.

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I don't want to be a farmer. Equally I don't want an unfair distribution of government assets to a sector of our economy which benefits from enough government pandering as it is

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Ben could you elaborate on the government pandering? Examples etc

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The main thrust is to get it out of the government hands and away from taxpayer risk.
There is also the fact of having a massive increase in production and taxation paid because of the energy released from private enterprise verses the dead duck government approach.

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There s lots of really good young farm manages out there that will never get into farm ownership unless helped . Once on the land these guy s start to make export dollars unlike u Ben.

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That's because we are allowing a massive sell-off of our land to foreign buyers with whom these young farmers simply cannot compete on price. Just like home buyers.

National should admit and start fixing fundamentals rather than taking from taxpayers pockets to subsidise purchases for their core voter bloc.

This is yet more irresponsible carry-on from National rather than fixing the basics.

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Fine then lease it to them, so that it can continue to be available for more future young farmers to make export dollars from.
"Little financial return to taxpayers." Some pretty damned good capital gains have been made surely?

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At long last at least a move in the right direction but needs a much more vigorous approach.
We must ignore Chinese ownership, overseas interest or any sale to Maori tribes. NZ farming families or syndicates first.

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A BIG NO to Chinese buyers,I see the Chinese government are going to relax the rules re getting money out of China, just great (not)more property sold down the road.

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Eric Roy, Landcorp director, admitted that he was virtually run out of the Te Anau basin by the locals, because of Landcorp Jericho sale to the Chinese such was the resentment,
Amazing what elections bring about?

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Excellent. The land was bought by the taxpayer for settling returned servicemen and landless NZ farmers.
It was not bought for the creation of another trough for shiney-arses, we have plenty of those thank you very much.

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Typical Nats lining their mates kids pockets,

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ACT has a long standing policy for the government to get out of corporate farming.

So another example of the icebreaker policy leadership ACT provides - opening up pathways for change the big players struggle to face up to

It should be noted ACT's programme is for the proceeds of Landcorp sales to go into investing in a nationwide network of birdsong sanctuaries

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So another broken promise by National as they run sacred and offer election scramble lollies.

And even then a lot of PR fluff. What's the bet that the farms end up in Chinese hands with the young farmers as employees of Chinese corporations?

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Not to forget, they'll likely be state-private (mixed ownership) Chinese corporations. Naive is the only word to describe our current lot of politicians approach to sovereignty.

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What great news. Maybe they read the NBR commentary suggesting this about 1000 times!

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Trouble is Mr Stirling, I doubt there will be an orderly exit from farming for the long-suffering tax payer.
Two reasons,
1. claims by Maori and environmentalists. and 2, It is a nice handy "happy home" for non-performing mp's to be sent to from parliament without embarrassing tantrums. Like the "Producer Boards"

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. A real job for the boys.Eric Roy as one of the directors should be very red faced regarding his position as it is everything he is not meant to represent.
Once again the wisdom of John Morrison has hit the nail on the head.

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