Friday, January 27, 2012

Key under fire for Crafar farm sales to Chinese

English: John Key, leader of the New Zealand N...
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Maurice Williamson at the New Zealand Open Sou...
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NZ Newswire

Heated row over Crafar farm sale to China

Prime minister John Key is under fire following the announcement 16 Crafar dairy farms will soon be Chinese-owned.
Milk New Zealand Holdings, a subsidiary of Shanghai Pengxin Group, has been granted approval to buy the land in a deal worth $210 million.
Land Information Minister Maurice Williamson and Associate Finance Minister Jonathan Coleman announced their decision to grant consent for the purchase on Friday morning, following a recommendation from the Overseas Investment Office (OIO).
Mr Key says the Chinese offer "well and truly exceeded" the strict conditions set for overseas purchases of New Zealand farmland.
But other party leaders say they strongly disagree with the decision.
Among these, Maori Party co-leader Pita Sharples says the farms should be sold to New Zealanders.
"Our land should stay in our hands."
New Zealand First leader, Winston Peters, called the decision "economic treason".
He accused Mr Key of delaying the announcement of the OIOs decision until after the election because he did not "have the guts" to tell New Zealanders.
During a press conference on Friday Mr Key said the sale could not be stopped simply because the buyers were Chinese.
"While ministers were in a position to review the decision from the OIO, if they were to turn that decision down, they would have had to have reasons to do so."
"In our view there were no reasons to do so."
Meanwhile, a rival consortium, Crafar Farms Purchase Group, led by businessman Sir Michael Fay has promised to challenge the sale via a judicial review.
The group launched a rival $171.5 million offer in September but had its bid declined by KordaMentha - the farms' receivers - who called the offer "unacceptable".
The consortium and Crown will hold a phone conference on Monday.
Milk New Zealand's purchase includes nearly 8000 hectares of land, along with livestock, chattels, machinery and Fonterra shares.
It's proposed state-owned farming company Landcorp will operate the farms, and a joint venture company to be owned by Milk New Zealand and Landcorp will develop and manage the farm portfolio.
Milk New Zealand will face strict conditions, enforced by the OIO, including investing more than $14 million into the farms to make them more economically and environmentally sustainable.
Before going into receivership in 2009, Crafar Farms was New Zealand's largest family-owned dairy business, running 20,000 cows in various regions of the North Island.
The family had a history of prosecutions for resource consent infringements over a number of years, mostly for breaching effluent discharge rules.
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