How to lose $5.3 billion dollars without any effort at all.
The latest in the on-going saga of our land alienation to overseas interests…
The eight farms mentioned in the above story are located here,
Meanwhile, Monaco and Israeli investors have increased their shareholding in the Walter Peak Station Trust,
By September of this year, the Aquila Group had increassed their holdings from eight to eleven South Island farms, with stated intentions to buy more,
Since the start of 2006, the Overseas Investment Office (OIO) has approved the sale to foreign buyers of 300,400ha of freehold land and 239,600ha of other interests in land, such as leases.
Those figures are for land passing from New Zealand to overseas ownership, and does not include the sale of land already in foreign hands.
Which brings us to this latest news,
A record payout – $10.6 billion – going to New Zealand farmers.
Or… will it?
As more and more dairy farms are sold into foreign ownership, more and more of Fonterra payouts will also end up in the bank accounts of offshore investors. Not only will we be faced with higher prices for milk, cheese and other items containing dairy products – but the profits from the sale of those products will not come to New Zealand.
We will have lost income as well as dairy products.
Imagine if, eventually, half our dairy farms end up in foreign ownership; German, Chinese, American, etc. Then imagine half of Fonterra’s payouts ending up in offshore bank accounts.
Imagine – losing $5.6 billion.
We have already solds many former State assets to overseas investors. The profits from those assets now flow overseas, which will continue to impact negatively on our Balance of Payments account – pushing us further into deficit.
Quite simply put; we are importing more than we are exporting. That makes it more expensive to borrow capital from overseas markets (eg; for our home mortgages), and will eventually affects the interest we pay on those borrowings.
End result; triple whammy;
1. Higher dairy prices
2. Lost earnings
3. Higher interest rates
Now can anyone remind me – what, precisely, is the long-term benefit to New Zealanders to sell our productive land to overseas interests?
Something else to bear in mind when voting this year. The only ones who can stop the further alienation of our own land is us – the citizens of New Zealand. Because, my fellow Kiwis, no one else will do it for us.
Email sent to the Prime Minister of New Zealand, John Key,
date: Sun, Sep 11, 2011 at 12:32 AM
subject:Purchase of farmland
At a recent public meeting in the Hutt Valley, in answer to a question from
the audience, you responded that purchases of farmland, by overseas buyers,
would be restricted to ten farms per purchaser.
Can you confirm that this restriction is in place, and when the regulation was
- Frank Macskasy
As of the publication of this piece, no response has been received from the Prime Ministers office.
+++ Updates +++
The Fay-led bid for the Crafar farms has failed because it is lower than the Chinese bid. This raises two issues,
- If a multi-millionaire such as Sir Michael cannot outbid overseas investors who are hell-bent on buying our farms – then what hope is there for ordinary kiwis, who do not have Sir Michael’s deep pockets, on competing against foreign investors? The answer is obvious; we cannot compdete. We would be outbid every time.
- If, as Sir Michael suggests, that over a certain price these farms are not economical, then why are the Chinese willing to pay more ($40 million?) than the farms are worth, from a viability-prospect? Could it be that the Chinese are not interested in profitability as much as securing food-production sources over the next few decades?
This is the clearest example yet as to why only New Zealanders should be permitted to own New Zealand farmland. As the world’s population passes the $7 billion mark, and is heading toward 9 billion by 2050, farmland will be the most important, strategic asset on this planet. Perhaps that is why the Chinese are willing to pay over-and-above what the Crafar farms are worth: they are buying into the future.
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