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Donald Aubrey’s address - High Country Conference

SPEECH - High Country Conference
Federated Farmers High Country chairman, Donald Aubrey’s address
11.15am Friday 6 June, 2008, Edgewater Resort, Wanaka

Ladies and Gentlemen,

This conference of Federated Farmers High Country here in Wanaka today is very important for those of us who rely on the high country for our livelihood. It’s time to reflect and look at the future opportunities for high country landholders; to see what options there are and how these might be realised and what investment is required to achieve these goals.

Certainty is one of the keys to making good quality investment decisions. In my opinion, secure land tenure is most important in providing certainty to pastoral leaseholders. Government has a duty to assist in this. Pastoral leaseholders require a rental that recognises all the constraints economically, which reflects the market and is therefore affordable and practical.

It’s all very well for cabinet to decide on objectives for the South Island high country but what about the implementations? Recent Land Information New Zealand decisions have caused uncertainty amongst pastoral leaseholds, and I believe there needs to be a review of the way in which LINZ is managing the situation.

For example, within LINZ sits the office of the Commissioner of Crown Lands. Section 18 (2) of the Crown Pastoral Lands Act requires the Commissioner, when considering discretionary actions, to strike a balance between the “desirability of protecting inherent values”and the “desirability of making it easier to use the land for farming purposes”. This decision is preceded by a requirement to consult the Director General of Conservation.

The Commissioner can consult others to ensure a balance is struck on this matter, it’s not uncommon to be told when questioning such decisions that the level of information received in support of ‘ease of farming’ is far less comprehensive. Although the Commissioner is ‘satisfied’, the reality of some decisions suggests there is no balance and LINZ decision-making is biased against lessees.

In 2006-07, 75 percent of DOC’s recommendations on 103 applications were fully implemented and a further 20 percent partly implemented. Most decisions lack explanation and impact negatively upon the ‘ease to farm’. DOC provides expert advice on protection issues but the Commissioner appears not to listen to high country farmers when they say this doesn’t balance with production.

The ramifications of not properly adhering to the act are significant. It has become more difficult to maintain a viable merino flock as a result of these constraints. Furthermore a large quantity of land is being removed from production due to loss through tenure review.

Under pressure to return more than half the South Island’s land area to the control of DOC, the consequences for companies such as the widely acclaimed “New Zealand Merino” are serious. I am sad to advise, this company is now sourcing fine merino wool from overseas in order to fill contracts supplying such companies as Smartwool and Icebreaker. Hardly New Zealand merino then is it?

We all know how much Prime Minister enjoys her mountaineering but perhaps the next time she is in the South Island high country she might like to reflect on the fact that the world leading New Zealand merino garments she is wearing are no longer made of wool grown in New Zealand because of a quirk of government policy.

We have said for a long time that there needs to be a better balance on the decisions made in respect to farming the South Island high country DOC seems to sponsor the mantra that ‘two legs good – four legs bad’. We all know that there is a place for the judicious summer grazing of the high country.

If allowing merino sheep to graze this land was not sustainable under our stewardship, then ruining our merino industry could be justified. But that is definitely not the case. The cost of exclusively using high country parks for recreation without grazing may be too high.

It’s ironic that those that do recreate in the high country can enjoy such amenities as the view without charge. Meanwhile those of us that have paid to acquire perpetually renewable Pastoral Leases are to be charged a rent that incorporates a huge amount for the amenity values, that includes ‘big ticket’ items such as costs for weed and pest control. These items may add a four or five times fold cost increase over the land price, and is not recognised in the rent reviews.

If ever there was a policy developed that was designed to force high country families out, then this is it. A situation made even more remarkable when one considers the legal opinion provided by Crown law to LINZ.

This opinion reaffirms that Pastoral Lessees, despite Brower and others saying otherwise, hold exclusive possession by way of their title. So in order to see a view you need access to the land. As it is held exclusively then it becomes a precondition to that activity. On that basis I would question the right to any such fee.

In any case the government’s call for a fair market return has to be considered fairly. Charging landholders a fee that no others pay is illogical. The Armstrong Report concluded in the context of their findings that existing Pastoral Lease rents are at or above present market levels.

Molesworth Station covers 180,000 hectares and has been leased to Landcorp for a period of fifteen years. The annual rent payable is $105,000, which allows the holder to graze in excess of 45,000 stock units The rental therefore is $2.33 per head or 58c per hectare.

Although Landcorp own all the improvements including buildings, pastoral lessees have a perpetually renewable right to the leased land This means that a Pastoral Lease is a considerably more secure title and therefore would be expected to pay a lower market rent.

Given strong assurances from Landcorp that the Molesworth agreement reflects fair market value, one is puzzled as to why government then expects rents that are five times or even more higher from holders of pastoral leases.

Sadly, in order to resolve such matters pastoral lessees are forced to pursue the case of rent with the Minaret Station near Wanaka. This is simply because the new rents faced by pastoral lessees exceed their incomes.

High Country farmers have some challenges, but we must remain resolute and not allow the bureaucratic takeover of the high country. The world is calling out for food and to use land sustainably. That’s what we are doing and want to continue to do.

Finally I’d like to thank my committee, including Bob as manager and Sonia for policy work, and thanks to Sue and my family for all their support, and finally I would like to thank the high country farming community for all your encouragement and resolute support.

ENDS

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