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The public and private benefits of tenure review

Fri, 11 Jun 2004

The public and private benefits of tenure review

Speech to Federated Farmer's High Country Conference, Millennium Hotel, Queenstown, June 11

Ladies and Gentlemen,

Thank you for the opportunity to speak to you. I am told it has been a long while since a Conservation Minister last addressed this conference so I am particularly pleased to be here.

I gather the theme of your discussion today is 'multiple land-use'. I can understand why because the high country is poised to undergo something of a proliferation in land-use as more farmers choose to put their Crown pastoral leases through tenure review.

I want to talk about this proliferation from the point of view of conservation because as you know tenure review requires that conservation become one of the new uses for high country land.

In recent months this fact appears to have become a point of controversy among some of you, particularly those involved in negotiations with the Crown over which pieces of certain pastoral leases will be freeholded to farmers and which will be returned to the public.

I want to take you through exactly what the Labour-Progressive government's position is on this issue, and in doing so I'll attempt to deal with some of the concerns you have raised, particularly those relating to the development of a network of high country parks.

As a starting point, I thought it would be worthwhile recapping some of the history of tenure review because frankly there has been a tendency by some people to rewrite it.

As I see it, tenure review began because farmers asked for it.

Farmers wanted the flexibility to diversify the way they used their land, and so they approached the government asking for a way to unwrap the high country from the crown pastoral leases that largely restrict use of it to grazing

The government responded: a voluntary process was developed in which a negotiation takes place between the Crown and the leaseholder. The Crown agrees to allow the farmer to freehold a proportion of the lease in return for areas of significant natural value being returned to explicit public ownership.

This process was formally enshrined in the Crown Pastoral Land Act in 1998 by the then National Government after extensive consultation with farmers.

The process recognises the public and private interests in crown pastoral leases, and more importantly, it balances changing land-use in the high country with the permanent protection of slices of it.

In a sense this protection also compensates for the fact that the grazing restriction in the high country has traditionally shielded its sensitive natural environments from the effects of land development. That shield will no longer be there once land is freeholded.

To date, the tenure review process remains unchanged from 1998. Let me say that again, the Labour-Progressive government has not changed the Crown Pastoral Land Act in any way. Tenure review remains as it was under National and entirely voluntary for leaseholders.

So what have we done in the high country?

Our initiatives have been threefold.

First, we have sought to fund tenure review significantly better thus enhancing the public and private opportunities in the process.

A year ago, Federated Farmer's representatives approached me and other ministers complaining that tenure review was moving at an agonizing slow pace.

Some farmers have subsequently claimed that this is because the Crown is asking for too much in negotiations.

When we looked at the issue, we discovered that the real problem was the process, which is labour intensive and expensive, had never really been properly resourced.

We have convincingly dealt with that problem in this year's budget. Land Information New Zealand will receive an additional $15m over four years to fund the process of tenure review, and a contingency fund of up to $46m to cover the costs of tenure review settlements negotiated with farmers.

The Department of Conservation (DOC) will receive an extra $18m over four years to fund its involvement in tenure review, and more importantly, the administration of new conservation lands flowing from it, and from recent land purchases.

The second initiative the Labour-Progressive government has undertaken is to sharpen up the objectives the Crown's agent uses to decide what it will seek in negotiations with farmers over tenure review.

This is to ensure that there is consistency in the approach taken by the Crown across the high country in dealings with different farmers.

The new objectives are as follows:

1. To ensure that conservation outcomes for the high country are consistent with the New Zealand Biodiversity Strategy. 2. To progressively establish a network of high country parks and reserves. 3. To foster sustainability of communities, infrastructure and economic growth and the contribution of the high country to the economy of New Zealand. 4. To obtain a fair financial return to the Crown on its high country land assets.

These objectives hint at the Government's third initiative in the high country, the development of a network of high country parks and reserves.

There has been a lot of confusion among farmers about this policy so I want to dwell on it for a while.

It is clear from the Crown Pastoral Land Act that as a consequence of tenure review parcels of land in the high country will be gradually passing to the conservation estate.

What the Labour-Progressive government has said is let's seize the opportunity created by tenure review to shape these parcels of land into a coherent network of parks and reserves that will be a major social and economic asset to the region and the nation.

We see these parks as places where the unique and beautiful environments of the high country, its heritage, and its extraordinary recreation opportunities, can be preserved while land use around about changes.

We are not seeking to displace high country farming with parks. We are seeking to progressively locate them alongside farming so the new economic and social opportunities parks bring can complement existing agriculture.

I have been engaged in the task of sketching out the beginnings of this network beyond the two parks we have formed at present - Korowai/Torlesse and Te Papanui. I have started to do so through a series of strategic land purchases by the Nature Heritage Fund.

These purchases have been made in areas where we think tenure review may yield conservation land over time, where there is already neighbouring protected lands that provide the foundations for parks, or where there are icon properties.

The purchases are doubtless well known to you - Birchwood in North Otago, the Poplars in North Canterbury and Clent Hills out of Ashburton. All have been bought in good faith from willing sellers.

In the case of Clent Hills, we co-operated closely with three surrounding high country farmers to separate off the most productive agricultural land from the area that was to pass into the public conservation estate.

The local farmers bought this land and expanded their businesses. They have welcomed the opportunities a Conservation Park in their area brings.

Unfortunately, these purchases and the notion of a parks network has resulted in some in the high country perceiving a shift in the goal posts in tenure review in favour of conservation

Not so. Nothing has changed in that regard since Denis Marshall was Conservation Minister.

All that has happened is the Government has a more coherent approach to what is being sought in negotiations with farmers wishing to enter tenure review.

I have heard claims that 60 per cent of the land in the high country is going to pass to Department of Conservation under tenure review, and that we have a secret target of obtaining 1.3million hectares.

Here's a dose of reality. Some 30 tenure review deals have been completed since 1998. In those deals about 66 per cent of the land has been freeholded by farmers and 34 per cent returned to the public.

In other words, the complete opposite of what is claimed is actually occurring.

The 1.3million hectare figure is an estimate of how much of the high country could be said to have conservation values. It is not a target.

One of the difficulties for me as Conservation Minister in planning around tenure review is that I cannot say with any certainty how much land is actually going to pass to the public or where it will be.

This is because I am not driving the process, farmers are. Farmers decide whether they will enter the process, and they decide whether or not they will accept the deal that is negotiated. No one is being forced to go through tenure review. It is a choice.

When it comes to giving an outline of where I would like parks to develop I'm somewhat reliant on intelligence from the ground in the high country of what farmers are thinking and planning.

As I've already stated the areas where there have been strategic purchases are particular spots we've identified. Beyond that there are significant natural values in the following areas where I would hope to see parks developed:

the Eyre mountains, the Pisa range, · the Remarkables, · the Ida/Hawkdun/St Bathans range, Lake Ohau, The Kirkliston and Hunter ranges, · the Rock and Pillar range, · the Kaikouras, · and the Old Man/Garvie/Old Woman ranges.

The precise boundaries of these parks, how big they will be, and how swiftly they will be developed, I can't answer. Again, to a large extent it is in the hands of farmers.

If you are discussing multiple land use today, then I would encourage you to consider conservation, and particularly conservation parks, as another form of land use in the high country.

There is a perception in some quarters that conservation is the only thing that occurs on land under the administration of DOC. Actually that isn't the case.

Conservation is essentially a system of land management. Yes, the needs of threatened native species and the recreation opportunities of New Zealanders are placed ahead of economic development on conservation land, but that does not preclude all economic use.

In fact economic use of conservation land is increasing, driven largely by tourism and recreation focussed businesses.

Concessions to operate on conservation land are up 350 since 2000, and the number of visits to conservation land is estimated to have risen to 33 million last year, up from 28 million the year before.

I think conservation can add new dimensions to regional economies. A study by some Christchurch economists recently estimated that conservation land on the West Coast may be supporting over 1800 fulltime jobs, and delivering some $220m a year to the region.

Because there has been little analysis in this area, the West Coast study is based on some assumptions but it provides at the very least an indication that conservation land is not just an economic opportunity lost. It can deliver in tangible financial as well as social ways to individuals and communities.

Farmers are uniquely placed in tenure review to take advantage of these opportunities.

In many cases your properties will be neighbouring new parks. That will increase your land values, but it will also mean that even if you don't want to become tourism entrepreneurs you will be extremely attractive joint venture partners for those who do.

A little known fact is concession opportunities in future parks can be secured by high country leaseholders as part of tenure review.

I'd encourage you to be progressive in your thinking about these concessions rather than dismissive. The more strings there are to your economic bow the more shielded you are from down turns in particular industries.

While the economic opportunities of these concessions may not appear significant today trends suggest they may well become so tomorrow.

Many of the existing major tourism areas are becoming saturated, and as the type of tourists being attracted to New Zealand changes to a more independently minded traveller, it is entirely possible that the South Island High Country will become a very appealing alternative destination.

I have heard some concerns expressed from the high country to the effect that these tourism and recreation opportunities are all very well but they will be at the expense of stock units for the merino industry.

Yes, that is true to some extent. Right now about 500,000 hectares of high country is not used for farming because it unsuitable. Although much of the land that is likely to flow to the public from tenure review will come from this 500,000 hectares, some it will also be land that is grazed at present.

I know there is some debate among you about the impact of grazing on native species but take it from me the nation's conservation experts do not agree with you.

Am I concerned about the loss of merino stock units from the high country?

My response is to ask you the same question. It seems to me a bit rich to fire that salvo at the Crown when it is farmers that often want to go through tenure review to diversify their land use away from grazing.

In areas where tenure review is well advanced, such as Central Otago, freeholded grazing land has been planted in grapes and sub-divided not by the government but by farmers.

Individuals and whole communities have been enriched by this economic diversification. I applaud it, but I am not about to take responsibility for it.

Before I finish I want to touch on two further issues - covenants, and the reputed precedent set by the price paid for Birchwood Station.

I noticed alternative mechanisms of protection, such as covenants, were among the topics you were keen to hear from me about it.

Personally, I think covenants in conservation generally are fantastic. I have been a big supporter of the QE II Trust and I have significantly increased its funding.

Conservation is not just about public land it is also about working with private landowners, and I am constantly impressed by the number of farmers queuing up to deal with QE II.

Having said that, I accept that covenants have limitations. They are very useful for smaller discrete areas, but less effective for larger areas unless what is being attempted is landscape protection, as opposed to intensive management.

In the high country, and as part of tenure review, I expect that covenants will continue to be a tool. How widely they are used will depend on each individual property, the negotiations around it, and the covenant terms demanded by farmers.

However, I think farmers do need to bear in mind that there is a public interest element at play in tenure review that counts against covenants.

Like it or not, no responsible government can pretend that the public of New Zealand does not have an interest in Crown leases. In many cases that interest is simply best recognised by public ownership of some areas, particularly areas that hold considerable appeal for recreation. This is because covenants still leave farmers with trespass rights.

Covenants also carry their own unique costs because of the need to monitor them to ensure they are complied with. In each case, their cost-effectiveness has to be weighed up against the cost-effectiveness and additional benefits of full public ownership.

Finally, Birchwood Station. It has been claimed that the $10m paid for Birchwood by the Nature Heritage Fund is a "market signal" for property prices in the high country, and particularly individual properties with high conservation values.

At the risk of dashing a few expectations, I beg to differ.

Cabinet signed off on the price for Birchwood because it was a special case. The sensitive way the property had been managed had left in tact conservation values across 80 per cent of it. These included areas of highest priority.

The lease contained threatened forests and crucial habitats for threatened birds, such as the black stilt. It also contained a unique cocktail of recreational opportunities of great interest to the public. Frankly there is no other lease quite like it.

If you wanted proof of that fact consider the price the Nature Heritage Fund recently paid for Clent Hills station.

We bought 10,000 hectares of the 12,000 hectare station for $2.55m. I think if you compared that per hectare price with the $10m paid for the 23,000 hectares of Birchwood you would find it is considerably less.

That concludes my prepared speech today. I apologise for its length but I wanted to touch on as many of the issues that are concerning high country farmers as possible.

My basic approach to conservation issues in the high country is one of balance. I appreciate that tenure review negotiations must be a frustrating process for farmers and a source of anxiety.

I want to reassure you again that this Labour-Progressive government has no plans to make tenure review anything other than voluntary. We reckon there is more than enough motivation for leaseholders in the process to keep it chugging along at present.

Given that it takes about three years for each tenure review deal to be concluded, it is likely to be a long time before the process is finally laid to rest in the high country even with the additional resources we have pumped in.

Perhaps that is best. Don't you say on the mainland, the best things take time.

As I said earlier, I am happy to answer questions.


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