Shane Taurima Interviews Russel Norman and Jim Sutton
 
Greens Co-leader says Landcorp will effectively be paying rent to Shanghai Pengxin, making them tenants in NZ.
 
Norman: “…a government-owned entity is actually facilitating the sale of land into overseas ownership [which is] a very strange thing for a government SOE to be doing.”
 
Sutton: “No, we won’t be paying rent. We’ll be a share-farmer. A share-milker.”
 
Sutton denies rumours he used his casting vote to commit Landcorp to the deal: “It’s absolute nonsense. It’s not the way we make decisions… There has been no division within the Landcorp board over this issue.”
 
Sutton: “We risk pointlessly chilling the most important economic relationship we have [with China]”
 
Norman: “…we certainly don’t need this foreign investment.”
 
Q+A

SHANE TAURIMA INTERVIEWS RUSSEL NORMAN AND JIM SUTTON

GREG BOYED
Just before the Easter break, Shane Taurima spoke with Greens co-leader Russel Norman and Landcorp chair and former agriculture minister Jim Sutton. State-owned Landcorp will join with Pengxin to run the farms should the deal be approved, while the Greens argue that only New Zealand citizens and permanent residents should be allowed to own land here. Shane began by asking whether Pengxin’s offer for the Crafar farms is a done deal.
 
JIM SUTTON – Landcorp Chair
What is a done deal is that our most important economic relationship is with China, and we depend on access to that market to sustain New Zealanders in a first-world quality of living throughout, I think, the present century.
 
SHANE TAURIMA
                        Mr Norman, is it a done deal?
 
RUSSEL NORMAN – Greens Co-Leader
Well, in terms of the application to buy the land, I mean, it’s certainly not a done deal. We’ve seen that the application has been overturned by the High Court once. We’ll see what the ministers do. But they’ve got some big hurdles to get over.
 
SHANE           Mr Sutton, you alluded to some of the benefits before and why the deal
should go through. Why is it important for the Crafar deal to go through for the New Zealand economy?
 
JIM                  I think we have to think about what is important for New Zealand and what is important for China. For New Zealand, what is important is secure access to the major markets of the world, particularly the one that is already our most important market – China. What’s important for China in a way that New Zealanders probably don’t really conceive is food security, and that is why I think they want a bit of skin in the game in this joint value chain between New Zealand and China.
 
SHANE           Mr Norman, we are a small country, and we need foreign investment like this from China, and as David Mahon says, Asia’s watching.
 
RUSSEL         Well, we certainly don’t need this foreign investment. I mean, all it’s doing in this case is driving up the price of rural land, because they’re paying a very large price for it in order to pay off an Australian owned bank who are the ones who are exposed because they leant too much money to Crafar. So we don’t need this money. This farm was going to be developed one way or another. It would be producing food one way or another. The key thing for New Zealand is we have this tremendously valuable strategic asset, which is arable land with access to water, food-producing land. That food-producing land will only become more important as time passes, and for us to hang on to that strategic asset is critical to our economic future.
 
SHANE           Mr Sutton, New Zealand First leader Winston Peters, he says that if the deal goes ahead, it will mean Landcorp will end up paying about $18 million a year to the landowner. In other words, he says a New Zealand SOE will end up being a tenant of a foreign company here in New Zealand. Is that true?
 
JIM                  No, that is not true, and I think what is important to realise is we as a sovereign nation are perfectly entitled to make rules for foreign people wishing to buy farmland in New Zealand, and if we want to do that and have more restrictive rules than we have got, let’s do it, let’s make it clear what they are, and let’s apply them without fear or favour to everybody who comes from overseas and wants to buy a farm in New Zealand.
 
SHANE           Can I just clarify – so Landcorp won’t be paying any rent at all?
 
JIM                  No, we won’t be paying rent. We’ll be a share-farmer. A share-milker.
 
SHANE           Mr Norman?
 
RUSSEL         Clearly, what a share-milker does is they hand over a proportion of the production to the owner of the land in lieu of rent. It’s a kind of rent. So without mixing words, clearly they’ll be paying rent. They’ll be a tenant in the land, which is effectively what a share-milker does. So what the SOE’s done is this case is they’ve essentially facilitated the sale of this land into overseas ownership, if it goes ahead, because in the application Shanghai Pengxin made, they used the fact that Landcorp would be managing the land, would be running it, was one of the reasons why it should be approved. So we’re in a very interesting situation where a government-owned entity is actually facilitating this process of the sale of land into overseas ownership. And if, like me, you think that the sale of land into overseas ownership is a strategic problem for New Zealand’s economic future, then it does seem a very strange thing for a government SOE to be doing.
 
SHANE           Mr Norman, don’t you have to be careful that you’re not encouraging an anti-Chinese feeling? After all, we’ve had a number of other nationalities buy land without the same reaction. Don’t you have to be careful?
 
RUSSEL         Yeah, I think that’s a fair comment. Um, the Greens have had a very consistent approach. I mean, we think that New Zealand land should stay in New Zealand ownership, um, and we don’t care the nationality of the person applying – whether they’re Australian, American or European or Chinese. And we have been very consistent about that, and I think that’s very important. But nonetheless, we do need to make the case that food-producing land is only becoming more valuable, and you’d be a mug to sell the goose that lays the golden egg.
 
SHANE           Mr Sutton, we understand that the Landcorp board was split down the middle on whether to go ahead with this deal, and you had to use your casting vote to get this through. Is that correct?
 
JIM                  No, it’s absolute nonsense. It’s not the way we make decisions. But I want to make a point in response to what Mr Norman says. If I were Chinese looking at this and wondering whether New Zealand really had its heart in building the economic partnership with China, I would wonder why Canadians, Americans, Italians, Germans, Australians, Brits, can come into parts of New Zealand, buy farm after farm after farm after farm and nobody in Wellington blinks an eyelid. But when the first Chinese…
 
RUSSEL         The Greens do.
 
JIM                  …company comes along for this, all of a sudden it becomes a threat to our sovereignty, and I just think, ‘How would I feel about that if I were Chinese?’ And I know what I would feel about it.
 
RUSSEL         I certainly agree. And so, for example, the Greens objected, for example, when Shania Twain was buying land many years ago, and we raised concerns around James Cameron. Our approach has been consistent all the way through. Because, remember, the Labour-New Zealand First Government and then the current National Party Government, they approved hundreds of thousands of hectares of land to go into overseas ownership, and it was only the Greens who objected to it. And we’ve done it consistently regardless of the nationality of the person involved, because we agree - there should be a consistent set of rules around this. I think Jim’s got a point.
 
SHANE           Mr Norman, if we look at the deal and the benefits for New Zealand, we get two big new brands, $100 million over five years promoting New Zealand dairy, help for Landcorp to sell products in China. We even get walking access over some of the Crafar farms. What’s wrong with that?
 
RUSSEL         Well, it doesn’t really add much. New Zealand doesn’t really have a problem marketing its dairy products into China. We’ve increased our market of dairy into China very dramatically.
 
SHANE           But $100 million over five years.
 
RUSSEL         We just don’t have- That is not an issue for the New Zealand dairy sector: selling dairy products in the Chinese market. And it’s got nothing to do with the Free Trade Deal; it’s because of the melamine disaster. People in China are desperate for safe, healthy milk products for their kids, and that’s why we’re selling lots of milk powder into China at the moment, and that’s fair enough. I think the key thing is you’ve got to ask: these are dairy farms that were going to be producing milk anyway. The milk is going to be sold to Fonterra, um, who are then going to market it, and possibly Shanghai Pengxin may build a processing plant, so it will just go through their processing plant, but it will also just add to the exports that are coming out of New Zealand that would have come out of these farms anyway. So you’re not getting any new exports out of New Zealand. And in terms of vertical integration, which is where the real value chain is, it will be Shanghai Pengxin that controls the final step, which is their supermarkets in China, and that’s where you make the real money in a vertically integrated system - if you own from farm to processor to supermarket, and we won’t own that part of it.
 
SHANE           Mr Sutton, what does Landcorp stand to lose if the deal doesn’t go through?
 
JIM                  Nothing much, really. We see it, though, and I particularly see it as something that New Zealand itself, New Zealand as a whole, has a big stake in. We risk pointlessly chilling the most important economic relationship we have, pointlessly chilling it, and it’s time that the politicians of all stripes stood up and said, ‘We’re not going to discriminate against these particular buyers. We’re going to have the same rules for everyone. We’ll make them as tight as we think it appropriate, but we will apply them fairly without fear or favour.’
 
SHANE           And, Mr Sutton, can I just clarify the point that we traversed earlier in terms of you casting your vote to get this deal through - absolutely, categorically, you did not have to use your casting vote?
 
JIM                  Never. No, there has been no division within the Landcorp board over this issue at all.
 
SHANE           Well, thank you, gentlemen. Mr Sutton and Mr Norman, thank you both for joining us.
 
RUSSEL         Thank you.
 
JIM                  Pleasure.

ENDS