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OIO clarification inline with Federated Farmers

9 December 2010

OIO clarification inline with Federated Farmers

The new directive letter to the Overseas Investment Office (OIO), issued today by the Finance Minister, the Hon Bill English, is broadly in line with Federated Farmers emerging policy on foreign investment.

“Federated Farmers strongly supports overseas investment in the New Zealand economy. This includes overseas investment in New Zealand farmland by those wishing to farm that land,” says Federated Farmers President, Don Nicolson.

“Yet Federated Farmers is aware of public sentiment concerning the mass aggregation of farmland by overseas controlled corporates. We’re worried that this may be used as the basis for vertically integrated production, processing and marketing business models that send economic benefits overseas.

“All we ask is that appropriate scrutiny is delivered by the authorities, so pre-emptive calls by politicians to make it much harder for foreigners to buy farmland are lessened.

“New Zealanders generally have a love affair with their property, but we need to be aware of those who impose a double standard that impinges on the property rights of others.

“Freedom to sell to the highest bidder is a well recognised property right. Any new rules on overseas investment must preserve certainty to landowners, as well as allowing beneficial investment to continue.

“We also want any additional tests to apply only to where there is mass aggregation of farmland.

“This appears to be the case with the Government’s new trigger point for the new ‘economic interests’ factor at 1,720 hectares for dairy farms and 4,430 hectares for sheep farms.

“These trigger points, I feel, go some way to reducing or eliminating the risk of political whimsy, which Federated Farmers had wanted to see in the new rules.

“Yet the new ‘mitigating factor is one rule I am interested in teasing out further.

“After much discussion at Federated Farmers recent National Council meeting, our emerging policy demands a light regulatory touch. Any discretionary assessment on overseas investment in primary sector land should really only apply when the mass aggregation of that land is at stake.

“Federated Farmers view is that the Overseas Investment Act generally strikes the right balance between risk and reward.

“But to maintain the integrity of the OIO in farmland matters, the Office must not only rigorously assess applicants, but must also get out and enforce compliance with all of the conditions written into any agreement,” Mr Nicolson concluded.

ENDS

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