26 November 2006

HIGH COUNTRY ACCORD
MEDIA RELEASE

High Country study claims 'entirely unfounded'

A report used by Forest & Bird to argue that the South Island high country is being "given away" and "privatised" by the government has been discredited in a review by two senior Victoria University academics.

Victoria University Professors of Economics Neil Quigley and Lewis Evans say claims made in a report by Dr Ann Lacey Brower, are entirely unfounded.

"These result from errors in the interpretation of pastoral lease rights, the tenure review process and data relating to its outcomes," says Dr Quigley.

In February Dr Brower, a visiting Fulbright scholar at Lincoln University, criticised the Crown's role in tenure review, a process which allows farmers to buy freehold title to their South Island high country farms in return for selling to the Crown their rights to land of conservation value.

In her report, she said, "government contractors and government officials are giving away the crown jewels and paying the recipients to take them away."

Forest & Bird then used Brower's conclusions to underpin a major campaign alleging that tenure review was biased in favour of farmers, and that conservation and the public were being short-changed.

Professors Quigley and Evans say Brower's errors include incorrect assumptions about the property transactions which take place during tenure review, an incorrect understanding of the property rights of lessees and the Crown, and a lack of understanding of the nature of a pastoral lease and the value of the lessees interest in it.

They say a bundle of property rights is allocated to holders of perpetually renewable leases and this makes the concept of ownership extremely complex.

"There is no simple match between allocations of property rights [associated with these leases] and the concept of ownership as it used in popular language."

"Brower appears not to understand that the rights of a pastoral lessee are very different from the rights of a person 'renting' property as that term is popularly used."

Quigley and Evans point out that high country farmers hold title to land which has been transferred into private hands by the Crown. The fact that this was done through a perpetually renewable lease rather than through the transfer of freehold property rights does not change the fact that that properties concerned are now in private hands.

They say Brower is also incorrect to claim that the Crown had retained valuable property rights in pastoral leases.

"The Crown has no rights to do anything with the land except collect rent, and adjudicate on any activities that are not permitted under the lease."

"Unless Brower can show that some lessees have terminated their lease on review and handed use rights back to the Crown, then we have to assign a value of zero to the rights of the lessor aside from the value of the rent."

Quigley and Evans describe as "entirely implausible" Brower's claim that the Crown has gifted valuable property rights to leaseholders during tenure review.

"She completely misinterprets the available data … and makes a series of claims about the outcome of the process that are entirely erroneous."

"Our analysis … makes it implausible that the tenure review process has resulted in any substantial over-payment by the Crown."

They say that Brower did not consider the social benefits of land tenure reform, which they believe will be substantial.

Freehold title is better suited than pastoral leases to multiple and alternative uses of land. This is important, say the authors, because there are now other options for the use of this land which weren't envisaged 50 years ago.

As for the land acquired from former lessees for conservation, they say the price paid under tenure review may well be less than what conservationists and others would be prepared to pay to achieve such a substantial increment to the conservation estate.

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