The announcement by the NZ Government that it has approved the sale of Crafar Farms to a Chinese corporation seems likely to reignite debate about the foreign ownership of farm land in New Zealand - a debate that is also to the forefront in Australia.

The Crafar Farms saga initially came to prominence in 2009, when the 16 dairy farm (almost 8,000 hectare) business developed by the Crafar brothers was put into administration after encountering financial difficulties. When offered for sale by the receiver/managers, a Chinese company was the leading bidder, but in the face of mounting public opposition, this was eventually rejected by the NZ government. Interestingly, the NZ Government-owned Landcorp Farming Limited was understood to be one of several groups that were seeking to buy the farms. The Chinese purchase was also opposed by the Chairman of Fonterra (NZs and the worlds largest dairy company) on the grounds that the Chinese buyers proposed to establish their own milk processing and supply-chain arrangements to China and that would presumably increase competition for Fonterra. This seemed somewhat ironic, given Fonterra's ownership of substantial dairy assets in China! 

The NZ Overseas Investments Office (OIO) has apparently approved the sale of Crafar to Chinese company Shanghai Pengxin, although interestingly it appears that one of the conditions of the sale is that the NZ Government requires that the business will be managed by Landcorp (no conflict of interest there!) and that the business will work in cooperation with NZ dairying interests to help Landcorp expand its business and markets in China.

One aspect of the debate which is of interest to Australia is the fact that the NZ OIO can detail exactly how many hectares of land have been purchased by overseas interests over recent times - something that it is not possible to do in Australia (as the ABARES report on the issue highlighted last week).

These and related issues associated with the future management of  agricultural land in Australia will be the subject of a forthcoming conference to be convened by the Australian Farm Institute in May, 2012.