Positive side to foreign owners

The property boom has masked recession in Marlborough primary industries since 2004, Agriculture Minister David Carter said in Blenheim yesterday.

Mr Carter said productive land in New Zealand, including Marlborough, had been priced on the assumption capital gain would continue. That must change towards investment in productivity.

Foreign investment in land should continue as New Zealand needed capital, "but we do not want to end up as tenants on our own land". Especially in the dairy industry there was an argument for preventing overseas investors from buying up large tracts of land along with processing facilities, giving them control along the length of the production chain.

The predominantly overseas-owned Marlborough wine industry was a positive example of foreign investment, he said. Foreign ownership had brought in expertise and added to marketing stories. Healthy competition in the wine industry provided transparency that could be lacking in the dairy sector, where Fonterra was the one major player.

"The wine industry has done a superb job of managing its growing pains internally," he said. "But at the end of the day there will be a period of rationalisation as there has been in the sheep and dairy industries."

Vineyards could be bought at potentially less than the cost of establishment. Sheep and beef farmers were struggling yet sheepmeat prices in England had never been higher, said Mr Carter.

"A brilliant job has been done of positioning lamb as a premium product."

Returns failed to filter down to farmers because of over-capacity in the meat industry which had gone from processing 70 million to 32 million sheep as well as unfavourable exchange rates, he said. "The US economy is performing appallingly, hence the drop in the US dollar."

Mr Carter said a letter from Federated Farmers requesting that the Government subsidise the cost of rabbit control had arrived on his desk that morning. He would meet the organisation in mid-November to talk through the issues.

He expected farmers would welcome the Government's decision to make the Crown responsible for pest and weed control on Crown land.

"In the past the Department of Conservation and Land Information NZ have been excluded. That was not right," he said. "If DOC owns land it has the same responsibility to look after it as a private owner."

Mr Carter was in Blenheim yesterday to talk with rural veterinarians from top of the south company The Vet Company.