Is the Lochinver Station sale John Key's 'Corngate'? Voters may surprise us.
Elections always produce their surprises. Many of them have no impact on voters' intentions. But some do, since they either go to the credibility of political parties, or they relate to a policy issue that actually matters to voters. So, for instance, the GE 'Corngate' issue hurt Helen Clark in 2002, and the Exclusive Brethren fiasco hurt National in 2005.
So is the revelation that Lochinver Station is to be sold to Shanghai Pengxin in this category? At first blush it would seem so, since the ownership of farmland is said to matter to voters. Perhaps the opinion polls over the next couple of weeks will tell us whether this is so.
One thing is pretty sure. Colin Craig will not be the beneficiary of any electoral fallout. Breaking a story is not the same as owning it. The last few days has shown the ability of those with a long-term track record to wrest back the issue. The news now only reports the views of Winston Peters and of Labour, with National’s response.
National is clearly aware of the risk. John Key, ever sensitive to the mood of voters, has signaled that National would act if there were a run of overseas owners buying up farmland. Unusually, Steven Joyce started off key, emphasising that Lochinver station was only a “ridiculously small amount of the North Island.” I suspect that many New Zealanders will not view the sale of one of the nation's largest farms from such a perspective.
With Labour polling in the twenties, it was inevitable they would scratch this itch, without too much regard to the potential risk of judicial review or trade agreement obligations. From Labour’s point of view, these are issues to be sorted once in government. The overriding imperative is to first get into government.
So how is the issue going to develop over the next few weeks?
New Zealanders will want to know how much farmland is actually owned by foreigners; it seems surprising that we don’t know this. The high-end estimate of nearly 10% seems grossly excessive, but 1% seems a bit low. For instance there are 11,000 dairy farms in New Zealand. Is it likely that foreigners own only 100? Shanghai Pengxin owns 26 dairy farms alone. At the very least, National is going to have to concede this point. Even Federated Farmers wants this.
The second thing that New Zealanders will want to be absolutely demonstrated is that overseas owners will do more to improve the land than New Zealand owners would. And they will be skeptical that they will.
In fact, Shanghai Pengxin has dramatically improved the Crafar farms. There is substantial evidence they will spend many tens of millions converting much of Lochinver into dairy farms. Since so much of it is flat, at around 500 metres elevation (I grew up not so far from the Lochinver), it is very suitable for dairy conversion.
Perhaps a key concern for New Zealanders is the nature of the relationships that the overseas owners, particularly large-scale owners, have with New Zealand. Do they build enduring relationships with local businesses? Should this be made a condition of any purchases?
This was not explicitly required by the OIC from Shanghai Pengxin, but in practice they have done so. The partnership that Shanghai Pengxin has developed with Maori owned milk processor Miraka is instructive of the possibilities. Would it be reasonable to go from this being a desirable outcome, to being a required outcome for any such investment to be approved?
A debate conducted in the heat of an election is not always going to be most informed or dispassionate, but it has the advantage of putting focus on the issue. And each of the major political parties has to respond in a way that meets voters concerns, without abandoning the philosophical values of the party.