Wednesday, 07 December 2016 06:55

‘For sale’ sign on 10 more farms

Written by 
Despite Finance Minister Bill English describing Landcorp as a poor investment he says the SOE is not up for sale. Despite Finance Minister Bill English describing Landcorp as a poor investment he says the SOE is not up for sale.

State-owned farmers Landcorp is quitting 10 more farms totalling about 11,650ha.

Two are offered for sale outright, and eight are offered to iwi for first right of refusal.

The farms are mostly sheep and beef units and should attract an enthusiastic response, says PGG Wrightson Real Estate general manager Peter Newbold.

“The regions where these properties are situated are short of farms for sale of this quality and size. As the country’s largest farmer, Landcorp has an excellent reputation and these farms present favourably.”

Newbold expects the farms to attract solid offers and sell quickly.

The properties include Copper Road Farm (1483ha), a sheep and beef breeding farm 88km southwest of Dunedin; and Caroline Terrace (120ha), a cattle grazing block with development potential on Cape Foulwind Farm, near Westport.

Both are now on the market.

Others are expected to be offered for sale in late January to early February depending on iwi takeup of the farms offered to them. Those farms have not been named.

In September Landcorp said it would sell nine of its 140 farms in “reconfiguring its portfolio”. The company denies the sales show it is under financial stress. Six of the sheep, beef and deer farms were in the South Island and three in the North, totalling just over 14,000ha. Ngai Tahu was expected to take the bulk of the southern farms.

When the September sales were announced, Landcorp chief executive Steven Carden said there was no financial duress in the decision.

In the 2015-16 year, the company recorded a net profit after tax of $11.5 million – mostly $7.4m profit on land sales. It reported a net operating loss of $9.4m on revenue of $209m and for the second year in a row did not pay a dividend to the Government.

Carden says the farm sales are part of a three-pronged strategy: to exit deals that are not working, such as the sharemilking contract with Shanghai Pengxin; to developing the Pamu brand with products like sheep milk; and to free up capital for investment.

“It’s a question of reconfiguring our portfolio,” Carden said at the time. “Over the last 30 years Landcorp has bought and sold 140 farms.”

Debate has raged about the benefits of the Government owning Landcorp, some calling it to quit its investment in the business.

But Finance Minister Bill English rules out selling Landcorp despite describing it as a “poor investment” during a DairyNZ farmers’ forum at Mystery Creek in May.

“It’s a low-returning asset, so you have $1 billion tied up in that organisation and it pays taxpayers little, in some years nothing, so it’s a poor investment. However, we’re committed to keeping it.”

» Connect with Rural News

More like this

Butt out! — Editorial

Politician Shane Jones says his position as Associate Minister of SOEs, including Landcorp (Pāmu), gives him the right to have a crack at the quality of Fonterra’s farmer governance.

Loud un-Kiwi critic

How can the state-owned Pamu Farms (formerly Landcorp) justify keeping the loudmouth freshwater ecologist Dr Mike Joy, of Victoria University, on its environment reference group?

» The RNG Weather Report

Featured

 

A lesson in political science

The Zero Carbon Bill has just been passed into law, but not without significant misgivings from across the farming sector.

RMA not good enough

New Zealand's natural environment is now much more degraded than when the Resource Management Act was developed in 1991.

Fonterra chairman feels the heat

Frustrated Fonterra farmers called for chairman John Monaghan to take responsibility for the co-op’s financial debacle and step down.

» Connect with Rural News

» Connect with Rural News

» The RNG Weather Report

» Latest Print Issues Online

The Hound

Job hunting?

A mate of the Hound reckons outgoing special agricultural trade envoy Mike Petersen, who is due to finish his current…

Hot air?

With the Government wanting to implement huge costs on the livestock farming sector by making New Zealand the only country…

» Connect with Rural News