John Armstrong: Lochinver sale tricky problem for Key

Shanghai Pengxin wants to add the 13,800ha, $71 million Lochinver Station to its growing dairy-farming empire.

It is not often you find Winston Peters and Federated Farmers singing from the same song sheet. The unlikely pairing suggests that the sale of Lochinver Station to Shanghai Pengxin Group is one sale to foreign interests too many.

Peters' opposition is hardly a surprise. But having a conservative lobby group like Federated Farmers on board indicates Peters is on the right side of public opinion.

Unlike the rundown Crafar farms which were also purchased by Shanghai Pengxin and which produced a similar headache for National a couple of years ago, Federated Farmers notes Lochinver Station is a highly regarded farming venture. Under current policy, the OIO has to apply an "economic interest" test which requires the benefits of the sale to the New Zealand economy to be "substantial and identifiable". Will the sale create new jobs? Will it see the introduction of new technology or business skills into New Zealand? Will it lead to increased processing in New Zealand of the country's primary products? And so forth.

Federated Farmers notes that the Chinese purchasers must have something really special to offer to meet the economic test. "We are keen to know what that is," says the lobby group with more than a touch of pointed sarcasm.

The implication is that should the OIO approve this sale then that entity may as well be abolished because it would approve any sale.

The Government's handling of the matter since Colin Craig, the Conservative Party leader, revealed last Friday the sale was under way has not been flash for a party on the verge of an election campaign where National's allowance for gaffes and mistakes is roughly zero.

Steven Joyce put National firmly on course for getting on the wrong side of public opinion by declaring the near 14,000ha property was a "ridiculously small piece of land". That gaffe was compounded by Joyce's appalling display during a so-called debate on TV3's The Nation last Saturday. Joyce constantly and relentlessly hectored, badgered and interrupted Labour's Grant Robertson. The latter should be happy though. Joyce came across as National Party arrogance personified.

Hearing the unhappiness brewing in National's backblocks, Key conceded yesterday that if there was a "run" on farmland, and the public became agitated, then National would have to further tighten the regulations on overseas investment which were last revised in 2010.

The difficulty for National is that there is little flexibility to tighten the rules without instituting bans on sales of prime land. And that is not a message National wishes to send to foreign investors.

Debate on this article is now closed.