The Government would move to crack down on farm sales to foreign investors in the event of a an international "run" on New Zealand rural land, Prime Minister John Key says.
Chinese company Shanghai Pengxin plans to add the 13,800ha, $71 million Lochinver Station near Taupo to its growing dairy-farming empire, it emerged last week, rekindling land sales to foreigners as a political issue.
Mr Key's Government has so far minimised the significance of the deal, which now requires only Overseas Investment Office approval, saying it is but a tiny fraction of New Zealand's substantial rural land area, and that existing rules are sufficient to protect the nation's interests.
But with political rivals and potential allies including Labour, the Greens, NZ First and the Conservative Party all weighing in on the Lochinver sale, Mr Key told reporters his Government would not sit by if the pace of land sales quickened.
"If there was a really serious run on New Zealand land I think that would be unacceptable to most New Zealanders and if we were the Government, we would act to try and slow that down."
He also defended his Government's record on rural land sales, saying it had tightened up rules in 2010 during the controversy around the sale of the Crafar farms to Shanghai Pengxin and had been allowing sales "at a much slower rate than Labour ever did in the last five or six years of their Government".
Mr Key's Government allowed net sales of 218,000ha of rural land to owners abroad since the end of 2008 or an average of 39,000ha a year. In its last four years of Government, Labour approved the sale of 277,000ha or an average of 69,000ha a year, a figure boosted by the 2006 sale of 176,000ha of forests by Carter Holt Harvey to US company Hancock.
Labour finance spokesman David Parker said the forestry and wood processing industry was now worth far less to New Zealand since the sale of forests to overseas interests and that had changed his party's view on land sales to foreigners.
Meanwhile, Federated Farmers has gone public with the fact it is "uneasy" about the sale of Lochinver to Shanghai Pengxin.
President William Rolleston said foreign investment was vital but the farming group was concerned Shanghai Pengxin was working towards "vertical integration" or having a presence from the pasture to the supermarket shelf which would pose a threat to New Zealand's interests.
The farming group wanted New Zealand to follow Australia's lead and set up a register of farm land.
"It would take the political sting out of the whole conversation about overseas ownership. I suspect that there's a lot less land in overseas ownership than we might think."
But Mr Key said a register already existed in the form of the Overseas Investment Office - "the bottom line is farmland purchases almost always have to go through the OIO".
He said based on newspaper reports the amount of farmland under foreign ownership was small. "I think it was under 1 per cent."
Land Information NZ, which runs the OIO, said it did not have records of the amount of rural land under foreign ownership for a number of reasons.
Mr Parker said a register "would be a good idea, but I don't need a register to know that for me it's wrong to sell New Zealand land to foreigners".
Net land sales approved to foreign investors
2014: (year to date) 11,274ha