Prime Minister John Key says he is happy for a Chinese company to buy a central North Island farm so long as the correct process is followed.

A "one-off" slice of farmland nearly twice the size of the Crafar Farms could be heading to offshore buyers, reigniting the debate over foreign acquisition of valuable New Zealand land in the lead-up to the election.

The potential sale of Lochinver Station on the Napier-Taihape Rd to Chinese company Shanghai Pengxin was described on Friday as a "tragedy" and "madness" by New Zealand First and Conservatives.

If given approval by the Overseas Investment Office (OIO) and Chinese authorities, it would be the second-biggest sale of New Zealand farmland to a foreign owner in terms of value, and one of the biggest by area.


Pengxin, the owner of the 16 Crafar farms, confirmed yesterday its wholly-owned subsidiary Pure 100 Farms Ltd had signed a sale and purchase agreement with the Stevenson Group, which has owned the 13,800ha station for 54 years.

Mr Key told Radio New Zealand yesterday that the company had had success with the Crafar farms.

"As everyone will know, who knows the situation, those farms were run down and in a very poor condition and in the time that Shanghai Pengxin has owned them, they have been substantially improved and underpinned New Zealand's jobs."

Hundreds of thousands of New Zealand jobs were underpinned by foreign capital and it did not matter if that came from China, Germany, the United States or Australia, Mr Key said.

There was a process to follow and so long as a company could prove economic benefits, companies should be able to buy the land, he said.

"In my view a far better way of a long-term relationship isn't buying huge tracks of New Zealand land it's actually fundamentally around the development of jobs and processing and all of those kinds of things that add value in New Zealand."

The offer was not known, but the land was valued at just over $70 million. It could be used for sheep, beef and dairy farming.

Conservative Party leader Colin Craig revealed the deal in Hastings last week because he felt foreign purchases of valuable land was an election issue that should not be kept secret.

"These things are rare in New Zealand. I think it would be a tragedy to lose it to foreign business interests and I think New Zealanders think the same."APNZ