Discontent is "smouldering" in some regions as good pastoral land is converted to forestry to make it more sellable under overseas investment rules, Real Estate Institute of NZ rural spokesman Brian Peacocke said.

Peacocke, in releasing data showing that its All Farm Price Index fell by 4 per cent in the three months to May, compared with the three months to April, said overseas investment rules and other factors such as tighter credit conditions were making their presence felt in the rural sector.

"On the rural front, discontent smoulders strongly in a number of regions, fanned particularly by the ongoing emergence of evidence of sales of good pastoral land to forestry interests, this activity being aided and abetted by the Overseas Investment Office providing an environment conducive to investment from off-shore interests," he said in a statement.

"This factor, coupled with the inexorable grind of the full range of compliance issues and an evident hardening of lending criteria from within the banking sector is adding to a mood of widespread concern and caution within the rural sector," he said.

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"Product prices continue on a solid note, albeit volatility in prices being paid under the Global Dairy Trade auction system, plus the diminishing values of Fonterra shares, is causing farmers and financiers alike to gauge and re-assess budgets and equity situations within the dairy industry," Peacocke said.

REINZ data showed there were 63 fewer farm sales for the three months ended May 2019 than for the same three months last year.

The median price per hectare for all farms sold in the three months to May was $22,244 compared to $26,219 in the same period last year - a 15.2 per cent fall.

Peacocke said national sales data for the three months to May confirmed the general easing in sales activity currently being experienced around the country, compared to the equivalent period 12 months ago.

REINZ's Dairy Farm Price Index fell by 3.7 per cent in the three months to April against the same period last year.

The institute's All Farm Price Index adjusts for differences in farm size, location and farming type, unlike the median price per hectare, which does not adjust.

A spoksman for Forestry Minister Shane Jones said there was is little evidence to suggest that changes to the overseas investment rules are resulting in large amounts of forestry conversions on rural land.

As of June 17, nine applications have been approved under the new special benefits test for forestry since it came into effect in October 2018 – only four of which involve conversion of farmland to forestry.

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In total this means only 3,465 hectares of new forest out of a total of 51,274 ha land across the nine successful applications, the spokesman said.

In terms of what is in the pipeline, the latest information up to May 23 shows only four of the fourteen applications currently with the OIO for consideration are for conversions.

The 14 applications represent 59,000 ha of land in total. The four applications for conversions represent 7, 595 ha of land, with only 3,500 ha of new planting slated within those, the spokesman said.