Act Party pushes for sale of state-owned Pāmu farms amid losses

Beef cattle on Molesworth Station, managed by Pāmu. Photo / RNZ

By Sally Wenley of RNZ

The Act Party is pushing for some state-owned farms to go on the market – claiming they are taking taxpayers for a ride by losing money.

This follows Prime Minister Christopher Luxon hinting National will campaign on asset sales in next year’s general election, saying a win in 2026 would be the mandate he needed to push ahead with the move.

Act leader David Seymour agreed, saying privatisation needed to be talked about more openly while the party’s agriculture spokesman Mark Cameron said selling Landcorp is a “no-brainer”.

Pāmu, formerly Landcorp, is a state-owned enterprise and the country’s largest pastoral farmer, managing about 360,000ha across 100 farms.

Included in the mix is Molesworth station, one of the largest high-country sheep stations in the country. It is owned by the Department of Conservation and managed by Pāmu.

Across its farms throughout the country, Pāmu employs more than 600 permanent staff and runs 1.3 million stock.

Last year Pāmu recorded a $26 million loss it attributed to falling livestock prices, high interest rates and the ongoing costs related to Cyclone Gabrielle.

Cameron, who farms in Northland, and is the Primary Productions Select Committee chairman, doesn’t believe the state should run farms that have underperformed on taxpayers’ rural investment for years.

“Sadly, Pāmu has more recently run at a loss quite continually so the issue comes back to, would the private citizen do a better job of running said farms and there are several of them.

Act Party agriculture spokesman Mark Cameron. Photo / Mark Mitchell

“I have always argued that perhaps they would.”

Cameron is keen for parcels of land to be sold to create an environment for new farming ventures in the private sector.

“How is it so that the dear old taxpayers are on the hook continually flogging a dead horse and arguably Pāmu has not managed to get on the right side of the fiscal ledger?”

He described Pāmu farms he has been on as beautiful – but believed cross-subsidisation from one farm that was doing well to another that wasn’t performing as well was wrong.

“I think it’s high time that everyday New Zealanders have a say on the $2.2 billion of assets locked up in Pāmu Farms that might be better run by private citizens.”

Cameron added that some of the land would stay in the state’s hands.

Support for Act’s stance

Federated Farmers national president Wayne Langford.

Federated Farmers is meeting next week to discuss its stance on whether it supports some Pāmu farmland being sold to private farmers.

Its president, Wayne Langford, said despite not making a stance about Pāmu’s future yet, farmers were understandably questioning the state-owned enterprise (SOE)’s performance following a multimillion-dollar loss last year.

“Mark Cameron and a number of farmers I have talked to are right to be questioning this and the options put forward because we haven’t seen the highest levels of profitability coming out of Pāmu.

“However, my understanding is that this year they are heading towards a record profitability and potentially we could see the return many of us have been asking for for some time.”

Langford said some of the farms would be worth over $100 million and not many farmers could afford them.

Some private farmers believed it was an uneven playing field when buying stock at the same time as a Pāmu farm.

“One concern we have heard from our members when they are neighbours of a Pāmu farm is that sometimes those farms are buying stock and feed at a higher price.

“It’s setting an unfair platform that those farmers that are neighbours feel they are competing against the Government on a Pāmu farm that is potentially making a loss.”

Pāmu agrees on shortcomings

Pāmu Farms chief executive Mark Leslie. Photo / Kara Tait Photography

Pāmu Farms expects to make a profit this financial year but its chief executive admitted it needed to improve its performance.

Chief executive Mark Leslie said its farms created more value beyond just the cash in the business.

“I accept there’s been some areas we have probably underperformed in and hence there’s been a real focus to shift performance.

“But at the same time, I think there’s a real opportunity for New Zealand there around what we are doing with genetics and methane mitigation.

“There’s real value that Pāmu provides that would be lost, and to me, that would be sad.”

Leslie said Pāmu regularly met with the Treasury and has yet to meet with new SOE Minister Simeon Brown.

“We made some significant changes about two years ago to really focus on our farming performance and that was setting targets for every farm and we had a clear goal to lift the profitability across the board.

“An element was making some structural changes that integrated the dairy and livestock business with a more regional focus.”

Leslie said some of its farms were more profitable than others and some were extremely large, so there would be complexities and challenges if the shareholder (the Government) put some on the market.

In a statement to RNZ, Brown said he wanted to ensure taxpayers got good value for money from all SOEs and he would ruthlessly find areas where the Government could push harder to improve performance, including from Pāmu.

- RNZ