New Zealanders are being priced out of farming by foreign corporations, Labour Leader David Shearer said after an iwi group seeking to buy three farms from Shanghai Pengxin claimed the Chinese company wanted too much money for the land.

Interests associated with King Country iwi Ngati Rereahu and central north island iwi Tuwharetoa this morning said Shanghai Pengxin was seeking the "ridiculous" sum of $66.5 million for three of the 16 farms it bought earlier this year for a total believed to be just over $200m. The iwi interests believe the three farms, which include areas of cultural significance farms, are worth about $45m.

The price sought by Shanghai Pengxin showed "Kiwi farmers are being priced out of the market by foreign corporate buyers", Mr Shearer said.

"Kiwi farmers who are the best in the world at what they do simply can't afford to buy good land in their own country because large valuable tracts are being sold off to overseas buyers under this Government."


That was why Labour was promoting legislation to ensure foreign buyers couldn't purchase land here "unless the benefits are greater than a New Zealand investor could produce and it brings substantial job creation and increases in exports".

The Tiroa E and Te Hape B Trusts representing King Country iwi Ngati Rereahu were part of the Sir Michael Fay led group which lost to Shanghai Pengxin in a bid to buy the 16 former Crafar dairy farms this year.

However, the trusts have been in negotiations to buy two farms at Benneydale south of Te Kuiti, while Tuwharetoa representatives who were also part of the Fay group have been negotiating to buy a farm at Tauhara on the Napier Taupo highway.

Chairman of the Ngati Rereahu trusts Hardie Peni, said he had been negotiating with Landcorp which is to run the former Crafar farms for Shanghai Pengxin.

However Mr Peni said Landcorp had in recent days said it wanted a deal with the two iwi signed by tomorrow, conditional on both iwi withdrawing from the Appeal Court process challenging Shanghai Pengxin's purchase which was initiated by the Fay Group earlier this year.

"However, the price being offered to us, $66.5m for just three of the 16 farms, was ridiculous."

He said Landcorp and Shanghai Pengxin were seeking the $37.5m for the Benneydale farms which he believed were worth about $23m. The $29m sought for the Tauhara farm was also significantly above the $22m offered by the Tauhara buyers in the Crafar Farms Purchase Group.

The Fay Group is appealing against Justice Forrest Miller's High Court ruling that with support from Landcorp, Shanghai Pengxin has the necessary expertise and acumen to operate the farms as required under the Overseas Investment Act.


The appeal is due to be heard on Monday.

"The timing of this offer is very significant and I have little doubt it was an attempt to undermine our buying group ahead of the court appearance," Mr Peni said.

Ngati Rereahu and Tuwharetoa have had claims on the land where the three farms are located since the 1800s and saw the potential sale "as an opportunity to reclaim the land and a number of wahi tapu sites through a commercial transaction".