Farm bid 'test for rules'

Photo / Christine Cornege

As another Chinese bidder makes a play for the former Crafar farms, industry body Federated Farmers is backing new rules on foreign ownership.

Private conglomerate Shanghai Pengxin has lodged an application with the Overseas Investment Office (OIO), hoping to meet new rules for foreign investment brought in after public concern about farm sales to foreigners.

The company has agreed to pay more than $200 million for the 16 farms, which receiver Brendon Gibson said was by far the best offer.

A bid for the 16 farms by Hong Kong stock exchange-listed Natural Dairy (NZ) Holdings was rejected last year by the Government, acting on OIO recommendations. Finance Minister Bill English said last year the new rules increased ministerial flexibility to consider a wide range of issues when assessing overseas investments in sensitive land.

Federated Farmers said the application by Shanghai Pengxin would be an acid test for revised rules.

"The OIO revisions were in line with the federation's draft policy on foreign ownership," said Federated Farmers Dairy chairman Lachlan McKenzie.

"We effectively won the changes we wanted on overseas investment, so we now need to let the officials determine the application on the merits of those rules."