May 24, 2010

New Zealand sees less optimism in agricultural sector

With China at the forefront of purchasing New Zealand's Crafar farms, local analysts are now underestimating the value and possible growth in the country's agriculture sector.

Some New Zealanders are underestimating the value and possible growth in the local agriculture sector which is why Chinese investors seem to be at the forefront to purchase Crafar farms, Prime Minister John Key says.

Sixteen North Island farms owned by the Crafar family, and reputed to be worth US$100 million, have been in receivership since October. Real estate firm Bayleys has been appointed by receivers KordaMentha to sell the farms, ranging 128-1750 hectares in size. They have received a lot of interest from Asia, including Chinese investor UBNZ Funds Management.

Making capital available locally was the answer to avoiding overseas buy-up of New Zealand land and assets, not regulation, he said. The government believed in the value of New Zealand's agriculture sector and growth in the associated markets.

Agriculture Minister David Carter said the sale to the Chinese firm was "unlikely to go through." Carter has said there was a process to go through with the Overseas Investment Office but he believed it was unlikely the farms would be sold to the Chinese bidder.