The Crafar Farms saga
The Green Party is publicly proclaiming that "highly productive" land in New Zealand should not be sold to foreign buyers. Statements by Green Party leader Russel Norman come hard on the heels of his tussle with Chinese security men on the steps of parliament, and were made in the context of the proposed sale of the "Crafar" dairy farms to the Chinese company "Natural Dairy". It would appear that Norman is particularly concerned by the prospect of Chinese ownership of New Zealand farms, and particularly concerned by the sale of "highly productive" (read "dairy") land.
It is probably fair to say that the Green Party is generally opposed to the sale of New Zealand assets to foreign entities. However the reality is that New Zealand law allows virtually unrestricted foreign investment and acquisition of productive assets. Australian companies have taken advantage of the absence of restrictions to gain dominance of the mass media, banking and retail sectors, plus a large swathe of secondary industry, while United States investors have acquired a dominant position in production forestry and vast tracts of high country farms. Large proportions of New Zealand commercial, industrial, and even residential property are also foreign-owned.
The Chinese are late comers, behind the British, Australians, Americans, Canadians, South Africans and others, looking to acquire their own piece of New Zealand. If the Green Party was proposing to put an end to new foreign acquisitions, and at the same time to force the repatriation of land that is already foreign owned, then the move could be presented as being handed and in the national interest, rather than motivated by anti-Chinese sentiment.
But no party in the present parliament is likely to seriously argue for an end to all foreign investment. The New Zealand economy, already dominated by foreign investors, depends upon the continued flow of foreign capital for its survival. Prime Minister John Key right now has no real alternatives to China as a source of new capital. In the pragmatic tradition of New Zealand governments, it now seems he is prepared to walk away from Australia, the US and Britain in order to pursue the emerging relationship with China. The significance of Key's recent refusal to grant the Australian request for more New Zealand troops in Afghanistan will not be lost on Canberra or Washington. It was, perhaps lost on many of us, because few would have expected that now would be the time, or that John Key would be the man, to lead New Zealand out of the US/Australian orbit and into the Chinese sphere of influence. Perhaps we should have. If we had thought more deeply about matters, we might have realised that New Zealand's "fourth Jewish Prime Minister" might not show the same blind loyalty to the "English speaking nations" as his predecessors. It is still a little early to say with certainty that John Key is in the process of pushing through a historic re-alignment of New Zealand's foreign relations, but the signs are there.
Despite, or perhaps because of that, John Key is now suggesting, along with the Green Party, that dairy farms should be an exception to the rules governing foreign investment. There is no basis in principle for this particular stand, and one can surmise that it is dictated by political expediency.
New Zealanders have long been told that the dairy industry is one of the few in which they can be internationally competitive. If they cannot retain their own dairy industry, then what can they retain? Added to that, it is a Chinese bid for the Crafar dairy farms which has brought the issue to public attention. Over the past half-century, New Zealanders have been taught to distrust China, and while that perception can change, it will not change as quickly as John Key might hope. New Zealand in 2010 is not quite George Orwell's "1984". The public need time to come to accept that the so-called evil empire which supposedly threatened their freedom is now the to be heralded as the salvation of their economy and way of life. So it would be politically convenient for Key if the Chinese bid for the Crafar farms were to go away. That would give him time in which to shift public perceptions in favour of China and away from the idea that dairy farming will be the salvation of New Zealand. And he will need time in which to reconcile dairy farmers themselves to the reality that they are going to lose a part of "their" industry to foreign buyers.
In recent years politicians and the media have obsessed about the importance of dairy farming to the New Zealand economy, in large part because it is one of the few major industries effectively remaining in New Zealand hands. Yet the dairy industry will inevitably go the way of forestry, manufacturing, banking and retail because it has followed the same path to this point. Dairy farmers have failed to provide the capital necessary for expansion of dairy processing capacity in New Zealand. Instead they have used their wealth to bid up the price of dairy land, and to increases the size of their holdings will beyond what can be effectively managed by one individual. Many have gone further, and recklessly speculated in dairy farms off shore. To do this all this they have gone into hock to the banks, and now the banks are calling in the loans. The combination of unaffordable debt and excessively large scale holdings are a standing invitation for foreign a buy-out. The popular anodyne is that "they", meaning foreign buyers, cannot uplift the land and move it off-shore, but that figuratively speaking is what must happen. Dairy farms will go into foreign ownership. New Zealand dairy farmers have been no smarter than the rest of the country. They spent up large, they went into debt, and now the day of reckoning is upon them.
Meanwhile John Key employs empty political rhetoric - such as "New Zealanders should not be tenants in their own land" - in a show of public opposition to the Crafar farms deal. Key knows, if anyone does, that the majority of New Zealanders are already tenants in their own land in one way or another. An increasing number are residential tenants, many are sharemilkers and doomed to remain so, or work for wages in factories, farms and forests owned by others. But it was the Crafars, and not Natural Dairy, who started the process of turning farmer freeholders into farm labourers, and it is New Zealanders, and not foreigners who have recklessly put so much of their country under foreign control.
It is all rather redolent of the John Roughan's infamous "New Zealand Herald" article, in which he declaimed that his forefathers did not come to New Zealand to become "tenants" to Maori landlords. To be fair, Roughan's ancestors may have aspired to be nothing more nor less than freeholders. Yet there is no denying the greed and the class pretensions which drove many Europeans to become large holders in rural and urban property. They aspired to be landlords themselves, and were happy to have Maori, or their fellow Europeans, serve them as tenants, domestic servants and wage labourers. Only now, when their own position is under threat due to their own incompetence and malfeasance, do they hypocritically raise their banners in the name of the liberty, equality and fraternity of New Zealanders.
If the tenant/landlord relationship is an undesirable one (and I tend to agree that it is) then that should apply regardless of whether European or Maori, New Zealander or "foreigner", stand in the position of landlord or tenant. The implication that it is somehow better to be a tenant of a New Zealand than a Chinese landlord, is the conceit of a privileged European elite who are themselves largely responsible for bringing New Zealand to its present state. Too many of them have been ungenerous landlords or incompetent businessmen. The Crafars are not exceptional - they are a good illustration of the rule. Think Feltex, Bank of New Zealand or Fisher and Paykel. Businesses have failed across the board, due to greed, incompetence, recklessness, stupidity and plain criminality. The Chinese could do no worse, and they may even do better.
John Key clearly does not intend to do away with the landlord/tenant relationship altogether. He is no socialist radical, and not even a committed nationalist. He hopes to appease local sentiment, and to persuade people like the Crafars (though not the Crafars in particular) that their positions of unwarranted wealth and privilege will not be abruptly handed over to "foreigners". That will be the end result for many, but it will happen slowly over time if John Key has his way. The ordinary farm workers, farm managers and sharemilkers are already "tenants" of a sort will probably not be concerned over whether their farms are owned by the likes of the Crafars or Natural Dairy. In fact, for many Chinese owners might be the preferred option.
In the final act of this political farce, the Australian-owned mass media networks have weighed in, arguing for no restrictions on foreign ownership at all. For the moment they can live with a Chinese presence, or even Chinese dominance, in the dairy industry. The important thing, from their point of view, is to uphold the principle of foreign ownership. They don't want to go down a track which would force them to accept the legitimacy of Fiji's laws against foreign control of the media. They probably believe that over the long run Australia will remain the dominant force in the New Zealand economy and the most important influence over New Zealand foreign policy. That may be where it ends. John Key's "concerns" will be short lived.
The Green Party policy will gain no traction in parliament, and little with the public. Foreign control will continue apace, and the tide will not turn until the regime faces a radical challenge to the rules of property established by the New Zealand Company and the colonial power from 1840 onwards. Advancing foreign ownership is only a symptom of the disease which is afflicting the New Zealand economy and New Zealand society. The root source of New Zealand's problems is the speculative greed and social irresponsibility of a ruling elite who are culturally European and who are bereft of any sense of duty towards our land or its people.
Preventing foreigners from owning New Zealand farms would do nothing
to change that. Preventing people like the Crafars from ever
getting in the position where, driven by greed and enabled by the banks,
they are able to acquire, and then lose, control over such vast tracts
of New Zealand farmland certainly would.