Sunday, July 11, 2010

Its just a farm? Sorry – wrong.

The PM recently stated that while he was not xenophobic about China -  and in light of his recent efforts to build relationships that has to be seen as true – he couldn’t see the point in foreign ownership of farms….. “it’s just a farm”

….. that such ownership didn’t anything much for jobs or the areas in which N.Z.s future lies. This kind of understanding is a worry – especially given that he is articulate and readily grabs the sympathy of already suspicious New Zealanders….

  1. When foreigners invest, New Zealand exports risk to them. It relieves the N.Z. economy of risk. Foreign shareholders – not N.Z. investors – have born the bulk of the risk and cost caused by Telecom’s recent woes.
  2. New Zealand needs capital – especially in agriculture and especially in dairying. The level of debt in dairy is high, costly and generates large amounts of risk. Foreign equity would help greatly.
  3. The much beloved Fonterra still has a fragile capital structure, it needs farmer support, it needs farmers ready to invest in it, sell to it and back with strong enterprises.
  4. New Zealand may be underfunding its R&D efforts in agriculture. When N.Z. farmers and companies they supply are saddled with debt their ability to invest is limited.
  5. The agricultural inputs industry (fertiliser etc) employs thousands. It is tough to provide jobs if debt ridden farmers cannot afford to buy inputs.
  6. Foreign experience brings new ideas, experience and innovation. To think we don’t need it is simply arrogant and incorrect…. N.Z. of all isolated places needs it badly.

Lets get the thinking on this right at long last…..   oh and

Postscript…. since I started this note 8 hours the Chinese Govt have, in China, approached Mr Key suggesting a growth and production partnership in agriculture to benefit both countries.

Somebody thinks this stuff involves more than “just a farm”.

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