More sales of Landcorp farms possible, says English
Finance Minister Bill English will not rule out the state farming company Landcorp having to sell more farms than usual to ensure it is not too loaded with debt.
But Labour leader Andrew Little warned that could see large sales of productive farm land end up in foreign hands.
Mr English also said all stateowned enterprises (SOEs) should be looking at whether they had assets not required for their businesses.
“We don’t want them coming to the Crown asking for more capital. We expect them to be maximising the capital they’ve got,” he said yesterday.
Landcorp, the former Department of Lands and Survey, owns 158,000ha of farmland in New Zealand and manages or leases 226,000ha more.
It runs 1.6 million stock units (sheep, beef, deer and dairy) on 137 properties and has a staff of about 700.
Mr English and SOE Minister Todd McClay have expressed concern about its debt gearing in the wake of a slump in milk prices and the financial disasters of state-owned Solid Energy after a slump in coal prices.
Landcorp also had contractual obligations from a deal struck in 2004 under the Wairakei Estates partnership to continue conversions from forestry land to dairy.
Mr English said Landcorp, like any farmer, was in the middle of redoing its budget on the back of a new forecast payout but wasn’t asking the Government for more capital.
The company has assets valued at $1.6 billion but its half-yearly results in January recorded a net operating profit of just $1 million on a forecast $4.40 a kg of milk solids for 2014-15.
But prices have slumped further since then and Fonterra this month cut its farmgate price to $3.85 from a previous forecast of $5.25.
Asked if he would rule out partial privatisation, Mr English said: “No, we can’t because depending on their issues, if they have to get capital, they will have to sell down some land.”
Mr Little said any sales of Landcorp farms were likely to go to foreign investors sending the returns of more of the productive economy offshore.