In my last blog post I wrote about the importance of agriculture to our economy. Then I started hearing stories that farm sales were down, especially dairy. Apparently of over 4,000 farms on the market, only around 200 sold last month.
Good news for some of the farmers who want out, because there are foreign investors who want to buy them. One company wants to spend $1.5 Billion dollars buying NZ farms. You would have to wonder if we can’t make a good living out of farming how can other countries do it? If we do sell them, where will the earnings from those farms go? Not into our pockets I would suggest.
China has a problem. They have a large dry land mass and not enough water to grow the crops they need and a huge and growing population. What are they doing about it? They and other countries such as Middle East are buying good arable land wherever they can get it for a good price. For example China is buying farming land in Mozambique, Angola, Malawi, Nigeria and even Zimbabwe. It’s not all bad, they are teaching local farmers better techniques in animal husbandry, improving crop yields etc.
What are the motives of China and Arabic countries in buying this land? They need the food. In Ethiopia, one of the worlds poorest countries, not only are they selling land to foreign countries, they are giving them tax holidays for a number of years, but what is of greater concern is the expectation that most, if not all of the crops will be going back to countries such as China, Saudi Arabia and Kuwait.
I ask myself therefore, again, why can’t we produce high yield crops on our fertile soils and sell it to the countries that need it. Once those countries have bought our land, we won’t be getting it back and I wouldn’t expect us to gain much in GDP from the crops they grow.
As I said in my last blog, the ‘good old days’ were when we were largely an agrarian economy, we had plenty and we also had plenty to export. Now we have fantastic biotechnology and the ability to increase yields, quality and in many cases without using GM technologies.
I would hate to look into our future and see a country that can’t feed itself, that grows crops on farms owned by other countries, go straight offshore to feed them with minimal economic benefit to us. I would welcome someone to explain the logic of this.
We have expertise, maybe we should be assisting some of those countries who are unable to maximise the return on their land, help them thrive and clip the ticket. That would be a win win. While we do that, we also continue to research and improve product, the grasses and other food sources for animal feed etc. We do have some successes such as Fonterra, Livestock Improvements and many other thriving areas of research and results in biotechnology. We should stick with what we are good at and rather than give our farms to the Chinese, Arabs and others who want them, let the Government buy them. They could be run by unemployed people, who would get training on the job and perhaps even interest free loans to purchase some of those plots and use the skills they have obtained to build themselves a healthy asset and income, while increaseing our balance of payments. Is that silly? What’s wrong with my thinking?
In February this year there were around 168,000 people unemployed. Lets put them to work on those farms, teach them a trade, help them make something of themselves and help them earn the money to buy there way in with low interest loans and subsidies. What could we produce with 168,000 people working instead of paying them to do nothing. The single person benefit is around $160. That works out to a wasted loss of around $26,880,000 per annum. I say lets buy those farms and keep them in New Zealand hands.
This Video from TVNZ gives an example of what is happening.
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