(I've lifted this comment by 'turnip28' straight from Frogblog because it is a well presented argument for foreign ownership of farms on New Zealand soil. I hope my 'hat-tip' is enough for turnip!)
The idea that the farm belongs to the farmer is absurd. As long as you have a mortgage with the bank then it belongs to the bank. These days no one pays off their mortgage instead they sell in order to receive some capital gains (Idiot farmers idea profits). Note most farmers don’t understand how to run a business and think the capital gains from selling there business is “profit”. Note profit is what is left over at the end of the year after meeting all your expenses.
Very few NZ dairy farms are going concerns anyway which means the vast majority of them have 0 economic value. The farmer only makes money when he sells the property, any revenue generated via dairying went to service the mortgage and the farm costs. This means there is no loss to NZ from having a foreigner own and the land to having a NZ doing it. Zero dollars from this process is leaving NZ. The money that is leaving NZ is from the interest on the mortgage which is the same in both cases.
2 comments:
In fairness Robert, that is a bit of a generalisation. To say that all farmers are bad business managers is the sort of argument that turns the general population off. Many farmers around Riverton run profitable enterprises, this is seen clearly by those of us who deal with them in business day to day. A famers profit being derived just from capital gain is incorrect - if so then why have so many investors in NZ alone set up syndicates to run dairy farms.
Foreign ownership will detract from the NZ farming scene. Not just profit will leave NZ, but also the ability to control goods produced, how they are made, what goes into them, where they are processed and where they are sold. The concern for me here is the clash of cultures - what us Kiwis think should go into a farm could be entirly different from overseas investors.
What your contributor needs to do is seperate their emotions around farming in NZ from their actual common sense.
SouthernRight
You make very good points. Turnip28 certainly is sweeping in his statements, although there seems to be some value in his contention that farmers (some) look to make their 'profit' at the point where they sell their farm.
I agree entirely with you around your second paragraph. It amuses and frustrates me to see the Government crying 'foul' over what's happening and what might happen with the sale of farm land to foreign interests, when 'greener heads' have been saying this for a very long time. I'm also unimpressed with farmers who replace the word 'sale' with 'investment' when talking about what is being proposed by the likes of 'Bright Dairy' or 'Natural Dairy' or whatever 'don'tspookthehorses' term the foreign buyers might choose in order to screen their true form.
Turnip28, whom I presume to be not from the Left, makes good sense also, where he/she questions 'ownership', when banks are seen to be the real owners. The same must apply to private houses as well. This issue should be of concern to us all. It's something that is of little concern in good times, but can suddenly come into sharp focus when economic times worsen.
Post a Comment