22 December 2010
Natural Dairy CraFarm bid at a dead-end?
Federated Farmers wonders if Natural Dairy (NZ) Holdings bid to secure the 16 former Crafar Farms is at a dead-end, with Ministers, the Hon Maurice Williamson and Hon Kate Wilkinson, backing an Overseas Investment Office (OIO) recommendation to decline the application.
"Some very colourful personalities have clouded what ought to have been a straight forward exercise," says Don Nicolson, Federated Farmers President.
"We must respect that Natural Dairy may have legal options open to it, not to mention the status of the four farms previously purchased by UBNZ.
"At times a tragi-comedy, at least we'll seemingly be able to start the slate clean once these legal hoops have been cleared. Federated Farmers believes open market forces must then apply.
"We hope KordaMentha will be receptive to people wishing to acquire individual farms instead of all 16.
"I must say that some commentators have become so fixated with the CraFarms they've taken on a life of their own, as a supposed rural market barometer.
"Since Natural Dairy announced its plans to buy the former CraFarms in March, there have been around 88 dairy farms sold throughout New Zealand.
"The rural farm market is in fact trade exposed, unlike a residential sector underpinned by Government spending and welfare programmes.
"By comparison, 14 dairy farms sold in the three-months to November 2010 and that was two-thirds less than the number of dairy farms sold in November 2008. This tells me the market is doing its job of self-correction.
"It's not good or bad, it's just the market doing what a functioning market does.
"With Natural Dairy, I must say that Federated Farmers was concerned at the unnatural number of board departures in recent months.
"For a company with such a healthy name, 'health reasons' have been cited for three departures, including the former chairman and company secretary. Only two weeks ago two more directors went, this time after being pushed but it included the vice-chairman.
"It doesn't instil much confidence in the board and you have to wonder if the bid is at a dead-end," Mr Nicolson concluded.