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Media releases 2006


Brower study claims 'entirely unfounded'
Crown threat to high country life
LINZ legal opinion bewilders high country lessees
Q&A response to Forest & Bird campaign "Fancy a slice of the South Island"
Release the report, Mr Parker
Farmers want to see Armstrong report
People created our superb high country vistas
Tenure review can provide win-win outcomes

Brower study claims 'entirely unfounded'
Released 24 November 2006

A report used by Forest & Bird to argue that the South Island high country is being "given away" and "privatised" by the government has been discredited in a review by two senior Victoria University academics.

Victoria University Professors of Economics Neil Quigley and Lewis Evans say claims made in a report by Dr Ann Lacey Brower are entirely unfounded.

"These result from errors in the interpretation of pastoral lease rights, the tenure review process and data relating to its outcomes," says Dr Quigley.

In February Dr Brower, a visiting Fulbright scholar at Lincoln University, criticised the Crown's role in tenure review, a process which allows farmers to buy freehold title to their South Island high country farms in return for selling to the Crown their rights to land of conservation value.

In her report, she said, "government contractors and government officials are giving away the crown jewels and paying the recipients to take them away."

Forest & Bird then used Brower's conclusions to underpin a major campaign alleging that tenure review was biased in favour of farmers, and that conservation and the public were being short-changed.

Professors Quigley and Evans say Brower's errors include incorrect assumptions about the property transactions which take place during tenure review, an incorrect understanding of the property rights of lessees and the Crown, and a lack of understanding of the nature of a pastoral lease and the value of the lessees interest in it.

They say a bundle of property rights is allocated to holders of perpetually renewable leases and this makes the concept of ownership extremely complex.

"There is no simple match between allocations of property rights [associated with these leases] and the concept of ownership as it used in popular language."

"Brower appears not to understand that the rights of a pastoral lessee are very different from the rights of a person 'renting' property as that term is popularly used."

Quigley and Evans point out that high country farmers hold title to land which has been transferred into private hands by the Crown. The fact that this was done through a perpetually renewable lease rather than through the transfer of  freehold property rights does not change the fact that that properties concerned are now in private hands.

They say Brower is also incorrect to claim that the Crown had retained valuable property rights in pastoral leases.

"The Crown has no rights to do anything with the land except collect rent, and adjudicate on any activities that are not permitted under the lease."

"Unless Brower can show that some lessees have terminated their lease on review and handed use rights back to the Crown, then we have to assign a value of zero to the rights of the lessor aside from the value of the rent."

Quigley and Evans describe as "entirely implausible" Brower's claim that the Crown has gifted valuable property rights to leaseholders during tenure review.

"She completely misinterprets the available data ... and makes a series of claims about the outcome of the process that are entirely erroneous."

"Our analysis ... makes it implausible that the tenure review process has resulted in any substantial over-payment by the Crown."

They say that Brower did not consider the social benefits of land tenure reform, which they believe will be substantial.

Freehold title is better suited than pastoral leases to multiple and alternative uses of land. This is important, say the authors, because there are now other options for the use of this land which weren't envisaged 50 years ago.

As for the land acquired from former lessees for conservation, they say the price paid under tenure review may well be less than what conservationists and others would be prepared to pay to achieve such a substantial increment to the conservation estate.

for more information please contact
Prof Neil Quigley, Tel 04 463 5083, or
High Country Accord Co-chairs: Geoffrey Thomson, Tel 03 351 3555 (ChCh)
or Ben Todhunter, Cleardale Station, Tel 03 302 8233


Crown threat to high country life
by Geoffrey Thomson, co-chair, High Country Accord
Op-ed opinion piece published in The Dominion Post, 9 November 2006

It's not a good time to be a high country farmer.

The Labour-Progressive government has promised the public a network of 22 parks and reserves in the South Island high country. To create them, it has earmarked about 60 percent of the land occupied by the remaining 250 or so farming families with Crown Pastoral Leases.

Officials warn that this will cut a $33 million hole in the country's Merino wool industry, but the Cabinet decides to go ahead anyway.

With farmers slow to enter tenure review, a legal process which gives them freehold title in return for releasing land to the Department of Conservation, the minister of lands says he wants to increase rents to "market levels". He then commissions the independent Armstrong committee to look into the matter.

The Armstrong report finds no evidence to show farmers are paying less than market rents. Indeed, it says some recent rents have been set too high.

A new minister of lands sits on the report for eight months while his officials produce a report of their own. Give them full marks for creativity - they now claim the picture postcard views on high country farms belong to the Crown and that leaseholders should have been paying rent for them since 1979.

If this happens, Merino farming on most properties will definitely no longer be viable.

In the last couple of years, a growing number of lessees have decided to go into tenure review. The main drivers have been uncertainty about the government's intentions and the need to find sources of income other than pastoral farming. Potential businesses like adventure tourism usually require freehold title.

But it is not easy for a family to negotiate its future with Crown agents, especially when local iwi, conservation and outdoor recreation interests are all allowed a say. Many high country families are feeling the stress.

Forest & Bird hasn't helped, with media releases which have become increasingly strident.

Its accusations that freeholded vistas are destined to be subdivided for condominiums have become a real possibility in the public mind. Never mind that most district councils have tough restrictions on high country subdivisions. Just ask Shania Twain - and she was just building a homestead, not subdividing for condos.

Worst of all, Forest & Bird has been creating a perception that the public is somehow being ripped off. There's a clear implication that individual farming families are somehow the guilty parties.

It has all become very unfair and unpleasant. But stepping out of tenure review is not an option for many farmers.

If they don't get freehold title and rents go up, their farms will become uneconomic. Their equity will drop and they may be unable to afford a freehold farm elsewhere.

On the other hand, if they freehold they usually lose most of their summer grazing land to the Department of Conservation. To provide stock with feed in summer they may then need to irrigate their lower country, if water supply and terrain permit. Even then, because of a short growing season, irrigation may not pay.

The best option on such properties would be to put a legally-binding covenant on the freehold title to ensure the tussocks in the summer country continue to be grazed sustainably. But DoC and Forest & Bird usually want nothing short of full Crown ownership.

This is not logical. Most high country farmers are good stewards of the land. Indeed, scientific  evidence confirms that light grazing of high altitude tussock country helps control weeds and improves biodiversity. The high country's now in better shape than it has been for 100 years.

In wasn't always like this. After the Second World War, many properties were over-run with rabbits and soil erosion was becoming a big problem.

The problem lay with the Crown leases of the time. Because lessees had no right of renewal they hadn't reinvested in their properties. Nor had the Crown as landlord.

In order to give high country farmers every incentive to protect soil and water and to increase production, Crown Pastoral Leases were created in 1948. They gave lessees perpetual right of renewal, ownership of all their improvements to the land, and rights of exclusive occupancy.

It was an incredibly successful move. Farmers invested heavily, restoring productivity and health to the high country.

So why are the government and Forest & Bird so keen to get farmers off the land? Two-thirds of the high country is already in DoC estate, how much more do they need?

Sure, public access is an issue in some areas, but this is already being dealt with through negotiation. It doesn't require the guts to be ripped out of high country farming.

Perhaps the real reasons have nothing to do with access and biodiversity protection.

After all, farmers have been concerned about tenure review for years. But the subject attracted little public interest until Forest & Bird focussed on some recent settlements involving iconic sheep stations. They said the Crown was paying farmers big sums for land it already owned.

The claim is totally unfounded. As the Armstrong report has pointed out, tenure review settlements are fair. Farmers start  tenure review with a larger asset value than the Crown so logically they should complete it in that same relative financial position.

But by ignoring these facts and playing to an old prejudice that high country farmers are unfairly privileged people, Forest & Bird view has finally managed to attract the urban media to take an interest in what has been happening in the high country.

For high country farmers, most of whom have a deep connection with the beautiful and challenging land which makes up the high country, the health of their tussock country is a matter of pride. It's a first-class example of sustainable land management that could be a role model for land users elsewhere.

But if the government, egged on by Forest & Bird, sticks to its present path, its future won't be determined by the principles of sustainable land management. It will be determined by the unfounded belief that biodiversity protection is possible only under state ownership, and the doctrine that sustainable production has no place in our wild lands.

If that occurs, the chances are that many third and fourth generation families will no longer be able to farm the high country.

LINZ legal opinion bewilders high country lessees
Released 13 October 2006

The government's release today of the Armstrong report which it commissioned early in 2005 vindicates the long-held view of high country farmers that they have been paying market rentals for their pastoral leasehold lands, says Geoffrey Thomson, co-chair of the High Country Accord.

"We welcome their expert finding that recent rents have been set too high and that settlements under the land tenure review process have been fair."

However, he says lessees are bewildered by the government's proposal to reject these findings in favour of a proposal to increase rents on their farms.

"The Armstrong report concluded that there is no basis for claims that existing or proposed rentals are being set at a discount to the market. In fact, it concluded that most recently reviewed rentals are in excess of fair market rentals for pastoral leases," Mr Thomson says.

"In response to the report the government has commissioned a Crown Law Office opinion which says the Armstrong report is wrong and which appears to say that rentals for high country leases have been incorrectly calculated since 1979.

"The High Country Accord is bewildered by this about-turn by the government and intends to obtain its own legal opinion of the law relating to the setting of pastoral leasehold rentals.

"We are at a loss to understand how the government can refute the detailed information and conclusions of the report, as well as the practice of crown valuers since 1979.

"We hope to resolve this unexpected response by negotiation, but if necessary we should look to the courts to protect the rights and interests of lessees."

Q&A response to Forest & Bird campaign "Fancy a slice of the South Island"
Released 21 September 2006

Do we want a tenure review moratorium?

No. Tenure review is currently being reviewed by the Parliamentary Commissioner for the Environment. This independent review should be completed.

Also, farmers who are negotiating with the Crown need to be able to complete the process if they wish to. It's highly stressful and has cost them a fortune in legal fees.

Are we happy with the LTR process?

No, because the concept of drawing lines through the high country saying one side is conservation and the other side is farming is fundamentally flawed. Biodiversity is enhanced by judicious grazing of tussock country. Most high country farms also need access to this country in the summer if they are to remain viable.

For some farmers, tenure review is not an option because it would put them out of business. Indeed some farmers have found the process so intimidating they have sold their farm rather than continue.

What would be better?

Whole farm covenants to protect and enhance existing values, and to provide accessways where these are absent. This would be win-win-win for the farmer, the taxpayer and the environment.

At present land prices, completing tenure review will cost the Crown about $200 million. It would get far bigger bangs for its conservation bucks elsewhere.

What do we think of the Forest & Bird campaign?

We don't want to have a big battle with Forest & Bird because many high country farmers have good personal relationships with local F&B members.

That said, F&B seems to have huge difficulty with farmers being guardians of the landscape, even though the high country is in really good heart because farmers are managing it well.
F&B want merinos and farmers out, and for the Crown to take over the one-third of the high country it doesn't already own. It's based on an ideology that only the state can manage the environment.

What about the 50/50 split?

We're not sure where F&B got 50/50 from. In fact, the government is actually planning for 60% of pastoral lease land to go to the Crown, through a mix of tenure review settlements and whole property purchases. If you take settlements and purchases into account the split to date is almost exactly 50/50.

F&B also seems to think the 50/50 split should apply to every individual farm. This would be silly - some farms have lots of land of high conservation value, some have none.

We reiterate the point made earlier that splitting the high country into conservation and production zones is the wrong way to go.

What about farmers subdividing iconic landscapes after tenure review?

Some tenure review settlements have included covenants protecting landscapes from development. Normally, however, iconic landscapes are protected from subdivision and unsightly development by district plans under the Resource Management Act.

Most high country local bodies have very strict controls which apply to both freehold and leasehold land. Just ask Shania Twain.

There is already a lot of freehold land around Lakes Pukaki and Tekapo. In some cases it has been in freehold title a very long time. Also all the walkways around Tekapo are on freehold land - private ownership does not necessarily mean the public is excluded.

Excessive payments to farmers?

We are not sure why the payments to farmers are being targeted by Forest & Bird. The implication seems to be that the payments are wrong because a lot of money is involved, or that farmers are somehow getting special treatment from the government.

This is not true. Payments are made on the basis of independent valuations which are in turn based on what people are willing to pay for freehold and leasehold land in the high country.

Typically, land buyers pay only about 20 per cent more for freehold title than they do for a Crown pastoral lease. This 20 per cent is the Crown's share of the value of the property. If the Crown wants to buy the lease back, it needs to pay for the 80 per cent the lessee owns.

In the case of Birchwood Station, which the Crown bought outright, it valued the lessee's interest at 94 per cent and its own interest at 6 per cent.

Farmers have the full rights to occupy their land, farm it and exclude trespassers - these are very substantial ownership rights. We are not talking about rental agreements for state houses. The leases are very carefully designed to give lessees ownership of the improvements on their land so they have every incentive to increase productivity while protecting the environment.

How will this issue be settled?

It would be a great help if lands minister David Parker released the Armstrong report which he has been sitting on since February.

The report, by senior valuers Donn Armstrong, Rodney Jefferies and Bob Engelbrecht was due for release in June, then rescheduled for release in July. Their brief was to determine whether pastoral lease rental valuations, and the methods used for valuing lessor and lessee interests in tenure review, were consistent with the law and fair to both lessees and the Crown. Last month Mr Parker told parliament he hoped to release the report in September.

We don't know what's in the report, but it would be good to be debating these issues on the basis of expert opinion rather than emotion and hype.

It would also be good to sit down with Forest & Bird and find out where they are coming from. Campaigns like this can be very damaging at a personal level, which is pointless if it's simply because they have the wrong end of the stick.

Ben Todhunter
Geoffrey Thomson

Release the report, Mr Parker
Released 19 September 2006

The High Country Accord wants lands minister David Parker to urgently release an independent report which it hopes will settle an increasingly bitter dispute between high country farmers and environmental activists.

At issue are sums paid by the Crown to high country farmers to acquire land of high conservation value as part of a process known as tenure review.

Accord co-chair Ben Todhunter says he strongly rejects claims by Dr Anne Brower of Lincoln University and Forest & Bird's Eugenie Sage that the government is paying farmers excessive sums for land they say the Crown already owns.

"From a perspective of land ownership law and valuation law Dr Brower and Ms Sage are wrong. The land is permanently in the hands of the lessees, who largely control what happens on their farms," he says.

"We are not talking about rental agreements for state houses. The leases are very carefully designed to give lessees ownership of the improvements on their land so they have every incentive to increase productivity while protecting the environment.

"The value put on these ownership rights is determined by what people are willing to pay for them. Typically, land buyers pay only about 20 per cent more for freehold title than they do for a Crown pastoral lease.

"This 20 per cent is the Crown's share of the value of the property. If the Crown wants to buy the lease back, it needs to pay for the 80 per cent the lessee owns.

"In the case of Birchwood Station, which the Crown bought outright, it valued the lessee's interest at 94 per cent and its own interest at 6 per cent."

Mr Todhunter says valuing the interests of the lessor and lessee is something of a science, and it is of concern to him that minister Parker has been sitting on an expert report on the topic since February.

"We don't know what's in the report, but if it is released at least we will be dealing with expert opinion rather than emotion and hype," he says.

The report, by senior valuers Donn Armstrong, Rodney Jefferies and Bob Engelbrecht was due for release in June. Their brief was to determine whether pastoral lease rental valuations, and the methods used for valuing lessor and lessee interests in tenure review, were consistent with the law and fair to both lessees and the Crown.

Last month Mr Parker told parliament he hoped to release the report in September.

Yesterday, Dr Brower released the figures for individual farm pay-outs she had obtained from Land Information New Zealand (LINZ), the government department which manages land tenure review.

Mr Todhunter says it is hard enough for individual families to have to negotiate their farming futures in the public spotlight, without being falsely accused of ripping off the Crown.

"Given the choice, most farmers would be happy to buy the Crown out of its interest in their farm, and enter into a whole-farm covenant to ensure environmental, landscape, historical and tangata whenua values are maintained."

He says the release to Dr Brower by LINZ of individual farm pay-out figures is a breach of the law and a breach of good faith.

"While it is in the public interest to know how much the government is spending on tenure review settlements, farmers have been told the details of their individual settlements are confidential. This is designed to protect the negotiating position of the Crown as much as it is to protect the privacy of individual farming families."

Farmers want to see Armstrong report
Released 25 August 2006

High Country farmers want land information minister David Parker to release as soon as possible a report into methods used to value high country Crown leasehold farms.

Rents paid by high country farmers are based on the valuations which are conducted every 11 years.

A meeting of 140 high country farmers in Omarama on Wednesday expressed its concern that the minister had not kept his promise to release, by the end of June, the report drafted earlier this year by senior valuers Donn Armstrong, Rodney Jefferies and Bob Engelbrecht.

Co-chairmen of the High Country Accord, Ben Todhunter and Geoffrey Thomson said they were pleased to hear the advice given by Mr Parker to Parliament yesterday that he hopes to release the report in September.

"We look forward to the realisation of that hope," they said. "We also welcome Mr Parker's assurance that the focus of the Armstrong report is on the correct application of existing legislation."

In a question in parliament yesterday, National Party agriculture spokesperson David Carter asked Mr Parker about the delays in the release of the report which, after missing the initial June deadline, was then scheduled for release at the end of July.

Mr Parker said the delays had been caused by his desire to seek legal advice to ensure that the provisions of the Land Act and the Crown Pastoral Land Act were correctly applied.

In a speech to Federated Farmers on 9 June, Mr Parker said the Armstrong report had been commissioned to find out whether the Crown was obtaining a fair financial return on its interest in high country land both in terms of rentals being paid and during tenure review.

"We want to know whether pastoral lease rental valuations are being established in accordance with the legislation. In other words, is the Crown receiving, and lessees paying, the correct amount of rent for the land being leased?," he said.

"We also want to find out whether the current methodology used for valuing lessor and lessee interests in tenure review is consistent with the law and is fair to both lessees and the Crown. It is particularly important to have clarity on the rental issue because the government is willing for the Crown to be a high country lessor indefinitely which is obviously consistent with tenure review being voluntary."

People created our superb high country vistas

High Country Accord response to Forest & Bird's Eugenie Sage
Opinion piece published in the Timaru Herald 26 August 2006

High Country Accord co-chair Geoffrey Thomson argues that farmers should continue to be guardians of the tussock grasslands of the South Island

The musterer and his Merino flock in the wind-blown tussock, the powder blue glacial lake to one side and the Southern Alps in the background.

It's been the backdrop for countless television documentaries and photo-shoots, not to mention Lord of the Rings. For many of us it resonates as one of those things that make us New Zealanders.

Such a landscape is the unlikely scene for a clash of ideologies, with farmers on one side, and conservation groups on the other.

The theme of the fight? Whether private land owners or the Crown is best equipped to sustainably manage the high country tussocklands along the eastern flanks of the Southern Alps.

The focus of the fight? The land tenure review process set up by the government to extricate itself from 'uneconomic' Crown Pastoral Leases which give farmers perpetual grazing rights to 2.2 million hectares of the high country.

Tenure review allows farmers to negotiate freehold title to their farming land in return for handing over land with 'significant inherent values' to the Department of Conservation (DoC).

Since 1998, 46 out of 300 farmer lessees have settled with the Crown, resulting in 162,000 hectares of leasehold land being freeholded and about 117,500 ha going to DoC. In addition, about 45,500 ha has been bought from lessees and added to the DoC estate - making an almost equal split between the land kept in farming and that destined for conservation.

The cost to the Crown? Around $80 million, plus the cost of maintaining the more than 1 million hectares it now owns in the high country.

However, Forest & Bird's Eugenie Sage is far from happy. She says the high country is being given away in "the biggest wave of privatisation ... since Roger Douglas". She fears that iconic landscapes will pass into private hands to become "McMansion subdivision sprawls".

Clearly Sage is passionate about the high country, but her arguments are not based on fact.

The farms in question are already in private hands, thanks to leases which give farmers occupation and grazing rights in perpetuity. Because they also own the improvements on their land, each farmer's financial interest is typically around 80 percent of their farm's capital value.

As for subdivisions, these are dealt with under the Resource Management Act through district plans. As Shania Twain learned when she applied to build a new homestead on Motatapu Station, most district plans have strict rules to protect iconic high country landscapes.

Yet Sage's anger about tenure review is not unusual among environmentalists. After all, even with a 50/50 split of land between farming and conservation, a lot of tussock land is lost to the conservation estate forever.

Looking at the other side of the coin, many farmers feel much the same way. With a 50/50 split, they see an awful lot of sustainably managed rangeland being lost to farming forever.

So is there a better way?

Few New Zealanders realise that until the first Maori arrived about 800 years ago, most of the high country was covered in shrublands and forest. The tussock grasslands we know and love are the largely the result of Maori and early European fires, maintained by sheep grazing.

Take away the sheep and much of the land will revert to trees and woody plants. But because native trees are long gone, the woody plants which emerge will be those controlled by farmers and their flocks - broom, gorse, wilding pines and other weed species.

Most farmers take great pride in their range management systems, in which weed control and the maintenance of good ground cover play important parts. These systems are based on experience, the results of scientific research and lessons learned from the mistakes of the past.

So much so, the high country is probably in better shape today than it has been in more than a century. Indeed, farmers find it a bitter irony that the land most sought after by DoC, is the land which farmers have most effectively stewarded through 150 years of farming.

Canterbury University conservation biologist David Norton blames the discord on the philosophy of drawing lines on the map, with one side reserved for farming and the other for conservation.

He says the interests of biodiversity would be best served by leaving most high country farms in private hands, but subject to whole-farm management covenants. Limited conservation funds could then be deployed to the area of greatest conservation need -- saving threatened species like the kiwi and mohua (yellow head).

"Land tenure in itself is irrelevant to biodiversity conservation - what is far more important to the maintenance of biodiversity is the way the land is managed. There is no reason why covenanted private land could not be included as part of a high country park," Professor Norton says.

The High Country Accord shares with Forest & Bird an interest in enhancing biodiversity and sustainability in the high country. We would welcome discussing this with them in the context of private land ownership and management.

This may be a novel approach for New Zealand, but it is worth exploring. With our shared love for the high country, it's time we found some common ground.

Tenure review can provide win-win outcomes
Released 15 August 2006

The High Country Accord says high country tenure review has the potential to be a winner for farmers, conservationists and the public at large.

But co-chair Ben Todhunter says the group, which promotes sustainability in the high country, is concerned that some academics and conservationists are lobbying for changes to the review process from an ideological perspective.

"This makes it very hard for the individual farming families who are negotiating with the Crown. For them, the stakes are highly personal, as is their relationship with the land they farm," he says.

"The land lobbyists want transferred back to the Crown has been farmed for more than 150 years. The fact that most conservation and landscape values are still intact after all this time means farmers must be doing something right," he says.

"There is also a wilful disregard among some lobbyists of the legal position of high country leases. The fact is that the land is permanently in private hands, unless the farmer wants to sell or negotiate a tenure review settlement with the Crown."

Mr Todhunter says that if everyone accepted that high country farmers were capable of good stewardship of their land, and that land they farm is 'theirs' then the various parties would stop talking past each other.

"Tenure review has a potential to provide win-win for everyone if they approach it with an open mind. Important ecological areas and landscapes can be preserved or enhanced, Maori can have assured access to wahi tapu, trampers can have better access to the mountains, and farmers can get the government out of their hair and get on with their businesses."
 
He says the Accord asked the Parliamentary Commissioner for the Environment to look at the tenure review process because of its concerns that some settlement proposals were not sustainable.

"Having done so, we are taken aback by the submissions to the commissioner from Environment Canterbury and the Canterbury Aoraki Conservation Board calling for tenure review to be halted."

He says farmers are concerned at the sustainability of no input land retired from farming, pointing to latest research which confirms that some short and tall tussock grasslands will degrade without fertiliser and/or judicious grazing.
 
"We are also concerned at the sustainability of high country properties where settlement proposals involve the removal of summer grazing country. High country farms normally need a balance of summer and winter country to be viable."

For their part, he says E-Can and the Board seem motivated by a concern that the proposed freeholding of 5800 ha of Richmond Station on the Lake Tekapo shoreline will lead to life-style block subdivision.

"Many will agree that this is an outstanding natural landscape, but this is not an argument for preventing farmers from living in it as they have for 150 years. Their flocks are part of a high country farming culture which is part of what makes us all Kiwi," says Mr Todhunter.
 
"If subdivision is seen as bad thing, the place to deal with that is under the district plan, not as part of the tenure review process. The public can have their say when district plans are reviewed and when they elect local body councillors."

Mr Todhunter says he hopes the Parliamentary Commissioner for the Environment's report due later this year, will help build public understanding of the tenure review process and of sustainability issues in the high country.

[ends]

For more information, please contact:
Ben Todhunter, Tel 03 302 8233