Pastoral conflict
December 1, 2006
TIM CRONSHAW talks to a high-country farmer about how tenure review would affect the running of his 10,200ha Mid-Canterbury station.
Chas Todhunter peers up at the rising back country of Glenfalloch Station and scratches his head. Around him is a small media posse transported to the high country by farmers who want to put forward their case about the tenure-review process.
The sheep and beef farmer is asked how much of the 10,200-hectare Mid-Canterbury station the Government would like to add to New Zealand's conservation estate.
"DOC (the Department of Conservation) is interested in about 90 per cent," he replies ruefully. "It's probably more like 95% in conservation values, and they want about 90%."
Such a conclusion would change Todhunter and his wife, Dietlind, from high-country farmers to low-country farmers. There would no doubt be a handy cash settlement, but it would be difficult to run the farm on the few flats and fans deemed fit for freeholding.
The couple would become more reliant on their tourism operations of heliskiing and on-farm accommodation with conference facilities and Dietlind's off-farm job.
"In the past DOC was mainly interested in the higher-altitude land," says Todhunter. "But they are increasingly interested in the lower land, and that is where conflict arises with farmers because that is the land with more agricultural potential."
The loss of the tussock country in the steep faces rising to more than 2000 metres would still strike at the heart of a farming programme that relies on this land for the early spring grazing of wethers and some cattle and autumn grazing for most of the stock.
The tone of the tenure-review debate rose in pitch last week when the farmer-run High Country Accord unveiled an independent report. This report poured cold water on an earlier paper by Dr Ann Lacey Brower.
Brower, a visiting Fulbright scholar at Lincoln University, criticised the Crown's role in the process, which allowed farmers freehold title to some of their farm in return for selling their rights to land of conservation value.
But her claims that Government officials were not only giving away the crown jewels but paying farmers to take them away were described as unfounded by Victoria University economics professors Dr Neil Quigley and Lewis Evans. By their estimate, farmers who have settled already have paid about double the value of leasehold rights for freeholded land.
Quigley says it is a shame that valuation literature about property transactions was not accessed during the writing of the Brower report.
The author fails to grasp the perpetuity nature of the pastoral leases, which are nothing like the conditions of renting a house, or understand that freeholded rights are more expensive than the leasehold right, he says.
"The lessees are paying more for their freehold land than the Crown is paying for the leasehold land. If they didn't get the freehold rights, they would be paid more in cash, and that's what Dr Brower doesn't seem to understand."
Brower says she welcomes all criticism. "We disagree about some fundamental principles of economics. They argue that the option to develop has no value to the Crown, therefore, it has no value. I argue that the option to develop freeholded land has great value for the new owners.
"If their vision of economics was correct, then Trade Me would not exist, because buyers and sellers place different values on things exchanged. That's why things get bought and sold."
Brower says if the authors had asked for the correct data, they would have concluded that the Crown has overpaid farmers 30% since tenure review began in 1992.
"I stand by my argument that the Crown has privatised the development rights to the most developable land in the high country in exchange for grazing rights for the least grazable land. Therefore, it's surprising for the Government to lose money on the deal."
She says individual prices released after her report confirm her argument and reject farmers' theory that the Crown's interest is worth little.
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High Country Accord co-chairman Geoffrey Thomson says there continues to be a misunderstanding of the enormous value held by farmers in improvements made to the land.
The report was released to correct what farmers believed was a misunderstanding by Brower of what a pastoral lease represents.
"Farmers have built up the assets in the land, and under tenure review, the Crown has to buy that back from the lessee." He says farmers are still concerned with general conclusions that lessees are benefiting hugely from the tenure review, and that the Crown was giving away the crown jewels. The often 10-year process before a review is completed is stressful for farmers.
"The view that farmers are getting rich out of this is totally inaccurate," says Ben Todhunter, cousin of Chas and co-chairman of the High Country Accord.
The cost of the study was not disclosed by the accord, but more money is likely to be spent as it seeks legal advice soon on a course of action to be taken for the Government's plan to increase high-country leasehold rentals and charge for views and landscape in land valuations.
In Glenorchy, at the head of Lake Wakatipu, Kate Scott is a fourth-generation runholder at Rees Valley Station. She says the tenure-review process sounds like a win-win for farmers, but many farmers have entered it with a heavy heart because it means an end to their way of life.
"We think we do a good job and don't require a bureaucracy to maintain that. We would like the property to be mostly intact. There are some bits at the top end that would be reasonable for the Crown to have.
"We would like to covenant the whole place with the QEII Trust. We realise the high country is special for the nation. We are quite willing to accept that we should not freehold the lot and do with it what we want."
Scott signed up four years ago for a tenure review, but the "difficult" case has been put on hold for a year. She says farmers feel like they are being pressured to sign.
Glenfalloch has not been a station for the fainthearted. About 110ha of the station is on good fans accessible by tractors, and 70ha in intermediate semi-tussock country is used for twin-lambing and can be direct-drilled.
Another 450ha is north-facing, moderately steep country that can be topdressed. About 2000ha are winter country for the wethers and provide autumn grazing for the ewes.
The rest, more than 7000ha, is fit only for summer grazing, and rises to Smite Peak at more than 2000m.
The station has been in the possession of the Todhunter family since Chas's grandfather took over a run of mostly brown-top faces in the late 1930s. Young stock had to be shifted each year to nearby Cleardale Station in a family partnership because Glenfalloch could not support it.
Previous owners had walked off the property, and the lease was left vacant from 1936 to 1939 after it had been overstocked at 10,000 sheep and run down because of rabbits.
A pastoral lease obtained in the 1970s gave the Todhunters a secure tenure, and fencing and fertiliser improvements were made.
Today, the couple run about 3000 perendale ewes, 2000 merino wethers and 200 mixed-age cows on the station.
After seven years of hard work, the Todhunters have greatly improved the farm's production, with lambing at 110 per cent to 120% and calving at 90%.
Chas Todhunter says that whoever runs Glenfalloch will have to work continuously to prevent rapid weed infestation.
"We have an invisible weed issue. We kill the weeds, but the seeds are still there. It's very difficult to keep this place clean, particularly of gorse and broom.
"We muster the tussock country six to 10 times a year, and I drive through it 15 times a year. If I see a bush, I will get out and nab it, but if a Crown operator from Fairlie was here, he would probably see it only once a year."
University of Canterbury ecologist Professor David Norton has serious misgivings about drawing a line and calling the land above it high in conservation value and that below it low in conservation value. He says there are models available other than the current emphasis on the Crown management of land with important ecological value.
A combination of property management, including allowing farmers grazing and semi-grazing on some land, and covenanting or Department of Conservation control of other areas might be more appropriate for a station such as Glenfalloch, he says.
The Royal Forest and Bird Protection Society's South Island co-ordinator, Eugenie Sage, says an extensive network of parks and reserves is needed to protect the high country's native habitats and landscapes, and tenure review is not delivering.
"On some properties, tenure review has had reasonable results for conservation and public recreation. On many others, such as Richmond, Kaiwarua, Scotsburn, Otamatapaio and Ben Ohau in Canterbury and Raglan in Marlborough significant areas of tussock grasslands, shrublands and landscape features which deserve protection have or are being freeholded."
More intensive land development which can occur after freeholding is causing big changes to the landscape and the loss of native vegetation and habitat, she says.
Changes to the handling of tenure review and pastoral lease management are needed to alter the 60:40 split between freehold and conservation land and achieve ecologically sustainable land management. She says the Quigley report overstates leaseholders' rights and understates those of the Crown.
Todhunter says he is taking a "see what happens" approach with Glenfalloch's review. A good outcome would be to retain some of the summer grazing land to run a reasonable farming operation and tourist business and to freehold as much of the land as they can.
"At the end of the day, we will have a pastoral lease. It will cost us a lot of pain and headaches, but I don't see that there is a huge amount to lose. We will enter the process and see where it takes us."
About 10% of Glenfalloch's income comes from recreational visitors, who either go heliskiing or stay in accommodation that looks out to the Rakaia River.
Todhunter's main worry is that if the couple continue with a leasehold relationship, they may end up being unable to run the station if the rent is too high.
He says this would make Glenfalloch uneconomic, and they would have to sell the farm and the tourism operation run by Dietlind.
"We haven't got massive opportunities from the change of tenure. My wife was concerned with the security of the pastoral lease, and my lawyer laughed at her. But now I can see her concerns. You are not getting kicked off the land, but being rented off is the same."
