An application for a Swiss company to buy an Otago sheep farm to convert to forestry has been declined, making it one of the first to be made under updated legislation.
The Overseas Investment Office declined a consent for a Swiss company Corisol New Zealand to convert a sheep farm on rolling hill country in Otago to a 473ha production pine forest by the end of next year.
Corisol claimed the investment would benefit New Zealand by assisting it in meeting its nationally determined contribution to climate change under the Paris Agreement, more job opportunities, increased export receipts, advancing significant government policy, increased biodiversity, and increased public access.
The consent was declined as the decision-makers, Land Information Minister Damien O’Connor and Finance Associate Minister Barbara Edmonds, were not satisfied the likely benefit was proportionate to the sensitivity of the land and the nature of the overseas investment.
Land Information New Zealand considered the investment would benefit the country, but it was unclear if it was enough to meet the benefit-to-New Zealand test, the decision said.
The application was one of the first made under the benefit test for the conversion of farm land to forestry since the Overseas Investment Act was changed in August last year.
The location of the Otago farm was redacted from the decision but the distances of the farm from potential markets remained: 46km from Pan Pac Pacific in Milton and 51km from both Fonterra Stirling in Kaitangata and Odlins wood processing in Mosgiel.
The farm runs more than 3800 Perendale-cross ewes, about 1100 hoggets and includes 80ha of pine forest.
The decision states Corisol New Zealand owned more than 20,000ha of land in New Zealand, predominantly used for forestry in Otago, Canterbury and Northland.
Since 2019, Corisol New Zealand had made five successful applications to acquire about 2240ha of land in Otago through the special forestry test, the decision states.
Federated Farmers Otago meat and wool chairman Logan Wallace, of Waipahi, said Federated Farmers Otago felt for the farm owner who had the sale of their property fall through because of the decision.
"We feel for that farming family but we are happy a higher bar for overseas conversion of New Zealand farm land is going to lead to better long-term outcomes for our communities."
A report commissioned by Beef + Lamb New Zealand on the land-use change from pastoral farming to large-scale forestry was released last month.
It shows more than 63,000ha of land was sold in 2021, 66% more than the previous year.
Beef + Lamb chief executive Sam McIvor said the report would be alarming for farmers, rural communities and New Zealanders in general who were concerned about the conversion of food-producing sheep and beef land.
