Delahunty Catherine: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeDelahunty Catherine: Oral Questions — Questions to Ministers[Sitting date: 18 August 2015. Volume:707;Page:5850. Text is incorporated into the Bound Volume.]12.CATHERINE DELAHUNTY (Green) to the Minister for State Owned Enterprises: Is he comfortable with Landcorp’s large-scale dairy conversions in the Waikato?Hon TODD McCLAY (Minister for State Owned Enterprises): In general yes although I would note that Landcorp continues to consider a number of uses for that land including dairy. However fluctuations in international commodity prices are likely to impact on its financial performance like many dairy farmers in New Zealand. Investment in dairy is generally undertaken on the basis of a long-term view on average dairy prices through time. The contractual agreement signed by Landcorp in 2004 means that Landcorp is contractually obliged to undertake land conversion activity on the Wairākei estate until 2049.Catherine Delahunty: In the light of that answer will this Government review the contract between Landcorp and Wairākei Pastoral and tell the public what options there are to stop the conversions which will not only undermine farmers downstream and pollute the environment but also impact on Landcorp’s balance sheet?Hon TODD McCLAY: That is an issue for the Landcorp board. It is the one that entered into that obligation and it is the one that has the obligation through that contract. But I would say to the member that the time for a Government to visit that contract was in 2004 before it was signed. I do understand the Government at the time was consulted and the Ministers gave their assent to that contract that has entered into force and will be in place until 2049.Catherine Delahunty: What will it take for the Government to place a moratorium on Landcorp dairy conversions given the overwhelming evidence they are economically risky and environmentally irresponsible?Hon TODD McCLAY: Again it is not for the Government to make that decision. As Minister I expect Landcorp to meet all of its environmental obligations anywhere it farms in New Zealand including in the Waikato. We expect it to meet the full requirements of the Resource Management Act. This is a discussion I have had with the Landcorp board on a number of occasions. To the best of my knowledge it meets those obligations and requirements.David Seymour: Is it not a conflict of interest for the Government to be both the owner of a dairy-oriented company and the regulator of the environmental impacts of dairying?Hon TODD McCLAY: No it is not although I would say to the member that this is not a dairy company; it is a farming organisation that has diverse farming interests across a spectrum of farming operations within New Zealand. Secondly though when it comes to the operation of Landcorp or any other farming entity in New Zealand the Resource Management Act suggests—or dictates—that it is regional councils that have the competence that he is speaking of.Catherine Delahunty: Is the Government ruling out selling off Landcorp farms to foreign owners rather than keeping this strategically important farmland in New Zealand hands?Hon TODD McCLAY: Landcorp buys and sells farms all of the time—indeed it has almost always done so. The Government expects it to manage its business well. We want to see a reasonable fair return to the taxpayer. We do not want it to have unnecessarily high levels of debt that could put its business into some form of peril. This is again a conversation I have been having for a period of time with the Landcorp board.David Seymour: Are there good reasons for the Government to be in the business of farming and if there are why stop there?Hon TODD McCLAY: There are many reasons why the Government is involved in Landcorp. Some of them are good.