Pastoral lease reform: back to the future?
Will proposed reforms achieve their objectives or revive old tensions, wonder Professor Catherine Iorns and fellow members of the Environmental Law Initiative.
The Crown Pastoral Land Reform Bill, currently before Parliament, will end the 30-year programme called tenure review. Tenure review allows pastoral leaseholders to separate the land they lease from the Crown into two types: farmland where the farm is owned by them freehold and conservation land held by the Crown.
If the Bill becomes law, remaining pastoral leases will continue but with stronger rules limiting the changes leaseholders might make to their farming methods.
We are members of a newly established non-governmental organisation, the Environmental Law Initiative, and we think this Bill will in fact create greater problems in a climate-changed future.
We suggest either modifying the Bill or simply improving the existing tenure review process.
Pastoral leases
Crown pastoral land makes up 1.2 million hectares, or 5 percent, of New Zealand’s land area. Almost all of it is in the South Island’s high country and it is firmly ensconced in the national imagination as places where hardy musterers act out timeless and simple scenes.
The reality, however, is one of constant change and complexity, with the latter about balancing how special these places are with how important they have been to the national livelihood.
This has long been a matter for debate. The early estates of the 1840s and 50s found every sheep turned only a small profit, making flock scale the name of the game. But it was obvious more than a handful of sheep per acre damaged the land badly. So early farm ‘runs’ were huge, but even these damaged the land.
Land Acts of 1877 and 1908 saw the land go back to the Crown, leased out to farmers under 10-year leases without automatic rights of renewal. There were attempts to limit stock numbers and to suit specific pieces of land to specific uses to rein in the degradation. This led to a lot of subdivision. But farmers saw the short terms and non-renewability as restricting certainty about the land’s potential. A push and pull ensued, with amendments in 1912 and later extending lease terms and introducing partial rights of renewal. The system became complicated.
By 1948, it was clear to the Government the environmental results were not good, with large tracts of high-country land now barren scree with rabbits roaming in plague proportions. It was also clear to the farmers that the certainty wasn’t yet enough, with economic instability always looming large.
The Land Act of 1948 is still with us today. It contained a simplified system where land was leased or licensed with as-of-right perpetual renewals. In this way, the Crown could retain a degree of control over the management of the land through its rights as landlord to give, or withhold, discretionary consents. At the same time, the Act gave farmers a high security of tenure to shelter them from buffeting economic winds.
Tenure review
In the late 1980s and 90s, conflicting pressures increased over the balancing of the leases’ farming operations with other values, including recreation access and protection of unique natural vegetation and landscapes. This led to new arrangements being considered.
But unlike for other Crown land, the Government and high-country farmers could not agree on an ‘allocation’ tool to split high-country land for protection and economic purposes. The Crown wanted to exit its lessor role and get rid of the pastoral leases, but many farmers preferred being perpetual lessees. Others thought they might do well out of an ad-hoc and private allocation deal with the Crown.
It took until the Jim Bolger/Jenny Shipley National Government for agreement on changes. The result was ‘tenure review’, to be enacted in the Crown Pastoral Land Act 1998. Under this, the Crown would buy the whole lease or licence from the farmer and the farmer would buy the freehold of a small area back from the Crown. The remaining land with recreation and conservation values would go to the Department of Conservation as part of the conservation estate.
Tenure review was voluntary; this retained the security and choice farmers liked. But it would have some principles to constrain it, so the Crown too got consistency and not ad-hoc private deals.
These principles clearly reflect the split, being to “promote the management of [high-country land] in a way that is ecologically sustainable” and, subject to that sustainability, “enable [high-country land] capable of economic use to be freed from the management constraints (direct and indirect)”.
However, although the principles reflect clear policy, the Commissioner of Crown Lands—the head of Land Information New Zealand (LINZ)—was given wide discretion to choose how to go about reviews. This openness may represent the shadows of those farmers who wanted ad-hoc individual deals.
Since 1998, many farmers have gone through tenure review. It has had benefits, with landowners able to increase production and make improvements without additional Crown controls. Also through tenure review, significant areas have been added to the conservation estate and many of the issues relating to public access have been resolved.
Some lessees have kept farming after review—generally the more productive lowland parts of their old runs. But because high-country land always needed to be used in an extensive-pastoral farming system, their smaller areas have caused issues. Farmers have tended to intensify their operations and to do so near waterways. A collapse of the wool price has not helped viability. Nor has an often-high New Zealand dollar or the debt issues associated with land intensification.
Other lessees have subdivided and on-sold their land after review, particularly that near lakes desirable for housing. Many environmental and other community groups have been unhappy with the outcomes. The intensification has been beyond what many could have imagined, particularly in the MacKenzie Basin. That intensification has not only been on newly freeholded land, but also apparently through discretionary consents given by LINZ to lessees. Now—indisputably—the water quality of many of the waterways of both the high-country and lowland South Island are under threat, if not the jewels of the Southern Lakes.
Others have complained about private profits made in the sales of freehold farmland after tenure review and been critical of valuation methods that have seen the Crown and New Zealand public miss out on sharing in these profits. Still others complain that often-slender freehold paddocks in the front country are blocking access to vast areas of backcountry conservation and recreation land.
Further, remember tenure review is designed to split the leasehold land into blocks with production values and ones with environmental and recreation values. However, even after tenure review, some large pastoral lease areas have both perceived production and environmental values; so, on those lands, there are often ongoing tensions between the needs of farming and the protection of natural values, as well as issues around the responsibility for pest and weed control.
Crown Pastoral Land Reform Bill
Enter the Crown Pastoral Land Reform Bill, which will end tenure review and impose new environmental rules on high-country leases.
But we wonder whether removing tenure review will increase or decrease the tensions it was designed to alleviate. Can its end fit with strong new environmental controls without Crown support to farmers?
Are the valid concerns around intensification, and the need for new controls on it via the Bill, better diagnosed as an indictment of ineffective land and water planning under the Resource Management Act? If the Act is going to be replaced with stronger environmental bottom lines and better land and water planning, would these reforms address such concerns?
Is the Bill necessary to stop private profiteering from Crown land or could the existing system simply be administered differently to prevent that?
We are concerned the Bill as drafted might lock in leasehold tenure at a time when we know climate change effects on the high country are already locked in. The climate consequences for the economics of pastoral farming could be significant, especially on marginal lands. It could make pastoral farming on high country land even less viable than it is now, which could then encourage sales of leases only to those for whom farming viability is not a major issue. We expect this will make sales to overseas owners increasingly attractive.
But if the Crown bought out existing leases, the costs of continuing environmental care of the high country would be significant and possibly too big to be acceptable.
We also suggest that, if the Crown is serious about protecting significant natural values in the high country, it cannot require pastoral leaseholders to bear all the costs, as this Bill proposes. We all want these natural values protected, for everyone's benefit.
We therefore question whether the Bill will achieve its objectives or whether it will turn the clock back and revive old tensions and issues. There has always been tension about whether the high country is so special it needs only conservation protection or whether it should be looked after through farming. The Bill will not end that tension and needs to be improved if the high country is to remain as iconic in the national imagination as it is today.
Professor Catherine Iorns is in the Faculty of Law at Te Herenga Waka—Victoria University of Wellington and an adviser to the Environmental Law Initiative (ELI); Mike Britton is Chief Executive of the ELI; and Allan Brent is a senior adviser and conservation law researcher at the ELI.
The ELI is a new organisation looking to make a positive difference for nature and the environment in Aotearoa New Zealand. It has a focus on research and education, particularly on the oceans and coasts. It also has the depth of knowledge and experience to contribute to better conservation on land and in freshwater. See eli.org.nz.
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