State-owned Landcorp Farming is in talks to operate the Crafar Farms should Shanghai Pengxin Group's application to the Overseas Investment Office succeed but it has denied a report it would pay $18 million a year in rent.
"The reports are quite untrue - there is no figure yet," Chris Kelly, Landcorp chief executive, told BusinessDesk. "We are discussing the possibility of running the farms - we had all hoped to have it sorted by now."
The Chinese company has been waiting almost nine months for an answer to its application to buy the farms, in a deal that is reportedly worth at least $200 million. That would top a rival proposal by a farmer group led by businessman Michael Fay by $30 million.
Hardie Peni, chairman of the Tiroa E and Te Hape B Trusts which are part of the Fay group, said the $18 million figure was based on a standard share-milking agreement and Landcorp's own production forecasts.
"From what we're hearing Landcorp have negotiated a deal that is the standard 50-50 share-milking deal familiar to the wider dairy industry," Peni said in a statement. The Landcorp plan would result in a state-owned company paying rent to "Chinese sitting in Shanghai" as "tenants on what was our own New Zealand farm land."
