Tenure review under the spotlight
Tenure review affects about 20% of the total land area of the South Island (2.4 million hectares), enabling 304 lessees to freehold part of the former Crown lease while the remainder becomes public conservation land.

Since 1992, 58% (162,000ha) has gone to the farmers and 42% (117,500ha) to the Crown. Farmers have been paid $16 million in compensation on top of the right to freehold. Sixty six leases have gone through review and 154 are in the process.

Tenure review has hit the headlines recently. On one side, it is suggested that farmers are the winners and Government the losers in a process that has seen large areas of previously Crown-owned land privatised. The new title-holders have not only profited from commercial opportunities such as intensification and subdivision, but have also been compensated from the public purse. Some conservation interests suggest that a large number of threatened plant and animal species are found in the most productive, lower country.

On the other side, it is argued that high-altitude tussock land is essential for grazing and the review proposals make stations uneconomic. They also say that farmers have successfully managed both productive and conservation values and can continue to do so.

Land Information New Zealand (LINZ) manages tenure review on behalf of the Crown. The SOE’s recent announcement that it is considering lifting rents for pastoral leaseland from the current 86 cents/hectare to a more commercial figure which takes into account values such as scenery, is being interpreted by some as pressuring remaining leaseholders to take part in tenure review.

Parliamentary Commissioner for the Environment Dr Morgan Williams has launched an investigation into tenure review. There are calls for the process to be halted while the investigation is carried out.

Bendigo Station
Bendigo Station near Alexandra was one of the first properties to complete tenure review, which enables farmers with pastoral licenses to freehold land in exchange for land with high conservation values.

The station got its name in the 1860s, when goldminers flocked to the area from Bendigo in Australia. Remnants of mine shafts and stone cottages remain, but today the station is best known for its merino wool and more recently Pinot Noir wine.

John and Heather Perriam bought Bendigo in 1979 and are the fourth owners of the 96-year-old property which was subdivided from Morven Hills.

Tenure review at Bendigo
Rabbits and droughts were threatening the Perriams’ viability at Bendigo, when they entered the tenure review process 15 years ago. Their decision to participate in the tenure review programme grew out of their involvement with the Rabbit and Land Management Programme and a visit from its then manager, Morgan Williams.

The couple was having trouble seeing a future past rabbits, in the days before rabbit calicivirus disease, when Williams suggested that to progress, they needed to move towards multiple land use which would require freeholding areas through tenure review.

Today, the Perriams and the Department of Conservation in Alexandra see the result of tenure review as win-win, for profitability and protection. However, they also acknowledge that there have been losses for both sides seen as inevitable in a negotiated outcome.

The outcomes
Before tenure review, Bendigo comprised of 11,000 hectares of pastoral lease land. It was running about 15,000 head of stock comprising 7000-8000 ewes with the balance hoggets and wethers.

Now roughly one third of the property is conservation land. The highest altitude country is now the 1980 hectare publicly-managed Bendigo Conservation Area, over which the Perriams hold a grazing licence. The mid altitude grasslands have been freeholded, with DOC conservation covenants protecting natural, landscape and heritage values.

Lowland areas have been converted to freehold, with the exception of 1077 hectares of kanuka dryland shrubland including the Bendigo Historic Park.

Today, intensification of lower altitude country means Bendigo’s stock units are virtually unchanged at 16,000-17,000 stock units including 10,000 ewes. Irrigation has been installed, and 350 hectares of vineyards developed.

A future plan involves developing a fishermen’s village, beside Lake Dunstan at Rocky Point. Compensation was not part of the Perriams’ tenure review package.

“Tenure review has enabled us to move from a narrow focused pastoral lease based on growing fine wool to a whole range of diverse enterprises,” says John Perriam. “After so many years of throwing dead money into poisoning rabbits, we now have a solid platform from which we can invest capital in a productive way.”

On-farm, this has included installing irrigation which has provided the ability to finish lambs and run more cattle. A 400 hectare vineyard has been developed and gamebirds are bred for hunting.

Beyond the farm gate, the Perriams’ investments include a rabbit processing plant and a Tarras-based retail shop specialising in merino garments and fibre, managed by Heather.
They also own two high country stations in the Waitaki and one in the Mackenzie Country, with a one third shareholding from Italian textile company Reda International.

“Certainly there have been big gains in biodiversity, heritage and public access from tenure review at Bendigo,” says Matthew Sole of the Department of Conservation, Alexandra. “However, depending on your view, gains are tempered by viticulture landscape transformation. Lines of difference in land use are now drawn more strongly across the landscape.”

Tenure review at Bendigo; an overview
Bendigo is made up of three distinct zones, each differently affected by tenure review.

Irrigation transforms low country
The Perriams have attracted $35 million of local and overseas investment into transforming the previously parched and rabbit-prone lower slopes and terraces of the Dunstan Range by installing irrigation.

“Once a desert, the lowland is now a very productive basin, with vineyards on the surrounding slopes,” says John.

Bendigo stock were once sold as stores, but now each year lambs and cattle are fattened on pastures watered by pivot irrigators.

“Winegrowing has turned land that was a liability into a flagship enterprise for Bendigo,” says John.

The grapegrowing enterprise began with the Perriams forming a partnership with a French family which had made wine for six centuries, to plant 15 hectares of mostly Pinot Noir vines and set up a winery in Cromwell. Austrian winemaker Rudi Bauer was employed and when he won the 1999 New Zealand winemaker of the year, the phone started ringing.

Nowadays, the Perriams have two small vineyards of their own with 10 subdivided and sold to purchasers hand-picked as adding to the Bendigo vision and brand.

Each vineyard is governed by covenants with requirements including an approved planting programme, underground wiring, a prohibition on using noisy bird-scarers, and a colour-code for buildings. Wines are made under individual labels, but all carry the Bendigo sub-brand.
“We have created something special; a new world Tuscany,” says John.

He’s delighted that vineyards - each one ring-fenced with netting - “have driven the rabbit out. There’s no place for a rabbit in a corporate vineyard.”

Kanuka and conservation reserves
Behind the vineyards are the Bendigo Historical Reserve and Kanuka Dryland Forest Scenic Reserve, both now managed by DOC although previously privately protected and open to the public.

The ruins of two historic goldmining towns, Welshtown and Logantown, have been restored with the help of conservation volunteers with access provided around the hard rock mining area and several deep mineshafts covered, for safety reasons.

Most of the gold found in Central Otago was alluvial, but on this higher ground the gold was in a quartz reef requiring new extraction techniques.

Either side of the Historical Reserve is a band of kanuka shrubland which DOC rates as probably the best example in Central Otago, giving a feel of what the district was like pre Maori fires and grazing.

“It is extremely diverse and rich with a range of plant species such as Olearia including threatened species, coprosma, korokia and associated animal species such as moths, grasshoppers, beetles and birdlife,” says Matthew Sole of DOC, Alexandra.

DOC has just finished developing Central Otago’s first bush walk through the Kanuka Dryland shrubland.

Matthew describes preservation of this shrubland as “a very good conservation outcome,” eliminating the grazing which had held back regeneration and thus plant diversity.

The Perriams also rate the transfer of this land as a win. Managing the kanuka forest had been a headache because of the large number of rabbits which bred there, and the historic mining area was riddled with shafts which posed a threat to both stock and visiting public.
Also, the conservation areas with their network of walking tracks provided a great backdrop to the vineyards.

The mid altitude grasslands
Bendigo’s mid altitude country has been freeholded by the Perriams with the exception of some DOC covenanted areas. This country is oversown and topdressed, “and always will be,” says John.

The tops
The Bendigo tops are typical of country transferred from Land Information New Zealand management to the DOC. They were taken on in quite a degraded condition, with grazing stock having bared off soils which became vulnerable to invasion by hieracium flatweed.

The Perriams hold a long-term grazing license over this land, subject to set levels of stock being carried and vegetation being monitored every five years with the possibility of the lease being forfeited for a period of time or completely if the conservation values were threatened.
“DoC’s preference was for no grazing on this severely degraded country,” said Sole.
However, this was a negotiated deal and the Perriams had argued that their management programme depended on running stock on this land for a short period in summer, to spell mid altitude silver tussockland.

Especially in dry years, if they were denied grazing of the high altitude pastures it would put pressure on the mid altitude zone, John argues.

Nowadays, such leases were not commonly granted under tenure review, says Matthew. The practice if a grazing lease was negotiated was to insert a sunset clause whereby the farmer was given a set period to find another source of grazing.

The lease land has been monitored twice, with a review recently completed with outcomes to be discussed between the Perriams and DoC.

A slow process
Completing tenure review at Bendigo took 10 years, and John and Heather suspect that the process has become more bureaucratic and no faster.

“For us, it was quite an enjoyable process sitting around the table with conservation and LINZ representatives, pretty much writing our own rules. We were lucky to have an environment where we got on well with local staff and still do. But the closer we got to Wellington, the harder it got,” says John.

Issues – a land grab?
John Perriam has serious reservations that tenure review is “turning out to be a land grab. I have a problem with vast areas of high country going into the DoC estate which could become too large to administer.”

The high country man, horse and dogs is a great New Zealand icon that is now threatened, he suggests.

The Merino industry was based on marketing very fine wool grown on natural tussock-lands, which John believes could continue to be grazed with little impact on conservation values. With this land now going out of farming, the number of merino wethers which have traditionally stocked the high country have fallen while lowland not suited to merinos was developed into dairying, meat finishing, vineyards and even residential property.
“The balance is being upset.”

John is relieved that he and Heather went through tenure review early in the process and were able to negotiate to graze publicly-owned high country. Now leases were often short-term with payouts are made to compensate farmers for lost grazing, with the intention that they could acquire land to restore balance to their management system, “often not easy to do,” says John.

“The risk with a profit-driven model is that sacrifices will be made to service debt and chase profit,” Matthew comments. “Public conservation removes the profit motive and pressure.”

Pace of change
Matthew is concerned that the pace of change on lower and mid-altitude land freeheld under tenure review has been a lot faster and more radical than was anticipated. District planning was in catch-up mode, to take on board communities’ varied views on resulting landscape changes.

Current District Plans did not include provisions to deal with proposals such as lakeshore subdivisions, for example. Adapting these plans would be a low process, and meanwhile freeholding was in some cases being done at a biodiversity, landscape and sometimes heritage cost (when water races disappeared in a vineyard development, for example).
Ecologically, biodiversity had suffered especially in productive valley floors which had seen the most intensive modification from its natural state. Wetlands and saline conservation areas had been among the victims of development.

Higher up the valley walls modification is less extreme.

“A real concern is the strength and will in the Resource Management Act process to acknowledge and deal with these issues.”

Because lowland areas are the most productive on pastoral leasehold properties, “we are not going to get a deal if the farmer has to give it away.

“The best outcome for conservation would be outright purchase, but that would be at the loss of sustainable economic development,” Matthew acknowledges.

For more information on tenure reviews visit: www.linz.govt.nz

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