28 February 2006 Land reform our loss – Opinion editorial by Ann Brower

The review of who owns New Zealand's high country has thrown up some questions about how well the public's interest is being represented, writes Ann Brower.

There is something different about the light in New Zealand's high country. It makes the details of topography so crisp as to appear fake, or somehow artificially enhanced.

On a clear day in Wanaka, it's easy to think you've just stepped out of Plato's cave. It's as if you've spent your life experiencing the world in two dimensions or in black and white, and now everything is in three-dimensional Technicolor.

On a cloudy day in the Crown Range, Aslan and his Narnian compatriots are surely not far away.

But the high-country landscapes are changing, from pastoral sheep farming to viticulture, from broad expanses of Crown land to private slices of heaven, and from extreme remoteness to Xtreme snowboarding.

Since 1992, the Crown has conveyed freehold, fee-simple title to about 58% of the reformed pastoral estate to farmers, retaining 42% in full Crown ownership, to be managed for conservation and recreation. The process is managed by the agency Land Information New Zealand (Linz), with many of the technical operations performed by professional contractors.

When the land reverts to the Crown, it shifts to the management of the Department of Conservation (DOC), steward of about one-third of New Zealand's land mass.

That farmers get more land than the Crown in an exchange is not surprising. Both theories of public choice and agency capture predict this outcome. What is more surprising, and not predicted by these theories, is that the Crown has paid lessees $15.5 million.

I have researched the politics of land-tenure reform in the South Island with the help of a Fulbright grant. I have explored the political history, property rights and administrative politics of the process to ask why the Crown has paid farmers millions of dollars to convert land from leasehold to freehold.

I started with a comparative approach, using the Sagebrush Rebellion launched by ranchers in the American West as a lens through which to examine the political history of the pastoral estate, from the 1856 establishment of pastoral licenses to the 1998 passage of legislation governing the leases' disestablishment.

The New Zealand push for reform succeeded, while a similar American attempt failed, because:

1. Property rights arrangements in New Zealand pastoral leases allow lessees to exclude recreationists and others, while not in the US.

2. The lack of legally sanctioned recreation access and conservation provisions in the leases led New Zealand's most prominent conservation and recreation advocacy groups to join the farmers' campaign for reform, while similar US groups vehemently opposed the Sagebrush Rebellion.

3. The administrative and institutional momentum from the 1980s state-sector reforms fuelled the campaign for reform. In short, the New Zealand pastoral property rights arrangements created a political landscape of win-win, in which each interest group – conservation, recreation and farmers – had something to gain.

As for the reform policy, the numerical results of tenure review appear biased in favour of the farmer, with farmers receiving 58% of the land as freehold, fee-simple private property, and millions of dollars in equalisation payments.

Acknowledging that numbers are political operatives, I deconstructed them and what they measure. Still, the 58-42 split is a statistical pattern, not a fluke, and $15.5m is a lot of money.

It is use rights in exchange here, not hectares, but a piece of land with subdivision rights is often worth more than the same land without those rights.

Property is not a binary variable of all or nothing. It is a highly divisible bundle of rights. Pastoral leases are a tangled web of private rights in Crown-held resources, and vice versa. Although these results are measured in hectares, it is use rights and land improvements that are being exchanged.

These use rights include pastoralism, residence and exclusion of trespassers, all held by the lessee. The exchange also includes potential subdivision, ski fields, auto-testing centres, and viticulture rights, all currently held by the Crown.

In the exchange, the Crown gets use rights of pastoralism, exclusive use, and land improvements passing to DOC. The lessee, now the title holder, gets the rest and, the numerical results suggest, a pile of cash.

The heart of the study asks how this result came about. It concludes that Linz's subscription to the myth of apolitical administration is leading the agency that represents the Crown's vested interest in the land to take a position of neutrality, instead of one of advocacy.

Linz relies on a functional split between policy and operations, which in turn relies on the oldest trick in the book of public administration, the politics-administration dichotomy. These two models share a common goal of avoiding agency capture in policy implementation, and the administrative tool of neutrality. But in this case, striving for neutrality is neutralising the Crown's interest in the land. Linz cannot be neutral and advocate the Crown's interest at the same time.

This report does not paint a rosy picture of land-tenure reform. It concludes that apolitical administration supersedes interest-group politics and property rights, and leads the Crown to take a neutral stance in the face of special interests motivated to diversify land use.

While the lessees quite rightly advocate for themselves, no-one sticks up for the Crown. DOC sticks up for conservation and recreation interests, but the Crown's interest is broader than DOC's.

Politics is the way of the world, not a corruptive force to be avoided. It is impossible to remove politics from inherently political decisions such as redistributing valuable resources. And it can be a dangerous endeavour. In this case, striving for neutrality to achieve a fair, unbiased and uncaptured result is doomed to fail on all counts.

The Crown is asserting neither its vested interest nor its bargaining powers. Instead, the Crown's position of neutrality makes it complicit in giving away freehold title to New Zealand's iconic high country, and paying the lessees to take it.

In short, the politics of land-tenure reform remain win-win, as long as the Crown agrees to lose.

This is not an indictment of Linz. Its attempts at neutrality are well intentioned, but placing ‘neutral’ and ‘vested interest’ in the same task description will not work. One will lose. In this case, it is the vested interest of the Crown, and ultimately the New Zealand people.

Ann Brower lectures in public policy at Lincoln University's (Canterbury, New Zealand) division of environment, society and design. This is an abridged version of the introduction to her Fulbright study of the high-country tenure review. For the full version, see www.fulbright.org.nz/voices/theses/browera.html