Hark, the Herald’s angle sings – mostly because it emphasises McCully’s thoughts on Saudi sheep deal

The NZ Herald perhaps has summed up the deal correctly with its headline. Or Stuff has done so.

But they can’t both be right – can they?

The Herald has gone for…

Saudi farm spend ‘an opportunity’

At Stuff you will be told...

Government’s $6 million investment into a Saudi farm ‘dodgy’

The differing attitudes depend on whose observations were given emphasis early in the story.

The angle taken by the reporter, in other words (or by the rewrite staff if it was rewritten).

Let’s start at Stuff.

Its opening paras say:

The Government’s $6 million investment into a Saudi Arabian farm has been described as “dodgy”.

Critics have hit out at what they describe as a compensation deal for Saudi Arabian businessman Hmood Al Khalaf, who 12 years ago was denied exporting live sheep for slaughter to the Middle East.

The case has raised the question of whether New Zealand farmers who were also stopped from exporting live sheep should be entitled for compensation.

It soon becomes apparent the reporter has been talking with lefties.

Labour Finance spokesman David Parker said one of New Zealand’s greatest attributes was its reputation for being free of corruption and inappropriate influence, but that was being undermined by the way the National Government did business.

“I’m not suggesting an illegal purpose on behalf of [Trade and Enterprise Minister] Steven Joyce or [Prime Minister] John Key, but there is an absence of understanding of proper ethics when it comes to governmental conduct,” Parker said.

“It is something that is besmirching our reputation abroad as an honest broker and is undermining standards of conduct,” he said.

Readers are treated to some useful background.

Last year the Government set up what it described as an “agribusiness service hub and demonstration farm” in Dammam, under the auspices of New Zealand Trade and Enterprise, and the Ministries of Foreign Affairs and Primary Industries.

It is the only New Zealand Government-sponsored and funded demonstration farm in the world. Primary Industries Minister Nathan Guy said on a visit a year ago that it would be a “showcase” of New Zealand agritech.

Trade would benefit because it would open up market opportunities and “provide a much stronger market presence for the export of chilled lamb from New Zealand,” Guy said.

Then we get a whiff of something in a Ministry for Foreign Affairs and Trade strategy paper which says New Zealand could contribute to the food security needs of Gulf countries.

“For this reason the New Zealand Government has committed funding to establish an agri-business service hub in the Gulf to fast track partnerships between New Zealand and GCC businesses,” the paper says.

And here’s something about ownership:

The farm is owned by Al Khalaf, whose long standing ties with New Zealand include investments in three Hawke’s Bay farms, and a sheep breeding programme worth $20m.

Foreign Affairs Minister Murray McCully said the Saudi partner, Al Khalaf Group, had contributed around $80m in land, labour, and finance towards the project.

“While furthering our FTA ambitions with the Gulf states was a key consideration in the establishment of the hub, the investment, and our wider food security cooperation partnership with the Gulf states, would not have gone ahead if it did not provide a sound opportunity for New Zealand companies,” McCully said.

It looks like a lot of sheep got a chance to travel (although some didn’t quite make it to their destinations, presumably because of some fatal form of sea-sickness).

From 1989 until 2003, Al Khalaf exported about five million live sheep for slaughter into the Middle East from New Zealand, until the practice was stopped after 4000 sheep died aboard the Cormo Express.

Late last year 900 pregnant awassi sheep were airfreighted from New Zealand to Al Khalaf’s farm in Saudi Arabia for breeding purposes. The awassi breed is a hardy, fat-tailed, desert-bred animal known for its tasty meat and much sought after during the Haj pilgrimage for ritual slaughter and to feast on.

Inevitably New Zealand First leader Winston Peters comes into the story at this juncture.

He has said the deal is “dodgy” and is asking why technology in which New Zealand was a world leader should be exported.

We further learn that about 30 New Zealand companies are involved in the venture, including veterinary services, sheep yard constructors, woolshed, animal weighing and abattoir specialists.

And then comes some fascinating conjecture about what’s going on:

A South Island farmer who did not want to be named and who exported “thousands” of live sheep for slaughter during the 1980s and 90s, said that if the creation of the demonstration farm was a form of compensation to Al Khalaf, then New Zealand exporters were also entitled to compensation.

During the 1980s when farmers were struggling, it was a “real bonus” to be able to send sheep to the Middle East. It also kept the freezing companies honest at a time when there was an oversupply of sheep.

Parker said as far as he was aware there had been no improper behaviour on the behalf of the Government in shutting down live exports.

“But if you are going to be compensating Saudi millionaires by spending millions of dollars for their benefit, if you are a New Zealand party who did not receive such largesse, you would feel aggrieved,” Parker said.

Peters said New Zealand farmers would be far more entitled to compensation than Al Khalaf.

In April when Key visited Saudi Arabia, it was suggested a free trade deal between New Zealand and the Gulf states had been put on hold because of Al Khalaf’s influence. The deal has still not been concluded.

The Herald report, which Alf prefers, gives greater emphasis to the endorsement of his good mate Murray McCully and trade officials.

It kicks off:

Spending millions of dollars on a Saudi businessman’s farm was not “compensation” paid to clear the way for a free trade deal, officials say.

Foreign Minister Murray McCully said a push for a regional trade deal was a key consideration when investing in the farm, but there would be no deal if it did not provide a sound opportunity for Kiwi companies.

New Zealand spent $6 million to help establish a demonstration farm near Dammam, in eastern Saudi Arabia, saying it would be used to showcase New Zealand’s agricultural technology.

Almost 1000 breeding ewes were air-freighted from New Zealand to the farm owned by businessman Sheikh Hamood Al Ali Khalaf.

His Sydney-based business partner, George Assaf, told One News this week the fit-out was done to “compensate” the pair for New Zealand’s ban on live sheep exports for slaughter. The 2009 ban had cost them hundreds of millions of dollars and the fallout was a reason for a stalled free trade agreement.

The Al Khalaf Group is a big player in livestock transportation, and has farming interests in Hawkes Bay with two properties totalling 2150ha.

This report rules out any idea we must mollify an aggrieved Arab investor:

After touring Saudi Arabia and other Gulf states last month, Prime Minister John Key told media there was no issue of a disgruntled Saudi investor opposing a deal.

This is countered by Parker, of course:

Labour’s trade spokesman David Parker said if the statements attributed to Mr Assaf were true, the farm investment was disgraceful.

“You shouldn’t buy free trade agreements. You shouldn’t have to do special favours for powerful people,” Mr Parker told the Weekend Herald.

“I think [the Government] is undermining the business ethic in New Zealand and the international reputation we have.”

And then we get more from McCully and his statement about the Al Khalaf Group contributing about $80 million in land, labour and finance towards the project.

“This agri-hub is a mutually beneficial project with 30 New Zealand businesses attached to it. The companies each stand to gain …

“While furthering our FTA ambitions with the Gulf states was a key consideration in the establishment of the hub, the investment, and our wider food security co-operation partnership with the Gulf states, would not have gone ahead if it did not provide a sound opportunity for New Zealand companies.”

Alf need not tell his constituents to make up their own minds about whether the deal is a good one or a stinker.

But he will be telling his mates in the Eketahuna Club that wonderful export opportunities are being opened.

As he understands it, Saudi Arabia is a bloody big sandpit with lots of oil being pumped up from beneath the surface.

Growing sheep calls for pasture which calls for water.

And New Zealand has lots of water.

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