You may not have know that. And in an election year, there's a growing conversation about whether you should keep owning them.

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Every asset the government holds has an opportunity cost, the return it could have earned doing something else. For Pamu, that cost is roughly $4 billion. That's what New Zealand has forgone by choosing to farm instead of invest. More on that later…

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Before getting to whether the NZ Govt should directly hold Pamu on its books, or whether the current returns delivered by management are acceptable, it's worth looking into the history of how and why Pamu came into existence, and what its effective function is today.

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How we got here

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Pamu's roots go back to 1948, when the Department of Lands and Survey developed Crown land to help New Zealanders, including returned soldiers, into farming. In 1987, as part of the Rogernomics reforms, that department was broken up: its commercial farming arm became Landcorp. Through the 1990s Landcorp rationalised its portfolio, and in 2017 it rebranded as Pamu. Today it runs 100+ farms on around 360,000 hectares. It is still fully Crown-owned, nearly eight decades after the original mission of "getting New Zealanders into farming" that mission has largely been forgotten.

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So what is Pamu's purpose today?

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On their "About" page, it states: "From sheep stations in the high country to leading-edge dairy, horticulture and forestry systems, Pāmu continues to evolve, demonstrating what sustainable and innovative agriculture looks like. We farm not just for today, but for generations to come."

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It's a nice statement. But in practice, when Pamu comes up in political or economic debate, almost no one argues for keeping it on those grounds. The real arguments, on both sides, are about something else entirely.

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The case for keeping Pamu

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Foreign ownership risk. A valid concern. Large swaths of NZ farmland are already being sold to overseas buyers, and a poorly planned sale would accelerate that. Any transition needs safeguards.

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Treaty of Waitangi obligations. Pamu holds land that is earmarked or potentially earmarked for Treaty settlements, including a right of first refusal for Ngāi Tahu on South Island properties.

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Research and innovation. Pamu invests in genetics, low-emissions livestock, and sustainable farming systems. The counter: most of the real innovation in NZ agriculture happens outside Pamu. Private sector incentives tend to drive faster innovation than Crown-owned farms do.

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A land-based reserve for the country. This is the argument I want to push back on hardest.

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If the government had sold Landcorp in 1990 for roughly $500 million and put the proceeds into gold, that reserve would be worth around $6.35 billion today. Pamu's current assets plus 35 years of dividends come to about $2.2 billion. That's a $4 billion gap. Roughly 3x under-performance.

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Gold isn't a perfect comparison. It pays no dividends, employs no one. But the point stands: when we choose to keep public capital tied up in farming, the country has an opportunity cost.

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The case for selling

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Efficiency. The argument is that private operators, with skin in the game, would run these farms more efficiently than a Crown entity. Pamu posted a $26 million loss in 2024 and a $9 million loss the year before, while running low debt levels, in a sector where many private operators made money.

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Better uses of public capital. $2.2 billion could fund infrastructure, pay down debt, or be redirected to health, roads, or education. Every dollar sitting in a Pamu paddock is a dollar not building something else.

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A third option

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Both sides have merit. But the debate as it's currently framed; keep it or sell it, misses a third option.

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At Seedling, we believe we have an option that ticks all the boxes for concerns, purpose and the future for NZ agriculture.

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Our fund has a model that incorporates an equity partnership for farmers, with some special sauce for helping them grow their equity, and eventually buying the fund out. This gets our best and brightest farmers into an ownership stake and aligns incentives for success. The buy back creates a rolling liquidity system for the fund, unlocking a key piece of the puzzle: Being able to bring onboard Kiwisavers as investors and taking them off the government books in a staged transition of the farms not tied to treaty settlements. Kiwis would still own the assets, but there would be private industry incentives and performance. Kiwis backing Kiwis into farming. It's got a ring to it.

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An election year decision

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So to loop back to the fact that we are in an election year, we believe it is time for bold leadership on where we take this magnificent country of ours. Let's get the basics sorted. Let private markets manage as much as possible, and let public resources be released to lay the infrastructure foundations for the next 100 years so NZ business and the amazing Kiwis that run them can prosper.

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If anyone working in the Kiwisaver industry or as part of an Iwi would like to continue a conversation, please feel free to reach out.

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