The Overseas Investment Office (OIO) has some new guidelines from the Government to consider on potential farmland purchases by foreign investors.

A directive letter from Finance Minister Bill English details two new factors for the OIO to consider, including the economic interests of an application to New Zealand, and a ‘mitigating’ factor such as opportunity for local involvement.

Bill English says the new guidelines protect New Zealand’s interests while encouraging foreign investment.

"What is does is tries to strike a balance between protecting an asset New Zealanders regard as valuable – because it is –  and that is our farm land.

"But on the other hand make sure we are still open to foreign investment, because we need that for creating jobs and innovation and more exports in New Zealand."

Federated Farmers President Don Nicolson is welcoming the changes, and says overseas investment in New Zealand must continue.

"Up until now it appeared that political whimsy and public sentiment had a large say over the OIO and what was occurring.

"If we can get rid of that tension and just let the OIO get on and do its job then I am very happy."

The letter also says the OIO will place high emphasis on these factors when ‘large’ areas of farm land are at stake.

The definition of large has been set at ten times the average size of a type of farm.

According to Statistics NZ data, the average dairy farm is 172 hectares, so the threshold will be 1,720ha.

The average sheep farm is 443ha so the threshold will be 4,430ha.