Story: Ahuwhenua – Māori land and agriculture
Page 3 – Trusts and incorporations
Ahuwhenua trusts and Māori incorporations
The two key structures developed to manage Māori interests in land were ahuwhenua trusts and Māori incorporations. In 2008 there were 129 Māori incorporations and 5,201 ahuwhenua trusts which together administered around two-thirds of Māori land.
Ahuwhenua trusts are popular because land owners retain their interests as owners. With incorporations, owners become shareholders who receive dividends on their shareholding. More recent legislation allows ahuwhenua trusts to conduct themselves in a more commercial manner if owners wish, and to amend the trust order accordingly.
Corporate farmers
The majority of Māori land is administered by trustees or management committees, unlike the broader New Zealand agricultural sector, which is dominated by owner-operator family farms. Much of Māori agricultural production is carried out by the corporate farmer – landowners do not work on farms but employ others to run them.
Māori agriculture has unique problems relating to ownership, governance and access to capital.
Ownership
The majority of Māori landowners are absentee owners. The physical separation of the owners from their ancestral lands has major effects on the organisations that administer and control the lands.
Most Māori landowners will never occupy the land they collectively own, nor obtain a livelihood from it. But ownership of Māori land plays a major role in cultural identity. Land provides owners with their tūrangawaewae (their place to stand, or sense of belonging). Because such land is precious, owners are often conservative and risk-averse, particularly when there is a chance that land might be placed at risk of being lost. Landowners believe that organisations should place as much importance on their social and cultural objectives as on maintaining commercial viability.
Governance and decision making
Appointments to boards or committees are primarily from within the landowning groups. Owners elect representatives democratically, and the final makeup of committees often reflects the interests of families keen to maintain control of the organisation. If members lack experience at governance and management this can affect the success of trusts and incorporations.
Access to capital
Organisations often struggle to obtain access to capital to develop their landholdings. A conservative, debt-averse approach is often driven by owners’ demands. Because of the complexity of multiple land ownership, lenders are often unwilling to lend with Māori land as security. If managers do not have extensive business experience, it can be harder to get finance to develop land.
Company solutions
Recently, the Māori Land Court has more actively promoted the use of the company structure, under the Companies Act 1993, as a way to separate land ownership from business activities. A company structure can allow the separation of commercial objectives from social and cultural ones, and provide a mechanism for internal checks on performance. The commercial goals of a company can be clearly laid down and management can be assessed. Electing a board of directors – none of whom necessarily need to be owners and who are chosen primarily for their commercial ability – improves lines of accountability.
