Concern as foreign buyers secure agricultural land

Source @ SMH.com – 20 August 2011 – Darren Gray

CASHED-UP foreign buyers won approval to buy $650 million of Victorian agricultural, forestry or fishing assets in 2009-10, new figures obtained by The Saturday Age reveal. The massive investment pertained to just four proposed deals. The Foreign Investment Review Board figures show that proposed investments in the rural category spiked dramatically in 2009-10. But the proposed $650 million splurge followed four years in which no approvals were given by the FIRB for an agricultural, forestry or fishery purchase in this state.

The figures are likely to spark further debate over the foreign ownership of Australian farmland and agribusinesses, the nation’s food security, and the strength of our foreign ownership rules. The Victorian statistics come as agricultural banking specialists say the level of foreign interest in Australian agricultural assets is at least as high as ever before and will continue to rise..

The figures come in a week when:

■A Victorian real estate agency confirmed that Chinese buyers have recently toured south-west Victorian dairy farms looking for large-scale operations.

■The West Australian farming world was awash with speculation that Chinese buyers were interested in buying about 80,000 hectares of farmland in the state’s south-west.

Andrew Broad, president of the Victorian Farmers Federation, urged the federal government to toughen the rules on foreign investment.

”We have a global food crisis coming up, you’ve got countries like China that have 20 per cent of the world’s population and 6 per cent of the world’s arable land, and they’re moving into the space of securing their food needs,” he said.

But Assistant Treasurer Bill Shorten said the $650 million figure showed there had only been several large purchases by foreign entities in agriculture, forestry or fishing in 2009-10.

Mr Shorten denied that the purchase by foreign investors of farms and agribusinesses was a threat to Australia’s own food security.

”Let me be very clear. The vast majority of food consumed by Australians – 98 per cent in fact – is grown right here in Australia. A mere 2 per cent is from overseas,” he said.

The proposed purchases represented almost 28 per cent of the FIRB approvals nationwide in the rural category in 2009-10. The value of the proposed rural acquisitions nationwide was $2.33 billion.

But the Victorian figures do not reveal the full extent of the foreign interest.

Proposed agricultural purchases by foreign individuals and private companies are only considered by FIRB when they exceed $231 million.

This effectively rules out almost all farm sales to private foreign buyers, because in Australia only a tiny fraction of pastoral companies exceed this value. For American private business investment in Australian agriculture the threshold requiring a FIRB approval is a massive $1.005 billion.

All proposed purchases of agricultural assets by foreign governments and foreign government-controlled companies must be approved by the FIRB, regardless of value.

Mr Shorten said Australia’s foreign investment rules were ”very strong and put the national interest of the country before any other consideration, while still generally welcoming foreign investment”.

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