Foreign investment in Australian agricultural land & food production companies

Trade Minister Craig Emerson says the increase in foreign ownership of Australian farm land has been negligible. ‘Barely 6%’ is foreign owned and there has been ‘little change in 25 years’.

How about Craig trots out the precise figures, so we can draw our own conclusions? Or do his figures only include land sales that were over the FIRB trigger of $244 million (and that’s single land sales, not cumulative totals).  Last time I checked, there weren’t a lot of Australian cattle stations selling for $244 million or more.  In other words, the vast majority of rural land sales are way below the Foreign Investment Review Board minimum amounts which trigger a review.  And we don’t have any figures for any sales for lesser amounts. So Craig is either stupid or he’s treating us like we’re stupid.

Stephen Kirchner writes in The Australian today  “Too much of the debate about foreign ownership of agricultural land and residential property is driven by anecdote rather than data. This creates an environment in which cynical politicians can more easily exploit community anxieties for electoral advantage.”  Hmmm Stephen, excuse me for being cynical, but unless you have access to a set of precise figures that the rest of Australia does not, how do you know that ‘community anxieties’ are unfounded?  It’s entirely possible foreign ownership of Australian food-producing land and food production companies is actually higher and/or increasing at a faster rate than anyone realises.  Because Australia doesn’t keep a comprehensive register of overseas ownership of Australian land.  So we don’t have any evidence either way.  Unfortunately, although Stephen is a researcher and university lecturer, his article is blatantly subjective – telling us we should support foreign investment deregulation, without any actual evidence to back up why we should, let alone an objective discussion of the pros and cons. Arguing for the abolition of the FIRB when we don’t have any accurate records regarding current overseas ownership of agricultural land, leaving us also completely incapable of accurately assessing the current situation or identifying any trends, is ridiculous.  Stephen trots out his own ‘anecdotal evidence’ by stating that keeping the FIRB and lowering review limits would reduce foreign investment in Australian land. What if we discovered, by compiling and maintaining accurate foreign ownership records, that the level of ownership was much lower than the ‘panicky hoi polloi’ believe?  Might this not lead to a relaxing of foreign ownership reviews and restrictions?

Stephen would help his cause by listing overseas owners that have bought Australian food-producing land and invested in genuine, long term improvements – i.e. pointing out positive examples of how Australia has benefited from foreign investors.  Or doesn’t he know any examples of beneficial overseas investment?  Of all the overseas companies that I’ve ever seen invest in large Australian cattle stations, I’ve only ever seen one that genuinely cared about the land they bought and left it in a far superior state than it was when they purchased it – the U.S. based Kleberg family of King Ranch, headed by Bob Kleberg. Every other overseas company I’ve ever seen buy large Australian cattle stations, plus some Australian companies, have been sap-suckers. They’ve bought healthy going concerns, run them on as tight a short-term budget as possible, then sold them in a similiar or less healthy state.  Usually within 3-5 years or so.  These operations are businesses, concerned only with lining their own pockets, and anyone who believes otherwise is a fool.

There’s a fundamental principle that over, over and over again has been demonstrated to be true when it comes to ownership of food producing land.  If, first and foremost, the owners of the land have their hearts in it – if they genuinely love the land and producing food – then it’s in good hands, from everyone’s point of view.  If the owners bought into the enterprise simply because they see a good profit to be banked then the enterprise is absolutely not in good hands and it will not be left in better shape when it is sold.  Right now I know there has been an increase in foreign interest in buying Australian farm land and this interest is from people who are only interested in profits, not agriculture – agriculture is just seen as the means to the end – making more money for themselves.  The increase in interest has been substantial so it stands to reason that at least some of it has gone on from interest to actual purchase.  But again, we don’t have a comprehensive record of ownership….

The American Kleberg family love the land, cattle and horses. They invested in their Australian properties with their hearts – leaving a lasting legacy in the shape of quality Santa Gertrudis cattle and Quarterhorses.  If overseas farm investors were like the Klebergs then we’d fling open the gates and let the lot in.

Many politicians, business people and economists need to be reminded on a regular basis that food is the most vital element required by human beings after air and water. It’s in a different category to anything else in business  you care to mention so ensuring the long term security of food quality and quantity, deserves the utmost care and consideration.

Ideally, there wouldn’t be anyone owning Australian food producing land who didn’t love the land.  Because these are the people who look after the natural environment and the business, they plan and think long term, reinvest as much as possible and they care about producing good quality food. The rest simply care about increasing their bank balance and the only people who benefit from this approach is the handful of people involved.  The same applies to Australian food producing companies.  So if reducing the purchase amounts which trigger foreign investment reviews helps prevent food producing land and food production companies from falling into the ownership of people who first and foremost care about their own bank balance, above all else, it can only be a good thing.

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