ANDREW MARSHALL
A RUSH of foreign investment interest in Australian farmland is stirring new concerns about just how much overseas ownership of local agricultural resources is too much.
Unease about global food shortages in the next 20 years - and long term agricultural market opportunities - have made Australia and areas of South America prized targets for foreign government-aided enterprises and private investor groups.
Africa has also been the focus of a significant land grab, particularly by overseas government-owned investment corporations from China and the Middle East.
Last week the Foreign Investment Review Board (FIRB) told a Senate committee hearing in Canberra it was possible for whole rural districts to be gradually acquired by offshore owners without any Australian government scrutiny or approval.
The FIRB would only be notified of agricultural land sales if individual property sales exceeded $231 million, or if land was being bought by a foreign government.
Responding to questions from the Senate's select committee on agriculture and related industries FIRB executive member, Patrick Colmer, agreed farm by farm acquisitions by foreign entities did not come onto the board's radar.
The comments follow the recent $40 million purchase of sheep properties in Queensland and Victoria by prominent international property developer, Qatar Investment Authority, and keen interest in southern Queensland irrigation giant, Cubbie Group, from another Middle Eastern investor and the British-backed Eastern Agriculture Australia.
Nearby on the NSW border, Carrington Farms has also lured keen overseas interest. The big irrigation aggregation is tipped to sell for up to $400m.
According to Senate select committee chairman, Sentator Bill Heffernan, while occasional big ticket sales already need FIRB approval, it was time to consider greater supervision of rural land and water sales to overseas interests.
"I'm not saying sales shouldn't be allowed, but if it's possible to gradually sell every farm in the Murrumbidgee Valley to overseas buyers, the wider community should be informed and realise what's happening," he said.
Author and science commentator, Julian Cribb, who also addressed last week's hearing, said it was no surprise UK investment interest was ramping up in Australia or that Middle Eastern companies were active.
"The Brits are clever investors with a big investment record in Australia and agriculture is a sensible long term investment," Mr Cribb said.
"The Middle East is desperate to lift its living standards with oil wealth. Arab consumption of meat, dairy and processed food is rising fast, but the region has also destroyed much of its agricultural potential.
"Global food demand will double before 2050 and all the things we need to produce food are also running out - water, nutrients and fossil fuel.
"The Chinese are very keen to invest in land here - they've even tried buying into CSR. In fact, it's government policy to grow more food outside their country."
And despite global economic jitters, private and institutional investors from the US and UK were showing as much, or more, interest in quality strategic rural properties than two years ago, said northern NSW property consultant, Philip Jarvis.
Mr Jarvis whose overseas client base was increasingly busy in the Australian rural property market, said while institutions like US pension funds were "not trying to buy half of rural Australia", they were active.
"The two big targets for international agricultural property at the moment are Australia and Brazil and the big boys with deepest pockets are well aware of the pros and cons of both," Mr Jarvis said.
"There are no floodgates opening up with US, Arab or Chinese investors taking over our assets, but it's interesting that overseas investors see a lot of potential that many Australian institutions and super funds haven't noticed beyond the sandstone curtain."
Senator Heffernan said some investors were clearly more mindful of food sovereignty issues than Australians realised.
"China's already a big landholder in Africa and paying big money for agricultural land for possible mining projects in Australia - in New Zealand they want to buy 17,000 dairy cows and associated farmland," he said.
"In Western Australia we've got an Indian-government backed company planning to build a fertiliser plant which will be committed, as part of its financial arrangements, to sending 90pc of its production back to India.
"We might wake up at some point finding that if overseas investors wanted to they could exclude us from enjoying the value of our own land because, for sovereign reasons, their production is linked to another nation's food security."
