A Chinese company looks to invest in Western Australian land
ABC | 31 August 2011
Foreign investment in Australian agriculture has long been a part of the nation's farming landscape.
But news a large Chinese firm is eyeing prime Western Australian grain and dairy farms has given some the jitters.
It's understood China's most powerful agricultural company Beidahuang Group, BDH, has made offers on a number of farms in the state's south west, amounting to about 80,000 hectares of land.
The state-owned group employs nearly one million people worldwide and reportedly plans to expand its overseas investments in Australia, Russia, the Philippines, Brazil, Argentina, Zimbabwe and Venezuela.
The group has outlined plans to buy Australian land which would differ from its plans to rent agricultural land other countries.
The WA Farmers Federation president Mike Norton says the likes of BDH could endanger Australia's future food security.
"With this particular investment by this particular group, there's certainly something quite different," he said.
"From the information we have, they are looking at using Western Australia as a food bowl to supply the long-term needs of China directly for food self-security."
Mr Norton believes this is the start of a worrying trend.
"A lot of north and south-east Asia is starting to buy fixed assets in Australia," he said.
"They see looming world shortages in food production and are buying up strategic assets; (recently) the state-owned Chinese company Brite Food bought 75 per cent of one of Australia's largest food manufacturers, Manassen Foods."
A number of farmers, however, have a different perspective.
Lake Grace farmer Doug Clarke says he met BDH officials when they visited farms to the east of the shire a number of weeks ago.
He says he would welcome interest in his sheep and grain business.
"If you have a company coming along offering double the price your property is worth, you are going to take it, aren't you? he stated.
Mr Clarke says he believes overseas investment would only bolster Australian agriculture.
"I just think it's a good thing, China's got massive research facilities so if they have interests in Western Australia or Australia, there could well and truly be benefits to ourselves," he said.
A firm which assists overseas companies to invest in agriculture in Australia says it's short-sighted to view foreign investment in WA farming properties as a threat.
Corporate Agriculture Australia's Ken Sevenson says farmers can benefit from foreign investment.
"The next generation of agriculture may be half owned by corporate type investors of various sorts working in association and alongside the current investors," he said.
"I think that's really the way the industry will go because it is a very capital intensive business, and it does need to run at a fairly effective rate."
The Federal Member for O'Connor, Tony Crook, whose electorate covers a large swathe of the land in question, is concerned about the effects of foreign-owned farms on rural communities.
"Obviously these farms will need to be worked but there won't be as many people there," he said.
"If a conglomerate takes up a whole series of farms, they would be managed on a much broader basis.
"My real concern is that more people would be leaving regional Australia."
Serious concerns about foreign ownership of prime farming land were also raised at a national level in July when it emerged Chinese government-controlled mining companies had been buying up vast tracts of farmland in NSW and Queensland.
A state-owned Chinese company Shenhua Watermark Coal had spent $213 million buying 43 farms near the NSW township of Gunnedah so it could explore for coal.
In some cases, Shenhua had paid up to 10 times a property's previous selling price.
It raised questions about whether the sales were in the national interest and prompted a senate inquiry into what role the Foreign Investment Review Board played in scrutinising such transactions.
The FIRB was not required to vet Shenhua's buy up because the Treasury agency only investigates investments worth more than $230 million.
For Lake Grace farmer Doug Clarke, the debate swirling around the merits of Chinese investment in Australian farmland is missing the point.
He says it should be up to the farmers themselves to decide what they do with their land, not the politicians or the bureaucrats in Canberra.
"It's not up to governments to tell farmers who they sell their farms to or the people they sell their houses to or the people they sell their cars to," he said.
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