Australia: Foreign-owned farmland prediction

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Latrobe Valley Express | 6 February 2012
Agribussiness Gippsland chair Alex Arbuthnot

BY LOUIS NELSON

The predictions come as debate over Australia's lax foreign ownership regulations heats up, prompted by a recent wave of interest in Australian land by Chinese investors.

Agribusiness Gippsland chair and Victorian Farmers' Federation land committee member Alex Arbuthnot said he made the 10-year 50 per cent ownership prediction based on a static rural real estate market, the region's productivity potential and growing world food demand.

Sale Elders Real Estate rural sales agent Rita Pahl, who has managed farm sales in Gippsland for 15 years, agreed with Mr Arbuthnot's prediction, and said she had been providing personal bus tours of Gippsland dairy farms for Chinese investors for the past three years.

Ms Pahl said while to the best of her knowledge no sales had been made to Chinese investors in the region to date, investment interest in dairy land was growing, particularly in the Macalister Irrigation District and South Gippsland.

She said a Chinese syndicate, with interests in buying "several dairy farms across the state" visited a local farm in late January before meeting with a local dairy processor, while another Chinese corporation was interested in purchasing local farmland, build its own local milk factory and export product to China.

"Everyone's saying 'oh my God, the Chinese are coming and buying us out', but who else is going to buy in Australia? We certainly aren't at the moment," Ms Pahl said.

"There's also serious interest from Japan and India, and not just in food production, so watch this space; those three countries are desperately looking for land assets of Australia," Mr Arbuthnot said.

Australian Dairy Farmers president and Moe dairy farmer Chris Griffin said while foreign owners who kept milk production within the local supply chains would not compromise Australian food security, any intentions to bypass existing local supply chains were concerning.

"We as an industry cannot condone that, and there would need to be more (government) scrutiny of that type of outcome," Mr Griffin said.

The Federal Government's foreign investment regulations have come under heavy criticism as the Foreign Investment Review Board will not investigate foreign companies buying into land assets worth less than $244 million, a threshold lifted from $231 million in January.

Mr Griffin said while national foreign ownership was "on his radar", the prediction for foreign ownership in Gippsland came as a "bit of a surprise".

"We don't really know any figures on how much Gippsland land is under foreign ownership currently, but that (predicted) increase would represent a huge influx in foreign sales over 10 years."

According to a rural land agent, who did not want to be named, foreign interest in local land was strong prior to the global financial crisis, with multiple land purchases by superannuation funds, management investment schemes and New Zealand investors, resulting in 80 per cent of dairy land sold in the MID over a two-year period to NZ farmers.

He said foreign and local interest "stopped overnight" when the GFC hit, but inflated prices, which increased the value of MID land from $14,000 to $20,000 per hectare, remained unmoved.
Original source: Latrobe Valley Express
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