Farmers are concerned over calls to harness Asian capital to boost the nation's food production
by: Ben Packham
FARMERS have demanded an overhaul of foreign investment rules ahead of any attempt to harness Asian capital to boost the nation's food production.
Trade Minister Craig Emerson has outlined a plan to use Chinese and Indian investment to revolutionise Australian agriculture and capitalise on the region's food security concerns.
But farmer and Liberal Senator Bill Heffernan said there was nothing to ensure foreign-owned corporations or joint ventures especially those involving state-run firms participated in Australian markets and were subject to the same requirements as domestic businesses.
He called for a complete audit of foreign investment in the sector before the door was opened to a fresh wave of foreign capital.
"We don't know who is buying what. There is no compliance, there is no regulation," Senator Heffernan said.
"You've somehow got to make them participate in the supply and demand market.
"If you allow too much stuff to bypass the market, you'll bugger the market.
"This is the time to say, 'Hang on here a minute'. Let's slow down here'."
Senator Heffernan raised the prospect of requirements, such as those reported in the mining industry, in which foreign-linked firms required the use of imported products and offshore workers.
The National Farmers Federation, in a submission to the government's Asian Century White Paper, also complained of a lack of transparency in relation to foreign investment in agricultural land.
"Rather than being underpinned by genuine commercial forces where profits are the driver, food security has emerged as a new factor for investment," the NFF said.
"With state-owned enterprises entering the market, it is becoming blurred as to whether all of this investment is still interested in the profitability of the venture, or rather in ensuring that a consistent stream of food can be delivered to its people."
It wants a rethink of the $244 million threshold that triggers reviews by the Foreign Investment Review Board, and more stringent guarantees that state-owned enterprises are not masquerading as commercial entities.
Senator Heffernan said there was no way to ensure foreign investors complied with the rules.
"It's self reporting" he said.
"You've got to own up to the Foreign Investment Review Board.
"But if you don't, there is no penalty. They don't cancel the sale."
ABC | 12 March 2012
Govt pushes Asian food bowl plan, foreign investment
Emily Bourke reported this story on Monday, March 12, 2012 12:22:00
ELEANOR HALL: The Federal Government is calling for more foreign investment in the country's regional infrastructure.
The Trade Minister Craig Emerson says overseas investment could help make Australia the food bowl of Asia.
But there are concerns that this could diminish Australia's own food security, as Emily Bourke reports.
EMILY BOURKE: A new report by the United Nations says the growing world population will drive up demand for food by 70 per cent by the year 2050. And with that in mind the Federal Government wants Australia to become a global food production powerhouse.
The Trade Minister Craig Emerson has told ABC 702 Mornings that Australia can play a bigger part in feeding the world's hungry middle classes.
CRAIG EMERSON: The old phraseology is we could be the food bowl for Asia. That's an idea that's been around for a long time but we can make that a reality.
There's already 7 billion people on earth - another 2 billion to be added by 2035. And in addition to that big increase in population the rising middles classes of Asia are demanding more high protein foods and for Australia that means more beef, more sheep meat and more dairy products.
EMILY BOURKE: To do that Craig Emerson says Australia needs to encourage greater foreign investment.
CRAIG EMERSON: This isn't a matter of buying up the farm and dedicating farm production to those countries in Asia, but investing in water infrastructure. There's no doubt that we have a reputation for being drought-prone but that obviously has an adverse affect on our capacity to be reliable suppliers of food to Asia. So we need to do more with our water infrastructure on farm water conservation.
And also our transport and logistics in getting product from farms to markets.
EMILY BOURKE: And he says without overseas interest Australian farmers and their rural communities will miss out on massive opportunities.
CRAIG EMERSON: This would be market driven. But we'd need to allow the market to work and that is allow foreign investment to supplement Australian investment instead of being xenophobic about this.
Now are we going to ask our farmers to turn their backs on this once in a generation opportunity because Barnaby Joyce and the Coalition are against foreign investment in Australian farms?
EMILY BOURKE: But not all farmers are quite so keen.
New South Wales farmer and Liberal Senator Bill Heffernan says he has no issue with Australia becoming Asia's food bowl.
BILL HEFFERNAN: I don't have a problem with that all. And it's not xenophobic to say to Australians let's understand what we're doing now, where it's going to take us and do we want to go there.
EMILY BOURKE: Senator Heffernan is chairing a Senate inquiry into the Foreign Investment Review Board and the national interest.
And he says while he has few qualms with foreign investment in domestic infrastructure it must be strictly monitored and regulated.
BILL HEFFERNAN: We need foreign capital but we need them to participate in our tax system. We need to make sure that they participate in our supply and demand in the markets, that we maintain tension in our auction system for our farmers.
What some of the Indian politicians are saying and what the Chinese people are saying is we want to bypass foreign markets and deal direct from our sovereign acquisition in another country back to our own sovereign interest in the homeland.
EMILY BOURKE: So you're not confident that Chinese or Indian foreign investors would play by the rules.
BILL HEFFERNAN: They will play by the rules but there aren't any rules at the present time.
I'm chairing the inquiry into sovereign investment and the national interest test. This was based on regulation under the Foreign Takeovers Act when we used to send telegrams to one another.
I mean there are no penalties, there is no compliance. There is allegedly mandatory reporting for sovereign involvement but if they don't according to the chairman of the Foreign Investment Review Board in the hearing - read it in the transcript - if they don't comply there is no penalty. And so you know if you get away with it, you've got away with it.
EMILY BOURKE: And he points to worrying loopholes in the current national interest test.
BILL HEFFERNAN: So in the evidence we've received in the last week or two we've discovered that a good vast piece of the Kimberleys, all the Simpson Desert, all the desert country, for the purposes of the Takeover Act is considered to be urban.
So you've got to go to the Foreign Investment Board allegedly if you're buying there if you're a foreigner. But if you want to buy 200,000 acres of the prime agricultural land in any one sale as long as it doesn't trigger $244 million you just get on with it.
I mean this is silly stuff and obviously it's going to get Australia into a lot of trouble unless we update it. And I have to say they're regulated by an act that's so far out of date it's laughable.
ELEANOR HALL: That's the Liberal Senator Bill Heffernan ending that report by Emily Bourke.