Middle East secretly targets our farms
Adelaide Now | 22 February 22, 2013
by Cameron England
Eyre Peninsula between Coffin Bay and Elliston. Picture: Leah Hodgkiss Source: adelaidenow
A QATARI Government-owned company is buying up prime agricultural land in South Australia at well above market rates and is forcing farmers to sign confidentiality agreements.
The company is threatening the farmers with severe consequences if they breach the agreements.
Hassad Australia last year bought a $9 million cattle property near Bordertown and is understood to be negotiating with several farmers on Eyre Peninsula to buy prime cropping and grazing land. It is believed the company is also looking at properties on Yorke Peninsula and in the Mid North.
In all, Hassad is thought to be looking at tens of thousands of hectares on Eyre Peninsula and across the state.
Survey - What do you think of foreign investment and food security?
The company, which is owned by the Government of Qatar, is paying up to 40 per cent above the going rate for Eyre Peninsula land - in some cases, more than $5000 per hectare.
The secret buy-up has renewed calls for a public register of foreign land ownership. Only very large sales are now disclosed to the public.
Hassad's buy-up has also prompted concern about the effect on rural businesses and communities.
Industry insiders said they had heard that Hassad was "sniffing around" late last year, but the imminent sales appear to have gone well under the radar.
The company, which declined an interview request from The Advertiser, is demanding farmers sign confidentiality agreements.
These say breaches of secrecy may cause irreparable harm to Hassad and cash would be insufficient compensation.
Hassad has already spent about $500 million buying about 40 farms covering about 250,000ha of prime agricultural land across the eastern states and WA.
Sales near the Victoria-SA border were also above market prices, according to interstate media reports.
South Australian Senator Nick Xenophon said the Hassad push into SA demonstrated the need for reform of Australia's foreign investment laws.
Private sales worth more than $248 million need to be signed off by the Foreign Investment Review Board. Because they are associated with a foreign government, the Hassad deals will also need to go to the FIRB - but they do not need to be disclosed to the public.
Federal and state governments - with the exception of the Queensland Government - do not keep a public register of foreign ownership of agricultural land or other real estate.
Senator Xenophon has proposed a Bill that would require any application to buy Australian agricultural land greater than 5ha to be listed online and subject to application to the Treasurer.
He said he did not oppose foreign investment, but the system needed to be more transparent.
Senator Xenophon said it was ironic that foreigners could see the value in Australia's agricultural land, but local investors were more wary.
He said there should be incentives for Australians, perhaps through superannuation funds, to invest in agriculture,
"You can't blame the Qataris, the Saudis, the Chinese and the Americans for buying up these tracts of agricultural land because they can see the long-term strategic benefit of food security - it's just that we don't get it," he said.
"These state-backed funds are investing in Australian agriculture because they can see that there will be a world food shortage. We are just selling away the national interest."
The National Farmers Federation has also called for more transparency.
"With state-owned enterprises entering the market, questions have been raised as to whether this type of investment is driven by the profitability of the venture or by sovereign food security concerns," it says in a recent submission to the Federal Government.
"This raises the question of transparency in the supply chain, potentially jeopardising competition at the farm gate and having a negative impact on the local market. At an extreme level, this could also lead to Australia's own food security goals being compromised."
The Federal Government is working on a national foreign ownership register for agricultural land, but the design of the register has not been released. Submissions on the proposed register closed on February 1.
Why we must be kept in the loop
FOREIGN investment has always been, and will remain, vital for the growth of the Australian economy but it must be transparent.
A great local example of foreign investment is the crop of new CBD apartment developments springing up in Adelaide, funded by Chinese capital. Most of these developments are connected to Chinese Australians with a strong local connection, who live here, or have family in the state.
It's the start of a long, and hopefully prosperous Sino-Australian relationship.
But some other investments are less obvious, and the reporting requirements that cover them verge on the bizarre.
Private investment in a business does not need to be referred to the Foreign Investment Review Board until it hits the $248 million level - a pretty high water mark.
All investments by foreign state-owned businesses have to be referred to the FIRB, but the public is not told about them.
And while the FIRB publishes the amount of proposed investment in Australia by various countries or their citizens, it won't break it down by state, or tell you what and where those investments were.
Transparency has a number of benefits. It allows competing businesses to stay aware of what's happening in their marketplace and helps dispel myths such as the notion Asian investors are buying up a disproportionate amount of Australian agricultural land. Foreign investors should also be asked what their intentions are for the use of land.
Hassad Australia is owned by the Hassad Food Company, whose prime mission is to provide food security for the small Middle Eastern nation.
Hassad Australia has made it clear that it is looking for a commercial outcome as well as the ability to feed the Qatari population.
Land banking by well-heeled foreign sovereign wealth funds, were it to happen, would be of no benefit to Australia, and markets such as those for water rights must be closely monitored.
The real question the debate about foreign land ownership throws up is this: "Why aren't Australians more interested in the land which foreign investors appear to be lining up to buy?"
Senator Nick Xenophon has suggested making investment in agricultural land easier for the vast amount of superannuation money in Australia would be a good start to answering this conundrum. I'd have to agree.
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