Australian Broadcasting Corporation | 23 July 2013
Chinese purchase of WA farmland divides opinions
Reporter: Bronwyn Herbert
China's biggest state-owned agricultural conglomerate has bought farmland and port facilities in Western Australia and the move has sharply divided responses.
LEIGH SALES, PRESENTER: It's an emotive issue across rural Australia. Cashed up foreigners buying land and speeding the demise of the family farm.
In the latest example China's biggest State owned agricultural conglomerate has for the first time invested in the Australian market, buying up vast tracks of farmland in Western Australia as well as port facilities to ship its grain out of the country.
There's no doubt foreign capital helps boost economic growth but it's also breeding resentment, as Bronwyn Herbert reports.
WILL CROZIER, VICSTOCK GLOBAL: Yeah, g'day, mate, it's Will. Good, really good, thanks. Look, just want to go over that asset register for our eastern property.
BRONWYN HERBERT, REPORTER: Will Crozier has a lot on his mind. The former farmer from Geelong is now an international deal maker in agriculture.
WILL CROZIER: Yeah, fantastic. Ten mills, overnight.
BRONWYN HERBERT: And the purchase of this farm four hours south of Perth is one of the biggest he's negotiated. It's part of a $150 million investment by China's largest agricultural company.
WILL CROZIER: The vision is massive. The development is massive so far and it's only a start.
BRONWYN HERBERT: Beidahuang lays claim to being the world's biggest farming operation. It already grows more than 70 million tonnes of grain globally, has a permanent work force of 300,000 people and operates in more than 30 countries. But the purchase of more than 40,000 hectares of farmland in WA's south is the company's first foray into Australian agriculture and this is its first crop.
WILL CROZIER: Beidahuang farm all over the world. They're the biggest farming operation in the world. I think it's 70 million tonnes of grain annually that they crop. This is the first time that we've, that they've been introduced to Australia, Australian techniques, Australian technology and Australian climate.
BRONWYN HERBERT: Beidahuang through its new Australian subsidiary Heilongjiang Agriculture, hasn't just bought the farm. It's also purchased port facilities at nearby Albany to vertically integrate its operations. This creates its own paddock to plate supply chain from WA to northern China.
MARY NENKE, WEST AUSTRALIAN FARMER: They're going to be shipping the grain out of Albany. Are they going to be bringing in empty ships or are they going to be filling them with their own machinery, their own fertiliser, their own chemical?
BRONWYN HERBERT: Mary Nenke and her family are fourth generation wheat farmers in southern WA who have also diversified into yabby farming.
MARY NENKE: These are business people, they're not there for our good, they're there for their good. In our patch there are people paying up to 17 per cent interest. These people will be, you know, it will be Chinese money, what interest rates will they be paying? When you can't compete in your own country what next?
WILL CROZIER: There's nothing to be afraid about. This is simply a new stream of capital coming in to rural Australia.
BRONWYN HERBERT: The Beidahuang deal like the Ord River expansion signed last year with a private Chinese firm are exactly what the WA Premier Colin Barnett and his ministry are promoting.
KEN BASTON, WA AGRICULTURE MINISTER: I believe that that investment, you know, employs people, employs jobs, it has regional development because they're obviously they're not city centric, they're out in the country so regional areas thrive with that capital investment there. And of course what we're actually doing is we're supplying the food chain of the world.
BRONWYN HERBERT: Bill Heffernan leads the Senate rural and regional affairs committee which has been investigating whether purchases like these are in the national interest.
BILL HEFFERNAN, LIBERAL SENATOR: It would be a great pity if Australia's farmers ended up as tenants and tenant farmers and unlike the prospect of capital growth to hand on to the family, only have the job to hand on and I guess there's a warning there.
BRONWYN HERBERT: At last count around 11 per cent of the nation's farmland was in foreign hands. But Bill Heffernan says no one really knows what the exact figure is, which is why it's crucial a foreign land registry is set up.
BILL HEFFERNAN: We need to do that and then we need to model that out for 20 or 30 years given the present law and the present practices and then say to ourselves "is that where we want to be in 20 or 30 years as a nation?" Because it's my view that under the present arrangements we are redefining sovereignty.
MARY NENKE: The thing is they're saying it's good for us. Would it be good if all our suburbs of the city were owned by China and then we were renting back the houses from China? That's exactly what it is. They're suggesting, and banks are suggesting this, that it would be better for farmers to sell their land and then rent it back.
BRONWYN HERBERT: For Will Crozier, it's the way of the future.
WILL CROZIER: Looking at substantial gains, we're looking at substantial markets coming in here. It's a great thing for Australia. I'm very, very proud to be a part of it.
LEIGH SALES: Bronwyn Herbert reporting.