Chinese farm land ownership up almost 1000pc

The second report by the Commissioner of Taxation on the operations of the Foreign Ownership of Agricultural Land Register was released by the Federal Treasurer Scott Morrison last week.

The first annual report underpinning the new transparency measures for foreign investment in Australian farming, introduced by the Coalition government - which shows aggregated statistics on foreign ownership - was unveiled in September last year.

It saw China come in at fifth position on the list of top 10 nations for ownership of Australian farmland, with 1.5 million hectares or 2.8 per cent of the overall total of foreign owned farmland in Australia.

But this year’s report shows China has climbed to second on the list of top 10 countries while the UK was again in first position.

According to the report, China’s volume of agricultural land in Australia has now rocketed to 14.4 million hectares.

Of the 13.6pc of all Australian agricultural land that’s held by foreign investors, the UK owns about 27pc and Chinese investors now own about 25pc - up from the 2.8pc in last year’s report.

“The UK remains the largest foreign agricultural land holder (2.6pc of agricultural land), followed by China (2.5pc of agricultural land) and the US (0.7pc of agricultural land),” the report said.

“There have been several large transactions which have altered the country of ownership of agricultural land.

“For example, the sale of S Kidman and Co to Australian Outback Beef has increased the level of Chinese ownership of agricultural land by 2.6 million hectares (0.7pc), as Chinese investors have a 33pc interest in Australian Outback Beef.”

According to the report, the definition of ‘foreign person’ includes entities with a level of foreign ownership of at least 20pc, so that the Register captures details of entities even when the majority of shareholders are Australian.

Overall, the Register showed foreign investors held 13.6pc of all Australian agricultural land as at June 30 this year; down from an adjusted 14.1pc on the same date last year.

The preferred means of agricultural land investment is through leasehold interests, with 81pc of the land interests held by foreign persons falling under that category.

The report also showed an increase of 44.9pc (3,968,000 ha) for foreign held agricultural land in WA - primarily due to new registrations of acquisitions of agricultural land that have settled since 1 July 2016.

But there have been decreases in foreign held agricultural land of; 33pc (2,360,000 ha) in SA; 10.8pc (1,910,000 ha) in Queensland; and 9.8pc (1,483,000 ha) in the NT.

Mr Morrison said the Turnbull government understands that trade and foreign investment creates jobs for Australians, “and always will”.

“At the same time, the Turnbull Government has taken consistent and determined action when it comes to ensuring foreign investment is not contrary to the national interest,” he said.

The Australian Taxation Office (ATO) administers the Agricultural Land Register and receives information directly from foreign investors who are required to register their interests under the new reporting regime.

The Register is available on the Foreign Investment Review Board’s website.

The total area of agricultural land in Australia with a level of foreign ownership has fallen from 52.1 million hectares at 30 June 2016 to 50.5 million hectares at 30 June 2017.

The proportion of agricultural land with a level of foreign ownership (foreign held) has fallen from 14.1 per cent (adjusted) at 30 June 2016 to 13.6 per cent at 30 June 2017.

Over 98 per cent of foreign held agricultural land is held within Australian incorporated entities.

Over 85 per cent of foreign held agricultural land is used for livestock purposes.

Mr Morrison blocked a $370 million proposed sale of Kidman and Co to Chinese dominated interests around last year’s federal election - while releasing the softer figures on China’s farm-land ownership mid-year - before approving a transaction in late 2016 headed by mining magnate Gina Rinehart, with a 67pc interest.

“I have decided that the acquisition of Kidman as proposed would not be contrary to the national interest and will be permitted to proceed," Mr Morrison said in a statement, approving the sale to Ms Rinehart's Hancock Prospecting and partner Shanghai CRED (Australian Outback Beef).

Queensland had the highest volume of farmland involving foreign ownership interests with 16,386,000 hectares, comprising 5,482,000 hectares in freehold and 10,903,000 hectares leasehold.

In comparison, Victoria had 665,000 hectares in total comprising 589,000 in freehold and 76,000 hectares in leasehold.

Measurements of foreign interests in agricultural land according to farm-use was dominated by livestock production with 42,954,000 hectares followed by cropping 1,639,000 hectares, forestry 1,422,000 hectares and horticulture 296,000 hectares.

But 3,204,000 hectares was categorised as “unreported” and 882,000 hectares as “non-farming”.

Australian Greens Senator and agricultural spokesperson Janet Rice said the creation of a foreign holdings register for both agricultural land and water rights was an important win for transparency secured by her party.

She said the release of figures from the second annual report last week allowed Australians to scrutinise the changes happening in the agricultural sector.

“It’s important for Australians to know how much of our land is in foreign ownership and how much is owned by large corporations so governments and the community can target the best mix of measures to support sustainable farming practices,” she said.