NFF: foreign ownership register “good blunt overview” but better data needed

NFF: foreign ownership register “good blunt overview” but better data needed


Farm Online News
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​FARMERS aren’t shocked by the latest foreign investment figures showing a ten-fold increase in Chinese ownership of Australian farmland

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FARMERS aren’t shocked by the latest foreign investment figures showing a ten-fold increase in Chinese ownership of Australian farmland, driven largely by the huge Kidman and Co cattle company transaction.

But the new register, implemented by the Coalition government to improve transparency for foreign ownership levels, remains a work in progress and requires better data in order to assess potential risks, says National Farmers’ Federation CEO Tony Mahar.

Mr Mahar was speaking in response to the second report released by the Coalition government on the operations of the Foreign Ownership of Agricultural Land Register.

The first report released in September last year had China fifth 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 showed China had climbed to second on the list with 14.4 million hectares or about 25pc of the total land held by foreign investors, behind the UK with 27pc.

“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.

Mr Mahar said the second report released last week didn’t set off any “alarm” for the NFF’s members, due to the higher level of Chinese ownership it reported.

“We know foreign investment goes between countries whether it’s Chinese, the UK, Japanese or Canadian,” he said.

“There’s always been a mix of countries investing in Australia - it just happens to be there’s been a ten-fold increase in Chinese investment but we know that’s largely driven by the Kidman property and again that company has a percentage of domestic and foreign ownership, which is largely Australian owned (67pc).

“People knew that it was coming with the sale of the Kidman and Co property, which is one of the biggest, if not the biggest, landholding in Australia so it was always going to influence the numbers on the register.

“We were certainly expecting something like that and weren’t quite sure exactly where it would place the Chinese investment.

“But it also saw a readjustment in the numbers - down marginally from 14.1pc to 13.6pc - for the total percentage of all Australian farmland that’s owned by foreign investors.”

Mr Mahar said foreign investment was an issue the NFF observed persistently and understood it was an important issue for the sector to manage; hence the need to enhance the Register’s transparency value.

National Farmers’ Federation CEO Tony Mahar.

National Farmers’ Federation CEO Tony Mahar.

“We want to make sure there’s continued investment in Australian agriculture not only from domestic investors but also foreign investors and we know agriculture has such a huge bright future so we need investment to allow us to take the next steps,” he said.

“But equally we want to make sure that we understand where the investments are coming from and what impact and influence those investments are having across the supply chain.

“This register is a really good start for improving transparency but we need to continue looking at the data, to make sure we’re having an informed discussion.

“For me, the numbers on the Register have always been a start and we need to understand and perhaps use it as a bit of a platform going forward to get more insightful data.”

Mr Mahar said the report currently showed the total number of hectares of Australian farmland under foreign ownership, but more strategic information and data was needed, to assess risks.

“We need to understand what the level of ownership is, where along the supply chain it exists and what risks it imposes, if any,” he said.

“This report is a good blunt overview of the landmass but in terms of either control or influence or impact on the supply chain or sector itself we need more data and numbers to give us a better and fuller picture.

”The more we know about the actual investment the better the data and the better we can make informed decisions and have informed discussions.

“It’s always going to be an emotive topic, foreign ownership of Australian farm land – but way back in 2012, when we were calling for this register, it was always about getting better data so we can have an informed discussion.”

Assistant Trade and Investment Minister Keith Pitt said the first aspect of the new report that needed to be recognised was that it showed that the overall level of foreign ownership had actually decreased by 1.6 million hectares, over the past 12-months.

“There was a very large purchase of Kidman and Co which of course will make a big difference in terms of the register when you’ve got Chinese investors that have a 33pc stake in such a large purchase of farmland,” he said.

“But the other point that I want to make is, nobody else put this register together - we did it - and without a Coalition government you wouldn’t even know the numbers and there would be lots of guessing.

“There is a state register in Queensland but this is the first time there’s been a national register with some facts and detail around it.”

Mr Pitt said Australia continued to be an attractive destination for foreign investment in agriculture due to being viewed as a “safe and stable nation”.

Assistant Trade and Investment Minister Keith Pitt.

Assistant Trade and Investment Minister Keith Pitt.

“We’ll always make decisions which are in the national interest that’s why we have the Foreign Investment Review Board (FIRB) – that’s why we have a cap at $15 million for agricultural land (to trigger FIRB scrutiny),” he said.

“We do need investment and worldwide investors recognise Australia produces clean, green and safe produce and they all want to be a part of that.

“You only have to look at the ABS stats for farm gate production - record levels for agricultural production in Australia - and the overwhelming majority of that is exported.

“There will always be changes in the actual ownership levels because businesses change hands and companies change assets, depending on what they’re up to.

“They’re private investors and that’s what they do – but I think the level of foreign ownership will continue to fluctuate because that’s just the nature of business.”

Mr Pitt said he’d recently returned from a trade and investment delegation to Saudi Arabia where there was “extensive interest, especially for vertically integrated assets in Australia – from farm gate production right through to final processed and manufactured food.

“Those are the sort of assets they’re looking to get involved in but the key is, getting the right investment vehicle,” he said.

“When you look at the Kidman and Co sale, FIRB opted not to back it the first time around but then the structure was changed and it was approved as a joint-venture.

“And that’s a good vehicle for investment in Australia where we have a good joint venture partner of varying percentages but most of these companies, we have to keep in mind, are registered companies in Australia.”

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