THE impact of foreign investment into Australian agriculture resurfaced in headlines this week - this time both here and overseas.
Firstly, a Senate committee inquiry uncovered serious shortcomings in the framework for foreign investment into the nation’s agriculture, with Nationals Senator Fiona Nash calling on Treasurer Chris Bowen to strengthen rules. The inquiry raised apprehensions on the lack of detailed information surrounding acquisitions, suggesting the threshold for investments be dropped from $248 million to $15m – anything higher warranting a review from the Foreign Investment Review Board (FIRB).
Reuters UK soon afterwards published an online article about the inquiry, under the headline ‘China fears may see Australia tighten scrutiny of farm sales’.
This followed the recent Lowy Institute Poll released in June that surveyed more than 1000 voters earlier in the year. It found 56 per cent of those surveyed were concerned over Chinese buying assets from farmland to listed companies.
The Wall Street Journal’s online Asian edition published on article in response titled ‘Australian nervous over China investment’.
And today a senior Chinese trade diplomat has come out in Australian media expressing concern about Australian attitudes to investment from the Asian country - arguing that China's local business interests were smaller than those from the US, Britain and Japan.
The news of Australia’s discriminatory or racist attitudes should send alarm bells to some farming leaders, who are relying more heavily on China as a major importer of Australian food into the future.
In the last financial year alone, beef exports to China increased by 1093 per cent, and a strong trade relationship is required for this growth to continue.
The sensitive issue also emerged at the Victorian Farmers Federation’s (VFF) annual conference in Melbourne last week.
After a heated debate surrounded a resolution calling on the VFF to actively oppose foreign ownership of Australian farming land, members voted against the motion.
The outcome frustrated West Goulburn branch member and crop farmer Wade Northausen, who put forward the resolution.
“Australian farmers need to be given a chance,” he said.
“When we fire-sale off our assets, then we are in a great deal of trouble.”
Camperdown producer Les Mulholland also had an opinion about foreign investment.
On the one hand he said there were dairy farmers in south-west Victoria that has “gotten themselves so deep into a hole” and the Chinese were able to help them out of the situation by way of investment.
On the other hand, he said food security was essential for Australia.
“In Africa they produce fives time the amount of food for every man, woman and child, but there are people still starving,” he said.
“And that’s because China owns the best land in Africa and the food goes back to China. They are taking over.”
Mr Muholland also pointed to Victorian Agriculture Minister Peter Walsh’s goal to double food production in the State by 2030.
“We can’t just double food production, I believe we can five-fold it or more if we make the soils healthier,” he said. “But where is the incentive from the government or anyone to do that?”
He said most primary producers here were “working their guts out” and not receiving a profitable return for their efforts.
“When things are tough, they (overseas investors) are going around and snapping up the bargains and that’s why the VFF should stop it,” he said.
Gippsland dairy farmer Alex Arbuthnot disagreed.
He said Australians needed to recognise the country’s agricultural industries functioned in a global market.
“We do operate in a global world and if we don’t think we do, we ought to get our thinking in that way,” he said.
“There is no doubt in my mind that if we are going to double the production and value of food in this country, we will need overseas investment.”
He said he was delighted to hear of the redevelopment of the old Bonlac dairy factory at Toora, which saw Funton Holdings establish an infant milk formula production facility to supply the Chinese market.
“I got a little bit excited that out of the whole world, the Chinese decided to pick Gippsland to invest in. That is a healthy sign,” Mr Arbuthnot said.
“And I do note that all the farmers up and down our road that have a ‘For Sale’ sign up hope that somebody from China buys it.”
He added his opinion that the next generation of farmers see themselves as land managers.
“The farmers of tomorrow will be professional managers and who owns the land is not that important,” he said.
Birregurra farmer Alan Bowman also revealed that he appreciated the emotion surrounding the issue, but the reality was Australian was “crying out, pleading for investment capital”.
“They (investors) can’t take the land home with them, so I’m not too sure what everyone is worried about,” he said.
“The issue needs to be managed and controlled, but if we turn our back on foreign investment into agriculture, we will all be worse off.”
United Dairy Farmers of Victoria (UDV) president Kerry Callow said raised the issue of VFF members opposing Chinese investment, in comparison to all overseas investment.
“If we actively oppose Chinese investment - and that is all I’ve heard today - if that is what you mean, then put the right resolution in,” she said.
Ms Callow highlighted the benefits of the New Zealand investment into the local dairy farming industry.
“In terms of the dairy industry, would we oppose the investment the NZ farmer has put into Australia when they came out in bulk numbers and bought Australian land?” she said.
“Frankly, their investment was welcomed at the time and it is currently missed in the south-west, because they are no longer buying in the numbers they were a few years ago.
“We need investment in agriculture and these guys are prepared to invest.”
She suggested a bigger threat might be losing control of the manufacturing sector.
Balmoral branch member Michael Craig asked whether the VFF needed to take a different path, rather than opposing foreign investment of Australian farming land altogether.
“Is this really about retaining ownership and control of our assets?” he said.
“Should the VFF be looking at a model where Australia retain 51pc of assets?”
The VFF reiterated its position on the issue, saying they are pushing for the FIRB threshold to be reduced to $10m.