IT’S rather fitting that the debate about foreign ownership of Australian farm land has reached its hottest point as we enter 2012, the Year of the Farmer.
As with any "year of" – the key intention is to make something front of mind. I know in 2008, the International Year of the Potato, I certainly thought quite a bit about this starchy gift. I definitely had mash more often than I usually would have.
It’s fabulous that this year is for farmers, and it’s fitting that we think about food production and agriculture in relation to this continent and its resources.
What the recent ABARES report Foreign Investment in Australian Agriculture revealed – that 99 per cent of the agricultural sector’s assets remain in Australian hands – should have done a lot to ease anxieties. Add to this the fact that while foreign interests can pay to work parcels of land, they sure can’t take it with them. But still concerns linger, and this is because of the government’s failure to address reservations which simply grow larger with neglect.
A significant failing of the report is not taking an opportunity to vanquish the xenophobic elephant in the room. In 1983–84, the United Kingdom and the United States were known to be by far the largest foreign landholders, accounting for 70 per cent of foreign-owned agricultural land in Australia. The 2011 survey did not collect information on the nationality of foreign owners. But it should have. Such details would help sooth the marginal but significant racial element of this debate, and play a part in vanquishing images of the hungry hand of China’s millions reaching out for Australian food.
The report notes that for an investing country to make direct shipments of produce from one or a few farms would be an expensive and unusual way to move produce abroad. Indeed, research concludes that “evidence for the perception that China supports Chinese enterprises to acquire land abroad as part of a national food-security strategy is highly questionable.”
Currently up for sale is the 18,000 ha Tasmanian wilderness estate of an eccentric American who bought the land to escape the nuclear threat of the Cold War. He had clearly seen On the Beach a few too many times, but this man embodied the exception to the foreign investment rule. For the most part, the investor is unaware of the emotional and highly-politicised debate underway in Australia. Australia has a sophisticated agriculture sector, and for the UK, American, Chinese and myriad other interests in local farmland, the decision to place their money here is purely pragmatic – it’s a good investment.
What is always important to consider is what the buy-up of farmland means for the farmer. It is not within the distorted parameters of fear that we should be having this debate, but in the cold light of logic.
Foreign investment is a fact of the business side to agriculture, and it really doesn’t matter from whence investment comes. What does matter is how it fits within the balance of existing farming communities. What was not in ABARES’ report was a sociological survey of community life in places where a foreign entity has significantly changed the balance of farm ownership.
If we’re honest, the idea of Australian farmland in foreign hands, be they American or Chinese, is often what irks the most. There is a perception, not without some basis, that foreign ownership means management changes and a diluted interest in the welfare of land and communities. But given the scale of foreign investment in Australian farmland (tiny in the scheme of things), and the conditions which come with it, it’s unlikely there will be many accounts of the fabric of a farming community deteriorating due to foreign investment.
Indeed, agriculture is a lengthy commitment and it’s doubtful there will ever be the scale of detached involvement which has created the fly-in fly-out mining town dilemma.
The fact that the foreign investment issue is in the spotlight is good for farmers, but it is plainly obvious that there is more to disclose, and it’s difficult to understand why the government resists addressing this.
The reality is that foreign investment in farmland does not need to stop, indeed it brings with it a long history of economic benefits. It is also currently responsible for bolstering rural land prices, which is largely a blessing – though it does pose difficulty for the young farmer looking for a new base.
What has everyone concerned is the government’s shock move last week to elevate – and not lower – the trigger for Foreign Investment Review Board (FIRB) scrutiny from $231 million to $244 million.
Farm groups have described the move as “the ultimate betrayal of regional Australia”. It is a correction in this realm which should be part of a concerted push in this, the Year of the Farmer.
While New Zealand has just given the green-light to the controversial $210 million-plus Shanghai Pengxin bid for 16 Crafar farms, its farmers sleep a little more soundly knowing that any purchase of a parcel of non-urban land of 5ha or more is defined as sensitive and falls under the Overseas Investment Act 2005.
Australia’s $244 million trigger seems an extraordinarily arbitrary and inadequate amount, and one which pays little respect to the farmer’s right to be informed about agriculture’s economic landscape. It’s time to lower the amount to something which keeps the government’s finger better on the pulse and allows the lights to be shone on agricultural FDI, if only to show that there is no bogeyman hiding in the dark. That, after all, is what the farmer deserves.
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