A FOREIGN ownership audit of Australian farmland and water is needed urgently say the federal parliamentarians responsible for a two year inquiry into the nation’s food production capabilities.
Their findings, compiled in a weighty 98-page report, have emerged just as public outrage erupts across the Tasman in New Zealand where a Chinese company wants to take over 16 dairy farms in one fell swoop.
The bid by Hong Kong-based Natural Dairy Holdings has prompted the formation of a powerful NZ lobby group, Save the Farms, which wants an immediate moratorium on farm sales to foreign companies.
Questions are also being raised about whether the Chinese company’s earlier acquisition of four NZ farms complied with existing overseas investment rules.
Like Australia, the NZ Government initiated a review of foreign ownership policy more than a year ago, but the report is yet to be completed.
The Australian Senate’s Select Committee on Agriculture and Related Industries found that under existing investment regulations it was possible for overseas companies to buy up an entire district, farm by farm, without ever coming to the attention of the Foreign Investment Review Board.
Its report emphasised the need to audit ownership by sovereign and part-sovereign owned companies, noting in some countries the distinction between governments and companies was not straightforward.
Foreign investors are currently not required to notify the government unless their acquisition exceeds 15 per cent of a business or corporation whose Australian interests are valued above $231 million, or where the investment is made by a foreign government.
But foreign buyers need not disclose incremental investments exceeding the threshold amount in aggregate.
“The committee also notes the marginal viability of agricultural production and the difficulty for potential young farmers to enter the sector, due to high land prices which combine to leave agricultural production vulnerable to structures that are less desirable than traditional family farming,” the report stated.
“More significantly, though, Australia risks foreign companies, many with close ties to their home governments, purchasing substantial strategic interests in Australian land without needing to be vetted for national interest concerns.
“Australia needs to be careful (its) productive capacity is not undermined by foreign interests producing food on Australian land that is not intended for trade, but for direct supply to countries that have not managed their own food security needs.”
Earlier this year, NZ Prime Minister, John Key, said he was “genuinely worried” about large foreign purchases of farmland and the prospect of New Zealanders becoming “tenants in their own country”.
NZ’s Federated Farmers is also fighting the Chinese dairy takeover, with president, Don Nicolson, saying the 16-farm former empire of dairy magnate, Alan Crafar (now in receivership), should not be sold to China unless NZ investors could buy land in China.
At present, NZ can only lease land in China.
The Crafar farms carry about 25,000 cows and are spread from NZ’s Waikato to the King Country, Bay of Plent, Wanganui, Taranaki, and Rangitikei regions.
Natural Dairy vice chairman, Graham Chin, was confident his company’s purchase offered the best deal to the receivers and creditors.
The buy up was also good for NZ “in terms of more jobs, increased export revenues, taxation and an overall boost to the agricultural sector and rural industries”, he said.
Among the other Australian Senate committee recommendations, after examining 162 submissions, were having the Rural Industries Research and Development Corporation (RIRDC) report to the Senate on the current level of agricultural research in OECD countries as a percentage of GDP and the trend for investment in the past decade.
The committee also recommended its role be reinstated in the new federal parliament to further examine issues relating to food production.
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