Stock & Land | 27 March 2011
World food security fears may be driving the foreign rush to buy Australian farmland and agribusinesses, says Nationals' leader, Warren Truss.
Food security was literally a matter of life and death in some countries, he said.
His party led a Coalition victory in Parliament last week to uncover the extent of foreign ownership in Australia.
"Anecdotally, we hear that foreign interests - both government and privately owned - are targeting farms in Australia to shore-up their own food security.
"Foreign takeovers of Australian agribusiness have increased ten-fold since the election of the Rudd/Gillard Government.
"In many sectors Australia has already lost effective control over its food supply chain and decisions about our food supply are being made in foreign boardrooms.
"In the wake of such developments, it is only reasonable that Australians be fully informed about the impact foreign ownership may have on our farm sector, food supplies and consumer prices.
"As a community we are entitled to know exactly what's going on in our own backyard."
In Federal Parliament last week the Coalition's agriculture spokesman, John Cobb, successfully moved that the Australian Bureau of Statistics, with the assistance of ABARES and the Productivity Commission, compile data and analyse foreign ownership of agricultural land and agribusiness.
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Everyone wants a slice but there's plenty left
Brisane Times | March 27, 2011
by Clancy Yeates
There's a curious double standard in our exploitation of the resources boom.
When mining companies rake in top dollar for their exports, there are high-fives all around. Economists marvel at the growth bonanza, politicians boast about job creation, and shoppers cash in on the soaring dollar.
But it's a different story altogether when the rest of the world takes a more active interest in our agricultural wealth.
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A wave of takeovers in farming and agribusiness in recent years has unleashed a shrill campaign about foreigners ''buying the farm''. The outrage has been just as palpable when, heaven forbid, Australia gives a bit back to our trading partners by buying produce from overseas.
Some recent examples show how far the hysteria has come: remember the outcry when the first shipment of ''Great Wall'' apples arrived from China this year?
Earlier this month, the Queensland farming lobby Growcom even grabbed headlines warning of sausage sizzles without salads after it published a report claiming some fruit and vegetables could simply vanish from shelves by 2050. How could this be? Because, the report argued, we now import a third of fruit consumed and a fifth of vegetables, and these imports could one day ''disappear'' as foreign countries withheld stock to feed themselves. This is despite the fact close to 98 per cent of the country's fresh produce is grown here.
And as with any good scare campaign, fearmongers have managed to drive the issue onto the kitchen table, quite literally. Thanks to recent food price spikes, critics now invoke ''food security'' - the country's ability to feed itself - in just about any dispute involving food.
Queensland's opposition, for instance, says food security is at stake as part of its campaign to eradicate the Asian honey bee. Last week the MP Bob Katter cited the nation's ability to feed itself at a rally against the potato chip maker McCain. And it's not just mavericks like Katter - the federal opposition is criticising foreign investment laws for their failure to address food security.
Tabloid papers have also leapt into action with a flurry of stories about Chinese ''buying up our farms'', based on little more than quotes from disgruntled rural MPs and anecdotal evidence. The Labor MP Andrew Leigh recently observed the irony of this in Parliament - a US citizen, Rupert Murdoch, owns most of these papers.
But this contradiction aside, just how much basis is there to claims we are ''selling off the farm''?
No one doubts there are unprecedented pressures on global food supplies, and this is driving up prices. Last month the United Nations said world food prices hit a fresh record, and predicted more rises this year.
And as one of the world's top producers of food, Australia is undoubtedly on foreign investors' radars. Investment in farms approved by the Foreign Investment Review Board surged to $2.5 billion in 2008-09 and $2.3 billion 2009-10, about eight times more than the average for the rest of the decade.
But while these numbers seem huge at first, a closer look at the evidence shows much of the current hype is based more on fear than fact.
Latest figures from 2007-08 showed 99 per cent of Australian grain and dairy farms were small and family-operated. And foreign investment in farming is still a far cry from activity in most other sectors. Last financial year, the $80 billion in foreign mining investment was nearly 35 times more than the amount ploughed into farms. Manufacturing, services, real estate and finance also attracted far more foreign cash than farming. Claims that China is buying the farm also unravel when you look for proof.
The ANU economist Professor Peter Drysdale says Chinese investment worldwide in agriculture was $US3.4 billion over the past five years, a fraction of its total investment of $US216 billion. Most of these Chinese farm buyouts were in Africa and Latin America.
Australia has indeed entered China's sights - but most of its $US34 billion invested here during this time has been in mining. FIRB did not approve a single Chinese investment in agriculture last year - the biggest players were the US, Britain and Malaysia.
There is an information gap, however, because some purchases slip under the statisticians' radar. Deals where the price is less than $231 million escape the watchdog's approval (unless it is a state-owned company) and this is the basis for much of the populist outrage.
But as Drysdale told some nervous farmers in Canberra this month, Chinese forays into farming have mostly been small-scale joint ventures or partnerships, and the investors were private operators. He concedes that yes, part of our trading partners' motivation for investing is to firm up their supply lines. As the world's biggest economy develops, its people are simply demanding more food than it can produce. However, trade partners taking a stake in local producers is nothing new - and should not be seen as a threat.
Japan, for instance, followed a similar path in the 1980s and early 1990s, swallowing up brands such as Fountain tomato sauce, Gravox and Saxa Salt. Japanese investors also amassed stakes of up to 10 per cent in cattle yards in NSW and Queensland, sparking a backlash from farmers. But as it became clear the sky wasn't falling in, the hysteria faded.
As for food security, there are two key reasons to be sceptical when you hear someone claim Australia's ability to feed itself is under threat from foreign investment. First, the country still exports far more than it imports - by a margin of $14.2 billion last financial year. And second, as Drysdale points out, farmers here depend on feeding the world for their own financial security. More Chinese investment - within reasonable bounds - can help give them a lucrative piece of the action feeding the world's biggest population.
