AAP | 12 April 2011
by Ed Logue
Australia is "asleep at the wheel" when it comes to foreign companies buying important agricultural land and greater scrutiny is needed, farmers say.
A parliamentary committee is examining a bill which would force foreign investors to notify the treasurer if they wanted to buy more than five hectares of agricultural land.
West Australian Farmers Federation president Mike Norton said greater scrutiny of foreign companies buying agricultural land was necessary for food security in the national interest.
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Investments by offshore companies to buy agricultural land under $230 million do not require a formal application through the Foreign Investment Review Board (FIRB).
"You could just about sell off the whole of the West Australian agriculture sector and not trigger the interest of the Foreign Investment Review Board," Mr Norton told a Senate Economics Committee inquiry on Tuesday.
"There needs to be greater transparency in the application and successful bidding for future ownership of land.
"As a country we are basically asleep at the wheel ... as far as agriculture is concerned."
Mr Norton said the rules created by policy-makers have stacked the odds against local farmers.
"We let investors come in and buy a finite resource and we encourage them but they don't have to endure the same rules where they come from that we inflict upon own farmers," he said.
The change to more free-market trade policies has not been a boon for the rural sector, Mr Norton said.
"We are getting let down very, very badly by states and commonwealth governments and politicians as far as agriculture is concerned," he said.
"We have had dry economic rationalists and accountants in the bowels of Canberra dictating policy to agriculture for possibly 20-odd years now."
Earlier the inquiry heard that foreign investment could be hampered by the move to introduce another national-interest test for the purchase of rural land in Australia.
There is an existing national interest test for proposed foreign purchases of agricultural land.
Department of Treasury senior adviser John Hill said the bill would mean investors would face two tests which could create confusion and hamper investment.
"We have got one national interest test that will apply to agricultural land and we have got another national interest test that will apply to everything else," Mr Hill told the inquiry.
This dichotomy could hamper investment as potential investors would be unsure about their standing, he said.
"There can be situations where there might be an overlap for investors such that it's not clear to them which tests apply," Mr Hill said.
The principal adviser to Treasury's foreign investment and trade policy division, Frank Di Giorgio, said the proposed bill could also change the classification for rural land.
"It also risks elevating the sensitivity of agricultural land applications to a level above that of all other forms of investment, which might be problematic from an investment encouragement perspective," Mr Di Giorgio said.
"The dual national interest test also potentially reduces flexibility in assessments.
"We also observed that the regulatory changes proposed could cut across the standstill provisions that Australia has incorporated into its various free-trade agreements."
