A quarter of Northern Territory pastoral lease land held by foreign interests

ABC | 16 September 2015

A quarter of Northern Territory pastoral lease land held by foreign interests, but local family-owned operations consolidating

By Carl Curtain
 
A quarter of Northern Territory pastoral lease land is now wholly or partly owned by foreign entities.

An ABC Rural investigation reveals the extent of the creep of foreign ownership in the Top End, particularly over the past three years.

Research also shows as large corporate firms make their move, family-owned operations are also strengthening their position with the purchase of valuable cattle country.

The United Kingdom and United Arab Emirates continue to hold significant areas of land, but a recent buy-up by investors from Indonesia and China has pushed up the foreign ownership percentage.
     
AUDIO: Paul Zlotkowski, Ian Baker and Tony Davis speak about foreign ownership.

Of the 223 pastoral leases, there are now 47 which have some form of foreign ownership, covering a land mass of 149,702 km2.

That equates to 25.1 per cent of the 596,310 km2 pastoral estate, which is 44 per cent of the Northern Territory's total land mass.

These figures are slightly higher than the 24.3 per cent recorded by the NT Department of Land Resource Management (DLRM).

ABC Rural understands there is at least one lease, owned by a New Zealand group, which has not been included in the DLRM calculation.

Indigenous land trusts account for the vast majority of the remaining land in the NT, and there are significant tracts of this country leased to local pastoralists.

There are also large blocks of free-hold land, some held by foreign interests, which are not included in the lease percentage calculation.

The 25.1 per cent foreign ownership rate surprised veteran cattleman Tony Davis.

However Mr Davis said there was nothing to fear from international funds flowing into the beef industry.

"We've had so many overseas companies buy this country, but very few stay for more than ten years, twenty years maybe maximum," he said.

Recent purchases by foreign entities

    Wollogorang - TGB Agri Holdings, China - July 2015
    Bunda - Consolidated Pastoral Company, United Kingdom (various) - February 2015
    Elizabeth Downs - Sichuan Yin Xiang, China - September 2014
    Willeroo - Great Giant Livestock, Indonesia - April 2014
    Amungee Mungee - RB Retail Capital, Singapore (various) - March 2014
    Labelle & Welltree - Australian Agricultural Company, United Kingdom (various) - October 2013
    Riveren & Inverway - Japfa Santori, Indonesia - October 2013
    Tanumbirini - Thames Pastoral, United Kingdom - February 2012

"They put money into the industry which a lot of us find hard, as in we don't have the funds to do it.

"The more the merrier, join the party, they can't take our land."

Mr Davis recently sold Moroak Station, at the southern edge of Arnhem Land, to an Australian family.

He said he hosted a potential Chinese buyer at the station for an extended period prior to the sale.

"I think it was more them trying to learn what was going on up here, putting their toe in the water," he said.

"Everything looked pretty good until it came to signing on the line."

Big agri-business players in the north, backed by foreign money, include Australian Agricultural Company which holds twelve leases, Consolidated Pastoral Company with eleven, and North Australian Pastoral Company which has seven leases.

Smaller players include Thames Pastoral Company, Japfa Santori and Paraway Pastoral, which each hold two leases.

Companies that have been invested longer term with only one lease, include Oceanic Cattle Stations from Indonesia, Shoujaa from the United Arab Emirates, along with the Malaysian Taimatsu and Sarawak Economic Development Corporation.

There is investment also in other leases from firms based in Singapore and Switzerland.
Pastoralists back foreign investment; 'the more the merrier'

Wollogorang Station, stretching 5,762 square kilometres in the Gulf of Carpentaria, was bought by Chinese-backed TGB Agri Holding in July this year.

Former owner Paul Zlotkowski, who was reportedly paid $47 million for the property as well as adjoining Wentworth Station in Queensland and 40,000 head of cattle, has no qualms about selling to a foreign entity.

He said several would-be buyers were interested in the station, including a Filipino businessman, before it was sold to the Chinese company.

He said the sale continued a long-standing trend of international money injected into the pastoral sector.
NT land use
Photo: Pastoral leases make up 44 per cent of the Northern Territory's land mass. Pastoral leases coloured yellow. Indigenous land coloured in blue. (Supplied: DLRM)

"I remember when I was in my 20s, Sir William Gunn was peddling all this northern country to the Americans," he said.

"People were horrified that the Americans were buying all this land and they'd own all of Australia.

"So what? What does it matter whether the Americans own it, or the Pommies own it, or the Chinese?"

"Not one of them, not even Lord Vestey, took a grain of dirt back to England, and he certainly didn't take any cattle stations back there."

The Federal Government now requires all purchases of Australian agricultural land by overseas-based groups, greater than $15 million, to be approved by the Foreign Investment Review Board (FIRB).

Some have criticised the changes, including the Consolidated Pastoral Company, suggesting the process hampers the ability to make a quick purchase in the face of competition.

Mr Zlotkowski said he was not aware of any added delay in getting the sale of Wollogorang through the FIRB.

"It was not indicated to me that it was any problem, we just got approval," he said.

"The more difficult part was for the Chinese purchaser to get the money out through his own government.

"He said all along that he had to get Chinese Government approval to get the money out of the country."

While large scale cattle grazing has long been attractive to those buying land in the north, more recently it appears broadacre agriculture is what investors are seeking, particularly those from Asia.

Agricultural scientist, turned farming consultant, Ian Baker has been contracted by the Sichuan Yin Xiang Group, to develop a cropping plan for Elizabeth Downs Station.

The property, which spans 2,054 square kilometres south west of Darwin, was bought in 2014 with the intention of growing beef and food to export back to China.

Mr Baker, who has spent nearly forty years in the Top End and is an advocate for developing northern Australia, said investment dollars were greatly needed, regardless of where they came from.

"All they can take [home] is the profit, and the profit is only about ten per cent of the total turn-over," he said.

"If you've got a business turning-over $3 to $5 million, they might take away $300,000, but there's $3 to $4 million floating around in our economy that they don't take away with them."

Mr Baker said he was more concerned about how the foreign-owned investments would be developed.

"Getting the investors to understand the local situation, the business that they've invested in and how they manage that is a big problem," he said.

"It takes a long time to build a relationship where each trusts the other and each understands the other.

"Some of these guys have made a billion dollars in a lifetime... so when they come here and we say 'look take it steady', they don't understand what we're talking about."
Family beef producers repositioning, particularly in Central Australia

Despite the increase in corporate-owned pastoral leases, both foreign and Australian, further data collated by ABC Rural indicates the family farm is very much surviving the onslaught.

Of the 223 Northern Territory leases, 141 could be classed as family-owned versus the 82 which are run by the high end of town.
Embed: Family farming versus corporate farming in the Northern Territory

In Central Australia, the region south of Tennant Creek, family-owned businesses dominate the cattle industry and several families have recently consolidated their holdings.

Cattleman Tony Davis has sold land in the north of the Territory to buy more country (five leases) in the drier southern climate around Alice Springs.

He told ABC Rural there had been a decline in family-run stations generally, but he expected the vast majority of Central Australian property to always be locally owned.

"From the company point of view, there's this fear of drought which is always there, or lower rainfall," he said.

"Companies have never really gone south of Tennant Creek and that's how they operate.

"The hardest thing for families today, is the kids are not prepared to do the work which is involved, so the properties are being sold.

"It is so hard for young ones to start off, to get the money to take the family property over, which leads to companies taking the land over."

A spokesperson for the NT Department of Land Resource Management said it maintained a list of known foreign interests in the NT pastoral estate.

"This information is reliant on the compulsory provision of ASIC searches during a pastoral lease sale/transfer, and periodic ASIC searches conducted by DLRM," a statement read.

"The Federal Government has announced that from 1 July 2015, foreign persons and foreign government investors holding interests in agricultural land must register those interests with the Australian Taxation Office (regardless of value of that land) and existing holdings must be registered by 31 December 2015.

"This register will be the public record of foreign owned land and assets."

The Australian Wildlife Conservancy (AWC), which owns three pastoral leases, told ABC Rural the group was 100 per cent Australian-owned, and received donation income of less than two per cent from overseas.

ABC Rural did not classify the AWC leases as foreign-owned.

ABC Rural research for this project involved contacting pastoral lease owners and managers throughout the Northern Territory, sourcing information from agribusiness representatives, real estate agents and land valuers, running land title searches on a number of leases, and cross-referencing data with the NT Department of Land Resource Management.