Ownership fears played down
Myths about foreign investment in Australian farmland need to be dispelled to change public perception and continue growth of the sector, according to speakers at a recent Institute of Agriculture forum.
The foreign ownership of Australian agricultural land and agribusiness: challenges and opportunities forum at the University of WA last week attracted more than 50 industry representatives and growers.
Keynote speaker Australian Farm Institute executive director Mick Keogh spoke about the domination of foreign ownership in Australian agribusiness, particularly food processing companies.
He said this mirrored other parts of the Australian economy.
"The agribusiness sector is dominated by foreign companies," Mr Keogh said.
"While some may express concern about this, it is worth noting that the same situation applies in many other sectors of the economy, such as the automotive and mining industries."
Mr Keogh said it was extremely difficult to pin down the exact amount of foreign investment in Australian agriculture because there were no clear indicators.
He cited a recent ABARES report that looked at ownership in different sectors of agribusiness. This showed a clear trend of growth of an already foreign-dominated sector but Mr Keogh said the nature of the survey was anecdotal rather than qualitative.
Australian dairy, sugar, vegetable, grain, beef and poultry processing sectors all showed more than 50 per cent foreign ownership.
He also talked about the risks associated with foreign ownership of Australian farmland.
According to the Australian Bureau of Statistics' latest estimates, about 11 per cent of Australian farmland has some degree of foreign investment.
Mr Keogh said the fear that foreign companies would directly ship Australian-produced food to their countries was completely irrational since Australia exported most of its produce.
He said the link between foreign ownership and imported labour was not as strong as public perception suggested because owners mostly wanted Australian farm managers and workers with experience on the land.
He said Australia's farm sector benefited from international investors pouring money into infrastructure as well as research and development
Mr Keogh said that there were more risks associated with foreign investment in agribusiness than in farmland.
"The risks arise not so much from foreign agribusiness ownership but from the monopoly, or near monopoly, control of a crucial asset or business in a supply chain," he said.
"This creates and opportunity to take advantage of the resulting market power by increasing fees and charges, or paying lower prices for agricultural commodities."
He shared the view of other speakers that the often emotional debate around foreign ownership of Australian farmland was unjustified.
Mr Keogh concluded that there was a lack of transparency around foreign farm ownership, which could be improved by government policy and open public discussion.
Pastoralists and Graziers Association president Rob Gilliam spoke about the public perception of foreign ownership, which in his view required a paradigm shift.
"The question is: how should we be working more with foreign investors to encourage more investment?," he said.
"Our challenge is to reorientate our thinking towards foreign investment."
Like Mr Keogh, Mr Gillam said it was difficult to determine the differences between risks associated with foreign investment in agriculture and in other sectors of the Australian economy.
WAFarmers president Dale Park addressed the forum about the public debate around foreign investment in Australian agriculture.
He said such debate was operating in a "fact-free area" and there was no way of really knowing the extent of foreign investment in Australian farmland.
"We've got a lot of heat being generated in the environment but not a lot of light," he said. "I think as far as WA farmers go, we've got a lot bigger problems out there than foreign investment."
Bruce Rock farmer and Nuffield scholar Michael Foss provided an insight into the experience of WA farmers with foreign investment.
Mr Foss spent time in the UK, US, Canada and Europe looking at factors affecting levels of corporate investment in farmland.
He said Australia was an easy place for corporates to invest because of its ownership policies and encouragement to the sector.
But he said corporate investors were attracted to countries with higher productivity.
Mr Foss welcomed foreign investment in agriculture.
"Any investment in Australian agriculture would be beneficial because it is starved of capital," he said.
"And any investment that can help reduce production risks to farmers would be a good thing."
Duncan Calder, of the Australia-China Business Council, spoke about Australia's opportunity to capitalise on the growth of China.
He said dairy farmers in particular had an opportunity to sell their milk and cattle to China.
"Dairy is an area where Australian producers have a key role," he said.
"Since the Chinese milk scandal, food safety is front of mind for Chinese consumers who are willing to pay a premium. There are great opportunities for Australian dairy producers to sell more milk to China."
He said China was importing 100,000 of Australia's dairy herd this year alone.
"We are just scratching the surface of Chinese investment," Mr Calder said.
The risks arise not so much from foreign agribusiness ownership but from the monopoly, or near monopoly, control of a crucial asset or business in a supply chain.
AUSTRALIAN FARM INSTITUTE EXECUTIVE DIRECTOR MICK KEOGH
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