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Ownership fears wane

Melissa WilliamsCountryman
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Overseas investment in WA's agriculture sector appears to be centred on returning profits for international backers, rather than ensuring food security.

But this is expected to turn around in the longer term.

The latest ABS survey of foreign ownership estimates 89 per cent of Australia's 353 million hectares of agricultural land is locally owned and 45 million hectares has some degree of foreign ownership.

The ABS estimates 3.1 million hectares of WA's 117 million hectares of agricultural land has more than 50 per cent foreign ownership.

Gordon Verroll, of WA-based agricultural management company Corporate Agriculture Australia, said the bulk of overseas land ownership in this State was in the North West, where US and UK interests had bought many cattle stations.

Mr Verroll estimated that only one to 2 per cent of WA's arable land was owned by foreign investors and the rate of land uptake by international buyers had been steady in recent years.

But Mr Verroll said that in the future, broader-scale investment in WA agricultural land from overseas interests could grow as many net food importing countries sought to secure food supplies.

Mr Verroll said, at present, overseas investment in the State was very much driven by companies seeking to make economic returns from production.

"There are a lot of smaller investors buying land for production and some of these will be organisations or funds that are pre-empting future food security issues," he said.

But Mr Verroll said those with food security on their minds were more than likely speculating that food security issues would drive prices up, rather than working to ensure certainty of food supply to their home country.

"The countries likely to invest in WA for food security reasons would be mostly Asian or Middle Eastern nations and, in many cases, deals are likely to take years to develop," he said.

"I think it would take a prolonged commodities price spike before food security issues alone spur any great deal of investment."

International agri-investment consultant Murray Gmeiner agreed that current foreign investment in WA agricultural resources was motivated more by profits rather than food security issues.

He said there was a mix of foreign investment in agricultural land and logistics for production purposes to create supply chains and to offset commodity price fluctuations.

Mr Gmeiner said Australia's reputation as an attractive, low-risk location for foreign investment into agricultural production had been damaged by the live export trade ban this year.

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