Qatar's good oil on Aussie farming

Oil and gas rich Qatar is emerging as an unlikely poster boy for foreign investment and corporate operations in Australian agriculture as debate over the issue threatens to divide Tony Abbott's coalition Government.

Hassad Australia, an operating arm of the Qatar Investment Authority, is convinced the best way to win over critics is to take a leadership role in agriculture.

The company's chief executive Tom McKeon said that as a sovereign foreign investor and corporate player Hassad would be judged on the way it operated in local communities.

It is focused on setting new standards in environmental management, health and safety, animal welfare and corporate social responsibility.

The ambitious plan covers a lot of ground, as do the company's operations in Australia. Hassad has acquired 255,000ha across 13 farms in WA, South Australia, NSW, Victoria and Queensland since 2010 and has not ruled out more purchases.

The major initiatives announced by Hassad include:

·Identifying the least productive areas on its farms and returning them to natural vegetation.

·Banning the use of quad bikes, which are the leading cause of the disproportionally high number of workplace deaths on Australian farms.

·Mandatory occupational health and safety training.

·Setting up an independent animal welfare advisory committee to oversee livestock operations.

·A graduate placement program involving all of its operations to support career development.

·Submitting all of its business plans to the Foreign Investment Review Board for monitoring.

Mr McKeon acknowledged Hassad was a new kid on the block in a sector littered with corporate farm train wrecks, but said it was in for the long haul.

"We are passionate about the sustainability and profitability of agriculture in this State and in Australia," he said. "We are in the business for the long haul and we believe we have a lot to offer."

The Hassad land holdings in Australia would cover more than 20 per cent of Qatar, which has oil and gas reserves worth trillions of dollars but no rivers or lakes and virtually no arable land.

The population of 1.8 million relies on imports for 90 per cent of its food and the desire for food security sparked a global investment in agriculture, which started with setting up Hassad Australia in November 2009.

In a sign of how important the project is to Qatar, Hassad Australia's six-member board includes the head of the country's 2022 World Cup organising committee, Hassan Al Thawadi.

Mr Thawadi was the chief executive of the bid committee, which stunned the soccer world by scoring the right to bring the event to the Middle East for the first time. He is also general counsel for QIA and Qatar Holdings, which have recently invested in Porsche, Volkswagen, Barclays Bank, the New York Stock Exchange and Harrods.

A $50 million spending spree late in 2011 netted Hassad its three WA operations - Bindana Downs at Bindi Bindi (8483ha), Amarina at Jerramungup/Gairdner (14,672ha) and Yupiri at Esperance (8340ha).

"We've only really been operating in the West for 18 months so it's really a work in progress," Mr McKeon said. "This year we have 27,000ha under crop and expect to harvest around 50,000 tonnes of barley and 13,000t of canola."

Hassad's current production targets in Australia are 100,000 lambs and 165,000t of grain a year. It is focused on exporting grain, live sheep and carcases to the Middle East but also supplies the domestic market.

Mr McKeon also moved to clear up misconceptions about investment by state or sovereign-owned entities operating through companies registered in Australia.

"We operate by Australian taxation and corporations law and governance. Like other farmers, we pay levies on our commodities as they are handled through domestic logistics chains," he said.

"While food security was the initiator for Hassad's investment in agriculture, the business plan and investment has changed to a totally commercial outcome focus and requirement."

As a sovereign-owned entity, every dollar spent on farmland by Hassad has been subject to FIRB approval and where possible it has retained existing staff after completing purchases.

A hostile Senate committee chaired by Liberal veteran Bill Heffernan grilled Mr McKeon twice about Hassad's operations as part of its inquiry into foreign investment. The committee's final report said it had been "reassured" by Hassad's openness.

Mr McKeon was reluctant to weigh into the debate raging in Government ranks over the sale of GrainCorp to US-based Archer Daniels Midland or the National Party's push to drastically lower the threshold for FIRB scrutiny of investment in agriculture.

He said the outcome of ADM's $3.4 billion offer for GrainCorp was being closely monitored internationally, while the proposed threshold changes could delay FIRB approvals and act as a disincentive to investment.