Crackdown warning over farm investment
A company financed by oil-rich Qatar has warned industry leaders about the consequences of a Federal Government crackdown on overseas ownership of farms and agribusinesses.
Hassad Australia chief executive Tom McKeon said moves to slash the threshold for Foreign Investment Review Board investigations would limit the capital available to grow farm exports.
Since 2010 the company has bought 13 farms in Australia, including three in WA covering 31,000ha, as part of Qatar's plans to spend billions of dollars on global agricultural assets.
Lowering the trigger for FIRB scrutiny from $244 million to $15 million for land purchases and $53 million for foreign takeovers of agribusinesses was part of the coalition's election campaign.
Mr McKeon said the changes would exclude big corporations from auctions, bog down the approval process and make Australia less attractive to investors.
He told the Pastoralists and Graziers Association convention in Perth at the weekend the debate should focus on managing the investment within Australia, not the source of the investment.
All purchases by state-owned enterprises or sovereign wealth investors such as Hassad are already subject to FIRB scrutiny, regardless of value.
Mr McKeon said Hassad had been open and honest with FIRB to the point of submitting its business plans to the investment watchdog.
In a rare insight into the operation of FIRB, Mr McKeon said the company often faced detailed questions about whether it was sticking to the business plan and commitments made in relation to past farm purchases.
He said Hassad worked on a 90-day turnaround for FIRB rulings but feared this would blow out under the lower threshold.
“It will start to bog down that bureaucratic system which will create problems and it will just makes it less attractive for people to come and invest,” Mr McKeon said.
“There has been a lot of concern expressed in different areas in the circles we mix in about the ability of FIRB to handle the plethora of extra work.”
Mr McKeon said the outcome of US grain giant Archer Daniels Midland’s $3.4 billion offer for Eastern States-based Graincorp was also being closely monitored internationally.
Key Nationals, including Agriculture Minister Barnaby Joyce, have vowed to block the sale and are committed to the FIRB changes in what shapes as a test for coalition unity.
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