FIRB 'screen' locks out investors

What factors could they consider to distinguish foreign farm purchases that are good from bad?

NEW foreign investment rules for agricultural land purchases will choke farm sales in red tape, says DAVID LEYONHJELM.


I'VE met plenty of farmers my age who are thinking about and planning for the end of their farming days.

Some have succession plans with family members. But many don’t, and their plan is to sell. They’re not sentimental but they have a strong connection with their land, and they know its worth.

They also need to sell at a fair price. They’ve got debts to repay before funding their retirement. After a lifetime of investing in the farm, their superannuation nest egg doesn’t compare with those who have been ‘pay-as-you-go’ employees all their life.

The potential outcome of one who has decided it’s time to sell goes as follows.

“April comes along. Then May. All other bidders fade away...”

The property is listed with an agent and there is the usual marketing campaign, but buyers are thin on the ground. The best offer is from an unenthusiastic neighbour - a couple of million, which everyone knows is too low.

Just as hope begins to fade, a potential buyer comes in for an inspection. The buyer knows his way around a farm — he owns a couple of them already. He’s thorough and impressed with what he sees. He speaks with an accent which you recognise as South African. As he leaves he mentions a price twice the size of the neighbour’s offer, close to the owner’s own valuation. He’ll be in touch.

But then the first of March comes along, and our South African bid gets stuck in bureaucracy.

Barnaby Joyce, Tony Abbott and Joe Hockey have announced that, from the first of March, this bid needs to be ‘screened’. The reason is that if the purchase went through, the value of the agricultural land owned by the South African would add up to $15 million.

April comes along. Then May. All other bidders fade away.

June comes, and still no word from the bureaucrats responsible for the ‘screening’.

Then in July, the South African runs out of patience. He needs to get on with business and withdraws his offer.

Barnaby Joyce and his colleagues say ‘job done’. To them, such a result means ‘investment is coming in on our terms and for our nation’s benefit’.

The farmer seeking to sell his farm knows it hasn’t done him any favours. But he also struggles to see how the result is for our nation’s benefit.

He cannot even imagine what the bureaucrats have been doing. What factors could they possibly consider to distinguish foreign farm purchases that are good from foreign farm purchases that are bad? How can these factors be sensibly considered anyway? After all, the relevant bureaucrats are economists in the Treasury Department in Canberra.

If investment must be ‘on our terms’, what exactly are those terms? A lot of ageing Australian farmers will be hoping somebody knows.

And I suspect it won’t help to ask Barnaby.

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FarmOnline
David Leyonhjelm

David Leyonhjelm

has worked in agribusiness for 30 years and is a Senator for NSW representing the Liberal Democrats.
Date: Newest first | Oldest first

READER COMMENTS

Bushie Bill
27/02/2015 5:41:30 AM

For all you clowns who are focussed on the trivial and fail to see the substantive, David was trying to give you a parable on the deadening hand of regulation and control, and its ultimate destruction of initiative and value. Only the ignorant and slow- thinking will be happy. Get it now?
stockman
1/03/2015 5:18:02 PM

What would we do without Bill the Bushie,who appears to be an expert on everything? But then we know X is an unknown quantity and spurt is a drip under pressure.
Bushie Bill
2/03/2015 8:02:50 AM

Obviously stockman is one of the ignorant and slow-thinking. You should all do everything you can to move him out of your industry.
mark2
3/03/2015 6:17:50 AM

ah yes BB , the deadening hand of regulation and control etc etc, does the parable , in your case , extend to the labour market ? I myself would like to run the deadening hand of deregulation through the union movement, particularly the PSA, MUA and all the other surviving backwaters of socialism that have far too much to say.
stockman
4/03/2015 5:29:17 PM

The truth hurts eh Bill the Bushie LOL nobody is moving me out of the industry any more than you will say anything against your union comrades.I would have thought you would only read the Melbourne Age,not the Stock &Land.
Cam
6/03/2015 8:33:17 AM

Stockman, Bushie doesn't have time for the Age, he spends all his time reading Farming for Dummies before coming on here and enlightening us with his profound knowledge of all things ag.
Jock Munro
9/03/2015 6:42:08 AM

If selling farms to foreigners was such a good idea then why do so few nations allow it to happen?
Bushie Bill
10/03/2015 9:15:16 AM

Is it because they are even more backward and economic illiterates than our own Aussie hillbillies, Jock?
robdo
11/03/2015 1:20:11 PM

I agree with David's post. We are becoming too regulated.I'd like to sell Australian wildlife to foreigners. I could triple my profit margin if I were allowed to do so, but I'm not allow to export.
chromedome
13/03/2015 1:50:13 PM

why am I still reading the senator for donkey vote rantings. run away and get some paper cuts from long senate papers.
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Agribuzz with David LeyonhjelmCommentary, news and analysis with agribusiness consultant David Leyonhjelm. Email David at reclaimfreedom@gmail.com

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