Ag investment needs transparency

22 Jun, 2015 02:00 AM
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3
 
NSW Farmers president Fiona Simson.
We also need to be able to have investment in a way which the community feels is transparent
NSW Farmers president Fiona Simson.

NSW Farmers president Fiona Simson wants to see a public register of all major investors in Australian agricultural land and agribusinesses, not just assets held by foreign buyers.

Community angst about overseas investment in Australian agriculture needs to be addressed fairly, according to Ms Simson, who has highlighted concern about the impact certain buyers can have by accumulating strategic assets throughout the supply chain.

Addressing a NSW Farm Writers' Association forum discussing the impact of new foreign direct investment (FDI) rules, she also noted influential buyers - and not necessarily foreign investors - had a big impact on the rural sector by purchasing farms and transforming them for other purposes aside from farming, notably mining or mining buffer zones.

As such, Mrs Simson said these ownership figures should also be captured in a register offering a comprehensive view of agricultural land purchases and the ownership of other big value agribusiness assets.

"I think some of the concern we see today has arisen from other landowners buying agricultural farms for other land uses, for example, mining," Mrs Simson said.

She believed "most farmers would welcome the increased Foreign Investment Review Board (FIRB) scrutiny, would welcome the new threshold (down to $15 million), and would be interested particularly to welcome the rural land register."

Yet foreign investors shouldn't necessarily be deterred, and striking a balance between ensuring the best interests for the farm sector while not turning away investment opportunities was one of the key sentiments expressed by the forum panelists.

Other speakers Malcolm Brennan, a partner at law firm King and Wood Mallesons specialising in foreign investment, and Challenger Limited funds manager and director of agricultural real estate, Nick Gill, discussed how they saw the new FIRB screening threshold of $15m.

Mr Gill noted that while new fees to be imposed on foreign buyers to fund the FIRB's increased regulatory investigations appeared somewhat heavier than expected, Australia's new process for monitoring and publicising investment by overseas companies and individuals did not seem as bureaucratic as the rules New Zealand.

Enormous opportunity

Mrs Simson said farming communities were concerned about the rapid rise in foreign investment in Australian agricultural land, but she also stressed there were great opportunities offered by new investment in the industry.

"We have an enormous opportunity in front of us which could generate trillions more in export dollars," Mrs Simson said, also noting agriculture's desperate need for fresh initiatives to fund infrastructure upgrades, particularly transport networks.

"The fact is we're just are not going to be able to access that investment from Australia alone - we need that foreign investment.

"But we also need to be able to have investment in a way which the community feels is transparent, where the community feels it is adding to the fabric of our society, where it is building our economic capability, and where it is building our industries."

She particularly welcomed the new foreign investment register.

"We have been calling for that register for many years to try to inform the debate, so we can actually have some real understanding around whether that concern is justified or whether it is not.

"It's been really difficult having the debate without that knowledge to inform the discussion."

Embracing the benefits

Mr Brennan agreed it was important foreign investors were not deterred and the benefits they offered Australian farmers were embraced, while at the same time community concerns were properly met.

"We don't want to kill that investment - if we get that wrong, it goes (elsewhere), it doesn't come here. We have to be very careful about that," he said.

"We are competing for that investment with many other nations.

"A lot of European and US owned pastoral funds have already been investing in Australia for a very long time.

"They've never been to FIRB before ... because they have never exceeded the threshold, but we are now having them come through (to be scrutinised)."

Mr Brennan said foreign agricultural investment funds had already proven "a great rescue for many farmers", providing a fair value markets for their land while still retaining their agricultural skills and knowledge.

"Quite often they are saying, 'we want you to stay on - you know the land, you know what's going on, we actually need your expertise'.

"(It is) actually retaining Australian expertise on the farm, which is very important - I think we are seeing that come through."

Mr Brennan said FIRB's new conditions would require investment applications to be consistent with the national interest.

The regulator was looking at factors such as a buyer's potential impact on rural land, water rights, biodiversity issues, supply issues and community benefits such as employment when it came to foreign investment applications.

Mrs Simson noted her discussions with potential investors wanting to get a piece of Australian agriculture action often revealed they were not necessarily interested in buying farmland.

"They are actually more interested in buying parts of the supply chain, integrating businesses and being involved in agriculture that way."

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FarmOnline
Nick Heydon

Nick Heydon

is The Land's property editor
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READER COMMENTS

Jock Munro
22/06/2015 5:05:11 AM

The NSW farmers Grains Committee does not appear to have too many problems with foreigners controlling the wheat industry or owning the supply chain. Most of the Grains Committee were keen supporters of deregulation and welcomed the loss of the wheat single desk and Australian grower ownership and control of AWB Ltd.
Bushie Bill
22/06/2015 12:01:10 PM

Dear old Jock reminds me of an old Pickering cartoon at the time of the election resulting from the Dismissal. Pickering had Fraser in the boxing ring, ready to get on with the bout, whilst Dear Old Gough was busy attacking the referee who was the then Governor General, Sir John Kerr. Jock, stop fighting old lost wars and get on to living with what now actually exists. As Gough said "nothing will save the Governor General" and nothing will save you, Jock, until you get a dose of reality.
Jock Munro
22/06/2015 6:43:04 PM

Thankyou for your kind words Bushie Bill. I would have thought an industry that has had its quality reputation smashed and major customers also telling us that our wheat was worth less would be a 'dose of reality'.

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