FOREIGN investment has played a major part in developing the Australian economy, in particular agriculture and agribusiness, according to Australian Farm Institute executive director Mick Keogh.
Speaking at University of WA Institute of Agriculture's 2012 Industry forum last Thursday, Mr Keogh said the main issues surrounding the foreign investment in agriculture debate stemmed from the fact that so little was known about what the levels of foreign investment in Australian agricultural land and businesses were.
Mr Keogh said there was a need for the Australian public to think rationally and discuss many of the issues to get a better understanding of the foreign investment picture and what was deemed as acceptable.
He said while there had been an Australian Bureau of Statistics (ABS) report done on what the levels of foreign investment were in Australia, its accuracy could be questionable due to modelling problems and sample size. This had allowed both sides of politics to run with the issue and make broad claims that simply weren't true.
"One side of the argument is that Australia is getting gobbled up by foreign investors, the other side is that the issues surrounding foreign investment were just scare-mongering and xenophobia," he said.
Mr Keogh said he agreed with many Australians that it was necessary for some type of foreign investment review board.
"Australia should be looking at other countries to see what their acceptable levels are," he said.
"In reality, foreign investment had been occurring in Australian agriculture since its beginning and part of the reason we have a grain and wool industry in Australia is thanks to foreign investment."
Mr Keogh believed there had been ignorance from Australian corporate investors when it came to agriculture with them not wanting to invest and understating the potential agriculture held.
"As a result foreign investors had stepped in to help fill the problem," he said.
"When you take a closer look, the clear picture that emerges from this is the agribusiness sector especially is dominated by foreign owned entities.
"While some may express concern at this and the continued developments, it's probably worth noting the same situation applies in many other sectors of the economy, such as the automobile sector, which is completely dominated by foreign owners or the mining industry."
Mr Keogh said it was not surprising Australian agribusinesses had a large amount of foreign investment, given the small and open economy of Australia and the fact it has traditionally relied on inflows of capital investment to fund economic growth.
"It is important to look at the risks and opportunities associated with foreign investment," he said.
"The issue should not be the extent of foreign ownership, rather the risks and opportunities it might present to the agricultural sector.
"Often many of the arguments voiced against foreign investment are emotional responses, rather than being based on available evidence and observations.
"I believe the benefits of foreign ownership and investment in Australian farmland and agribusiness, outweigh the dangers, and I'm not even sure the dangers that are talked about are real."
Mr Keogh said the dangers referred to when talking about foreign investment were not related to foreign ownership, but rather the structure of the markets and lack of transparency some of those markets had.
"Taking measures to increase the transparency of foreign farm ownership and implementing measures to improve the transparency of concentrated agricultural markets and supply chains, is a logical way to dispel some of the industry unease about the issue," he said.
"By doing this we are able to ensure Australian agriculture is well placed to take advantage of the exciting opportunities emerging for the industry."