FOREIGN direct investment (FDI) needs “a social licence and a sense of mutual interest” to be beneficial to Australian agriculture, says the National Farmers’ Federation (NFF).
In a speech to the National Press Club on Monday, Prime Minister Tony Abbott flagged plans to unveil the Coalition’s long-awaited foreign investment register and review FDI rules - a key election promise in 2013.
Agriculture Minister Barnaby Joyce defended the register's delay late last year, saying it hadn't “dropped off the agenda”.
“We don’t want to duplicate what the States are already doing,” he told the NFF Congress in October.
“We want to make sure that there’s one seamless register.”
An FDI register for agriculture was announced by the former Labor government in October 2012.
Mr Abbott said on Monday the government would "shortly" put in place better scrutiny and reporting of foreign purchases of agricultural land.
A survey commissioned by accounting firm Bentleys and conducted by Empirica Research last August found 60 per cent of farmers still believe there should be less foreign investment in Australian farms.
While tougher FDI regulations are popular with the public, the NFF has cautioned the government will need to find “the right formula” to make the proposed system work.
“Foreign investment has brought definite benefits to Australian agriculture,” NFF chief executive Simon Talbot said.
“We want to help ensure that it continues to do so. But to do that, we need to develop the architecture for successful and sustained agricultural investment.”
“Ironically, I think foreign investment will be the saviour of this industry”
Bentleys Queensland head of agribusiness Ben Cameron said the survey results revealed a need for more education and better information in the sector.
"Ironically, I think foreign investment will be the saviour of this industry," he said. "I think there is a massive education gap that needs to be filled in this industry, but I think it will come when [farmers] see their struggling neighbour bailed out by overseas."
Mr Talbot said a register would be beneficial in fostering a sense of mutual co-operation between farmers and potential investors.
“Farmers need accurate information and a national foreign ownership register of agricultural land, agribusiness and water entitlements," he said.
“That register should be for the whole of Australia; it should be comprehensive in its scope; and it should be available to the Australian public."
In a joint statement, shadow ag minister Joel Fitzgibbon and finance spokeswoman Penny Wong said the PM had “moved to shore up his own job at the expense of jobs in regional Australia” by promising to constrain “critical” FDI in Australia’s agricultural industries.
“Australia needs to promote and attract – not to discourage and deter – new investment in our farming, food processing and agribusiness sectors so they can expand to take advantage of these opportunities,” the opposition statement said.
Mr Fitzgibbon and Ms Wong also noted Australia’s agriculture sector would need significant FDI to capitalise on the burgeoning Asian market opportunities.
“Closed systems of production, processing and export are in nobody’s interest,” Mr Talbot said.
He also echoed the Prime Minister’s sentiment, who said in Monday’s speech: “I am a friend of foreign investment - but it has to come on our terms and for our benefit”.
The NFF wants to see the power of the Foreign Investment Review Board increased to extend beyond transactions and into post-investment assessments.
“Above all, the nature of the investment has to be at the forefront of consideration,” Mr Talbot said.
“Does it contribute to downstream investment? Does it help innovation in the Australian economy? Does it help to make the most of Australian abilities?
“Foreign investment also needs to have a social licence and a sense of mutual interest and co-operation, such as co-investment (so) we can develop a model of foreign investment for the future: one that serves Australian interests.”