Super funds urged to invest in ag

16 Oct, 2014 05:22 AM
Victorian Minister for Agriculture and Food Security, Peter Walsh. Photo: Eddie Jim
I don't think there's ever been a better time to invest in agriculture
Victorian Minister for Agriculture and Food Security, Peter Walsh. Photo: Eddie Jim

AUSTRALIAN superannuation fund managers should "show some leadership" and invest in agriculture, says Victorian Agriculture Minister Peter Walsh.

Mr Walsh said capital investment would help Victoria significantly increase food and fibre production and that would come from a mix of sources, including domestic and foreign money.

"The super funds are an interesting creature," he told a Rural Press Club of Victoria.

"I'd like to see them invest more in the production systems. I could be cynical and say they effectively drive the sharemarket and the CBD property market in Australia. It would be good if one of them actually broke out and showed some leadership and went into something a bit more productive than those two particular markets.

"But that is up to them, because they're playing with yours and my super, so we don't want them to risk it too much," he said.

Mr Walsh said some exciting joint ventures had occurred in recent years involving foreign investors and local agriculture/food projects, and that would continue.

Later, he told Fairfax Media that large superannuation funds could make a "substantial investment in agriculture", even by allocating to agriculture just a fraction of their overall money.

Brent Finlay, president of the National Farmers Federation (NFF), joined Mr Walsh in encouraging super funds to invest in agriculture.

"We'd certainly like to see superannuation money invested," he said.

"Capital investment into agriculture is really important and I don't think there's ever been a better time to invest in agriculture. We've got this massive opportunity."

Presently, superannuation funds seem to have only a small connection to Victorian agriculture. However, the $13 billion superannuation fund VicSuper, which says it has more than 240,000 members, owns farmland in north-west Victoria near Swan Hill.

Considerable investment and improvements have been made to some of this land, with a landmark cotton crop grown there recently.

Mr Finlay said overseas pension funds had also recently invested in agriculture in Queensland.

Meanwhile, in a bid to develop closer ties in some key Victorian agricultural export markets, Mr Walsh announced that should it win the November state election, the Coalition would hire three food and beverage trade specialists, to be based in Japan, Thailand and the Middle East, a move immediately welcomed by the Victorian Farmers Federation (VFF).

These staff would "play an important role in connecting businesses with buyers and positioning Victoria as a producer of high-value, high-reliability produce", Mr Walsh said.

The recent Victorian Food and Fibre Export Performance Report revealed that the State's food and fibre exports were valued at a record $11.4 billion in 2013-14, a 12 per cent jump on the previous year.

Mr Walsh predicted that by 2030, Victorian agricultural production would be double what it was in recent years.

He forecast that in 2030, Victorian agriculture would be "Asia's high-end deli. We're not actually their Coles or Woolies ... we want to aim for that high-value end of the market, we're not going to supply the mass market."

Painting a bright picture of how Victorian agriculture would look in 2030, he said: "Our industry is the heartbeat of the Victorian economy and the envy of the world."

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angry australian
16/10/2014 7:42:59 AM

Peter Walsh and Brett Finlay, the pair of you are dreaming. The role of a super fund is to earn enough money to pay its members when they reach retirement age, not to spend it on speculative ventures. Where are the consistent profits in ag to allow a trustee to invest with confidence? It was only a few years ago dairy was on the bones of its backside,where are the superior returns in beef,sheep or crops? Why would they invest when the secondary parts of the industry like abattoirs,tanneries,canneries etc all seem to be in decline? Make farming consistently profitable and people will invest
16/10/2014 9:21:12 AM

They would be better off investing in an electronic tag manufacturer. At least that way Peter Walsh will ensure the farmers of Australia are forced to lose money to drive the profits of the super fund. If my super fund invests in ag I'm changing fund, I've already lost enough money farming.
angry australian
16/10/2014 11:19:11 AM

Want to really help Victorian farmers, Mr. Walsh? Look at Workcover premiums, payroll tax on food manufacturers like SPC and Murray Goulburn, water costs and availability, licensing and inspection fees charged by Primesafe on abattoirs and butchers, other ag inspection fees, power costs which were driven up by RETs and the carbon tax but seem slow in coming down, other licence fees like fuel storage licences that annoy farmers. All these costs are borne by the producer when he is simply a price taker and not a price maker. Remove these impediments and farmers won't need super fund capital
16/10/2014 5:43:58 PM

Just listen to you lot of whingers.......why would anyone with money to invest even give you the time of day let alone invest money with you. If youve lost a heap of money farming, then sell it and go and do something else, if 'the system' isnt to your liking then do it differently...... Super Funds dont have to invest with you, and the above comments are the very reason they arent bothering
angry australian
17/10/2014 5:51:26 AM

Freshy, not whinging just pointing out how over the years plenty of over schooled fools haven't got the return they projected from farming.Two recent examples are the less than adequate return achieved by a prominent merchant bank and the financial demise of Cubbie Station. If governments would learn to macro manage instead of micro manage this nation would be better off. Victoria has as many impediments to efficient farming as any state in Aust. Every useless law and reg is a tax on productivity and profitability,which becomes a investment disincentive to investors.
Ted O'Brien.
17/10/2014 2:16:27 PM

Angryozzie@16/10/2014 9:42:59 AM "Make farming consistently profitable and people will invest ". Exactly. If farmers can't make the money to invest in farming, then outsiders who invest will lose their money. The mystery above is why would Peter Walsh cringe when saying the bleeding obvious, that super funds, esp compulsory super, "effectively drive the sharemarket and the CBD property market in Australia." If you feel the need to be PC, Peter, you are no use to the Nationals' constituency. Which all cuts back to Unilateral Trade Reform, which I again draw to people's attention.
19/10/2014 6:53:55 AM

What are you rambling on about "Freshy"? My whole comment is telling anyone who will listen to stay the hell out of ag. With the current suicide rate in the ag sector blind freddy should be able to tell the system is broken, completely. Who am I going to sell too anyway, three quarters of the country is on the market with no buyers. MR Walsh's regulations are killing rural Australia and someone needs to tell him.


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