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The Forum > Article Comments > The foreigners aren’t coming: foreign ownership of Australian farms > Comments

The foreigners aren’t coming: foreign ownership of Australian farms : Comments

By David Leyonhjelm, published 19/9/2011

It would be ironic if Australia copied Latin America and limited foreign ownership of farmland because no one wants to buy the farm anyway…

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I think this writer ought to spend a little time in south western Australia. Clearly he is ignorant of the supply chains and ownership issues here.

Two examples. The entire sheep supply chain from the paddock to abattoir (or the live sheep transporters in our ports) is owned by middle Eastern interests.
There is discussion of a part of the dairy industry being bought by foreign interests (Chinese this time).

The FIRB policy should be changed to exclude food production. I can see a time when a much bigger fraction of our daily bread will come from China.
Posted by renew, Monday, 19 September 2011 9:36:53 AM
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"And the idea that Australians might run short of food because it is grown on foreign-owned land is too silly to take seriously. Australia is a huge food exporter and always will be, no matter who owns the land on which it is produced."

This in itself is a silly comment in the light of rising oil and phosphate prices as these resources essential for modern agriculture decline. The author seems to think that foreign investors themselves blindly believe in the free market but the Chinese only follow free market principles as long as it is to their advantage. As Chinese food production declines due to rapidly diminishing fossil water supplies we will see them reliant on importing the food they need for an ultimate population of 1.5 billion. The free market then will not apply. You will not be able to buy the food output of the Chinese-owned farms for love or money - it will be sent to China even if people here are going without. The bilateral deals that the Chinese are doing for oil supply are an example. This oil will never get to the export market - so where the Chinese go the "free" market for oil disappears.

Only a blind believer in the free market would put Australia's own food security at risk by allowing other nations to own our food-producing land.

For an objective view of Australia's food production, consumption and our food security see:

http://www.energybulletin.net/node/52706
Posted by michael_in_adelaide, Monday, 19 September 2011 9:37:00 AM
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these days foreign owners are more diverse and include the Chinese,
“who are viewed with similar suspicion to what they faced 150 years ago when they came to dig for gold”

Silly comment !? This one is “blatantly misleading” !!

The few straggling Chinese miners of yester-year didn't present the threat of today's
“Military Super Power” and emerging “Economic Super Power” !!

ps. didn't bother to read after this point.

Arthur Bell aka bully !!
Posted by bully, Monday, 19 September 2011 12:28:15 PM
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...To be frank, I think foreign ownership (read Chinese), of the farm is OK providing an exponential American military presence in Australia balances the potential threat to our sovereignty posed by the rising Chinese empire that plays the game of expansion by its own rules.
Posted by diver dan, Monday, 19 September 2011 3:04:38 PM
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Diver Dan It is emphatically NOT OK even in the vanishingly unlikely event of an American force here.

The points that Michael Lardelli made were appropriate and perhaps too polite.

That said, I also read sarcasm...
Posted by renew, Monday, 19 September 2011 3:19:22 PM
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*The entire sheep supply chain from the paddock to abattoir (or the live sheep transporters in our ports) is owned by middle Eastern interests.*

You'd better clarify what you think that they actually own, Renew.
The supply chain between a paddock and an abattoir or boat is
a truck and I am not aware of Middle East interests having taken
over WA livestock trucking.

The largest corporate investors in livestock and the live trade
would be Siba ships/Wellard. They own a few farms, alot of ships
and the odd holding yard. They have created huge benefits for the
WA livestock industry as it stands, but AFAIK that is Italian money.
Posted by Yabby, Monday, 19 September 2011 3:40:31 PM
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Michael,
Chinese don't believe in fair trade full stop, they aim to dominate at every level, everywhere they've gone for thousands of years it's been the same story.
Ask the Tongans,Papuans, Singaporeans, Vietnamese, Solomon Islanders, Madagascans and all what happens when Chinese immigrant "businesmen" become entrenched in a local economy...short answer, the economy dies, commerce becomes a Chinese monopoly.
It's a little known fact that a good number of the "Vietnamese" refugees of the '70's were actually ethnic Chinese "traders" who were run out on a rail once their corrupted protectors in the south had been overthrown.
Posted by Jay Of Melbourne, Monday, 19 September 2011 8:53:45 PM
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Yabby I stand corrected.

But it doesn't change my stance that the FIRB policy must be changed to reduce or make harder for the influx of money into Australian agriculture in all its forms to occur.
How hard can it be to develop fiscal policies that aid our own agriculture and make it less vulnerable to foreign ownership?
Posted by renew, Monday, 19 September 2011 9:05:56 PM
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*But it doesn't change my stance that the FIRB policy must be changed to reduce or make harder for the influx of money into Australian agriculture in all its forms to occur.*

So Renew, you are against the fact that British money developed
the NT cattle industry and American money developed agriculture
in Esperance. Why would we be better off, if they had not done so?

If Australians want to own all agricultural land, why don't they
simply buy it? There is plenty of super fund money to do so and
given that farmers have 59$ billion of debts, many want to get out
and have no buyer. Why should agricultural land be treated differently
to other business investments?
Posted by Yabby, Monday, 19 September 2011 9:13:53 PM
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Yabby, I am not diminishing the values of the past. It simply time to change. We need to be far more defensive in our policies. Go back and look at Michael Lardelli's words. This will become critical for Australia.
Posted by renew, Monday, 19 September 2011 10:20:57 PM
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*Go back and look at Michael Lardelli's words.*

Renew, I read it earlier but took little notice, for IMHO
Lardelli's arcticle is full of holes.

Whilst I agree with the notion of not having a huge Australian
population and that this is best for Australia's future,
his data on food production is flawed for good reasons
and as ever, the devil is in the details.

Lardelli firstly compares Dollar values, which is hardly a
fair comparison. Yes, we export boatloads of commodities
and we import lots of gourmet foods. In tonnage terms we
still land up exporting far more then we import, its just
that our consumers seem to like Jambon from Spain or Lindt
chocolates from Switzerland. There is no good reason why
they should not, for we are hardly about to starve.

Secondy Australia could produce quite alot more food then
it does, if it were profitable to do so. Profits drive
food production, not potential maximum volume. The numbers need
to add up for any food producer and given our high costs
and low agricultural prices,it commonly makes sense not
to grow something at all, rather then lose money.

Foreign investment in the past has improved things for
agriculture, for when foreigners have skin in the game,
it is their interest to help develop an industry and
that helps to develop overseas markets for Australian
farmers. I can't see why that should be a bad thing.

After all, the land stays here.
Posted by Yabby, Monday, 19 September 2011 11:39:29 PM
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The real issue we will face moving forward is the fact that most farms will become unviable due to costs of farmimg.

Lets face it, if the current trend continues a farmer will be paying an assistant up to $60 per hour to drive a tractor. The going rate now is $35 an hour, and thats if they can find someone reliable, thanks largely to the mining industry.

The trouble is, we cant survive without mining, so thats unlikely to change.

Now assumming energy costs continue to head north, then the only people who will be able to afford to farm will be the likes of china, as they dont have the IR constraints we have. Yet!

Now ask yourself an honnest question.

If you owned that inherited farm and, you were offered 10 or even 20 years potential income to sell, would you?
Posted by rehctub, Wednesday, 21 September 2011 8:00:14 AM
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Following on from what yabby said.

One major problem for farmers is the unknown price they will get, if and when their produce/product gets to market.

With many crops being a twice a year event, chances are they can be wiped out by bad weather, or, if they have a good season which results in high yeilds, chances are their competitors have had the same result.

The end result being that the market s flooded and prices drop, often to a point where its simply not worth picking/harvesting.

Meanwhile, they have to find the dollars to fund the expenses, hence one reason why so many inherited farms are now debt ladened, ongoing funding costs with nill income.

Like any business, it s a case of risks V rewards.

The new IR laws have not helped farmers either.
Posted by rehctub, Thursday, 22 September 2011 9:52:28 AM
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Interesting the ABS has to do a survey to get an inkling of the level of foreign ownership of Australian farms. Why don't we know? Because unlike most other countries we do not require foreign buyers to register or notify their purchases (except where it is over $231 million - which excludes about 99 per cent of farms). Also a random survey is a totally inadequate response - it should have been targeted at recent foreign sale hot spots such as central NSW and western Victoria. It seems David Leyonhjelm knows a thing or two about business but he must have missed the Management 101 lecture which states the golden rule - "You can't manage what you don't measure." We must, at the very least establish a register of all foreign purchases of farm land - only then can we have a meaningful discussion of how we deal with the issue.
Posted by hudson, Wednesday, 28 September 2011 1:20:22 PM
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