I don’t like it at all David.

We simply shouldn’t be selling off the farm to foreign interests!

Far too much of this country is owned by overseas interests as it is, which compromises our ability to determine our own destiny as far as food production and a sustainable future is concerned.

The writer has muddled two different questions:

1. Do we need foreign investment in Australian companies?

2. Do we want foreigners controlling our farms, our land and our food supplies?

Check around the world. See how many countries forbid foreigners to own their land. China does- all land remains the property of the state. In the United Arab Emirates, I believe, all oil wells remain the property of the State. Nobody who isn't Indonesian can own land in Indonesia. Only a Samoan can own land in Western Samoa. And so on.

Why does our government allow Chinese, Americans etc to buy harbour-side and oceanfront land in Sydney? It keeps the price high and locks out poor Aussies who are trying to get into the property market.
Foreign investment? Fine.
Own our land and control our destiny? No way!

Or maybe even the price placed on farms is above what the market is prepared to accept given their (very variable) returns?

Land is what makes a Nation. Then ,on that land ,we have People , our Citizens.

It is Articles like this that makes Economists to be total Dills ,all long sighted.

Now I can add another party to the Do Not Vote For List.. The Liberal Democratic Party

A very sensible article. Much opposition to foreign ownership is confused and emotive. Foreign investment will be good for the farming sector.

Ludwig
The proportion of foreign ownership of Australian land is tiny, and likely to remain so

Rhian, do you have some figures on that?

About 89% fully Australian owned, 6% majority (>50%) Australian owned, 6% majority foreign owned:

http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/7127.0Main+Features1December%202010?OpenDocument

(adds to 101% due to rounding)

Can someone please explain why a business that has gone into receivership and which can't attract Australian buyers is of interest to foreign buyers? What do they do differently to make the business profitable and why wouldn't an Australian owner do the same? I've always wondered.

Farms are after all businesses. And the value of a business is largely dependant on the income they can reliably produce.
Sure the value of farms is declining and rightly so, given the patent overvaluing.
The advent of foreign speculators in the residential market has clearly contributed to Australia having the highest median house prices in the English speaking world.
We don't want the farming sector to follow suit
I saw one family farm sold up not far from where I live.
And yes it was very sad!
This third generation farmer was fairly typical.
Badly advised simply to avoid paying tax.
I mean, farmers already can average their incomes over seven years!
Even so, his sheds were full of still very serviceable tractors and harvesters etc.
Had he been better advised he would have kept using his still serviceable plant, paid a bit more tax, and bought a dozen or more off farm investments.
I mean, just the money paid for just one of his tractors, would have been enough to instead, buy six nearly new houses outright, in a nearby town. And if one added up al the unneeded plant, that number could have been quadrupled.
Meaning, he would then have some sort of reasonable income stream during the bad years.
Foreign buyers might have been welcome for this one farmer, but not by any of the Aussies, wanting to increase the size of their land holdings.
Or buy another farm for some/one of the kids.
Cashed up foreign buyers invariably distort the market; and or, price out locals, and therefore, need to be kept out.
In any event, there are plenty of former fruit farms looking for new owners, which may be one of the real reasons rural land prices seem to be depressed.
It just might be a case of supply and demand?
Too much supply, and too little demand.
There simply has to be better solutions to badly managed/over leveraged farms, than carpet bagging foreign investors/property speculators!
Rhrosty.

It is up to govt to get the right balance on behalf a variety of community concerns weighing up different issues against each other, as Rhrosty suggests.

This feelgood bs, she'll be right mate and we have nothing to worry about, is just that, feelgood bs.

Sure we could sell more and more to overseas rich elites, probably aided by unfair practices in their own society.

We could also create a housing boom if we just opened it all to foreigners, but how many Austs are going to accept that. I suppose the 100% free traders living in noddy land will

Candide
There are lots of reasons why foreign investors might be able to farm profitably when Australians can’t. They could have links to supply chains in their home countries that guarantee markets and prices. They might face fewer import barriers in their home countries than foreign-owned firms. They could have access to technology and expertise we lack. They might be able to spread risks across several locations or countries, mitigating the effects of natural disasters and climate variability than make farming so uncertain. They could have access to cheaper capital than Australian lenders will provide. Or, they may just be willing to gamble that the declining rainfall we have seen in parts of the wheat belt in recent years are not a permanent shift. There are probably others as well, but these seem to me the most likely.

Chris
There are limits on who can buy houses in Australia, and on the types of property that temporary resident can buy. If for some reason we removed all of those limits there would not necessarily be any effect on rents or house prices, as these are determined by the supply and demand for rental and owner-occupied property. Unless the changes affected the size of the housing stock or the number of Australian residents, the market fundamentals would not really change.

As it is, the rules currently encourage foreign investors to buy new or unoccupied housing, or build new homes, so my guess is their effect is to add to supply slightly and so make housing more affordable, though the effect is probably small.

http://www.firb.gov.au/content/faq.asp#nonresidents

Thanks Rhian

yep, nothing wrong with FDI.

Lets just make sure we get balance right and promote as much transparency as possible.

I think we need to take a much harder look at who is buying what, for what purposes.

And as we know, many deals are far from transparent.

Look at Sydney Airport which is owned by a monopoly, Macquarie Bank, which makes untold millions from being the only airport in a city of 4 million! And only they can operate a second airport if it ever happens. How transparent was THAT deal?

Cubbie Station was bought by a mainly-Chinese consortium and it now controls a vast amount of the massive water supplies from Queensland down into much of NSW.

Foreign investment- yes, we may well need it.
Foreign control of our precious resources? No thanks!

The ABS figures that Rhian linked to are for share of land area, not share of land value, as is pointed out in the policy paper that is linked to below. There is a big difference between a hectare of prime, well-watered agricultural land and a hectare of rangeland that might feed a few sheep or cattle in a good year. Assuming that there is no big discrepancy, then the share of agricultural land that is foreign owned is still relatively small, but there is no way that Rhian could possibly know what will happen in the future.

The Coalition has an August 2012 policy discussion paper on this issue. It doesn't oppose all foreign investment in agriculture, but calls for scrutiny of such purchases and accepts that there may sometimes be a case for restrictions.

"However, some restrictions may generate economic or social benefits that outweigh potential costs and protect the national interest, including by promoting the long-term stability of sectors critical to the economy."

"Many developed and developing countries adopt restrictions on foreign investment in agricultural land or agricultural businesses on national security grounds."

It is worth looking at their list.

As the paper explains, the Foreign Investment Review Board only has to be notified if the agricultural property that is being purchased is worth more than $244 million unless the purchase is by a foreign government controlled entity (which sometimes might be hard to detect). A foreign buyer could thus progressively buy up, say, all the dairy farms in a district without any oversight. There is no national register of foreign ownership of agricultural land or businesses.

"The creeping cumulative acquisition of agricultural land may be inconsistent with both the national interest and the interests of local communities."

http://www.nationals.org.au/Portals/0/2012/DPaper%20on%20Foreign%20Investment%20in%20Aust%20Agricultural%20Land%20and%20Agribusiness.pdf

Try to get rice into Japan, beef into USA or cars into Brazil ?

Australians ? The stupidist race on earth ?

Time to protect farmers and manufacturers with minimal tariffs.

At present, send farmers etc broke , then sell their depressed
land overseas .

Become tennants in our own land .

Labour and Liberal ? No idea.

Ralph

It is well over 80 years since futuristic business leaders first suggested improving the water requirements of our inland farming by moving south a small percentage of the huge volumes of northern water going to sea to enable expansion of agriculture in the north and south. The growth of the western states of USA (California etc) was largely due to recognition of the need to build canals to move water to farming regions actually was what initiated that states huge growth in agriculture and industry. It is time our government and agribusiness leaders recognised the cost of such dam & canal infrastructure is small in comparison to the huge economic benefits Australia can gain from expanding reliable food to the world. Lets hope muted suggestions of opening new dams around the country can lead to a surge in growth of needed infrastructure to profitably expand agriculture to a hungry world. Finance for such projects needs to be backed up by expressions of interest and investment from countries needing food. Joint ventures with interested parties should be considered as an option

TBA