NFF seeks bars to foreign agriculture buy-outs

By MELISSA MEADOWCROFT
THE National Farmers Federation is calling for government intervention to prevent further foreign buy-outs of agricultural companies.

More than 20 companies have become overseas owned in the last three years as foreign governments make moves to ensure food security.

The Australian agricultural industry generates up to $39 billion dollars for the economy annually and has maintained a 10 per cent return on investment throughout the past ten years of drought and the global financial crisis. Despite this return, Australian investment into the industry is “limited” according to the Australian Farm Institute.

Independent Senator Nick Xenophon, in a media release, has called for parliamentary debate over the issue of foreign investment in the agricultural sector. The Senator has co-sponsored a bill with Greens deputy leader Christine Milne to apply a national interest test on all foreign investments.

Whilst the current foreign investment policies require acquisitions of interests in an Australian business or corporation which is valued above $219 million to go through an application process, any acquisition below this valuation is not investigated by the government.

With the advent of the global financial crisis in 2007, foreign state-owned enterprises entered the investment market. These enterprises invested heavily in the Australian industry with the aim of food security rather than the aim of monetary profits.

The National Farmers Federation believes that investment by foreign governments is not in the economic interest of farmers.

“Transparency in the supply chain comes into question, potentially jeopardising competition at the farm gate and depressing the local market…this could also lead to Australia’s own food security goals being compromised,” a NFF spokesman said.

Whilst current information from the Australian Bureau of Agricultural and Resource Economics (ABARES) shows that 99 per cent of broad acre farming lands are family owned, concerns are held over the ownership of supply companies. Currently we export more than 60 per cent of our agricultural production whilst still supplying 98 per cent of the fresh produce consumed in Australia.

This could change over the next 50 years, according to Federal Opposition spokesman on agriculture John Cobb.

“If we do not put in place sensible safeguards it will make it difficult for governments to regulate exports having allowed the foreign control of agribusiness in the first place,” he said.

The Minister for Agriculture, Joe Ludwig, has called for “cool heads” on the issue.

“Foreign investment is vital for Australian farmers and regional communities…however some members of the community are concerned about ownership . . . of agricultural businesses by foreign investors,” he said.

“It is in everyone’s best interest to prioritise good policy over anxious politics.”

The government has commissioned ABARES to examine ownership structures of agri-businesses in high profile sectors of the industry in order to gain a current and historical picture of foreign investment in Australian Agriculture.

The government will enter into discussions with Senator Xenophon and aims to work with the opposition to ensure the best possible outcome for farmers.