Selling off the farm?

That concern has not been allayed by the recent sale of the former Australian Wheat Board (AWB) to the Canadian company, Agrium, the sale of CSR's Sucrogen to the Singaporean company Wilmar International Ltd or the sale of the Australian Barley Board to Viterra, another Canadian company.

Queensland based Australia Meat Holdings operates 10 abattoirs, 5 huge cattle feedlots and is the largest meat processor in Australia. It processes 1.5m head of cattle, employs a workforce of 4,900 and exports 27% of Australian beef exports. It is now owned by the worlds largest meat processor, JBS, a Brazilian company.

Have these or other change of ownership made the slightest difference to the operations of companies which have been purchased by overseas interests? No.

Foreign investors have paid high prices to acquire ownership of companies in the belief and expectation that they can manage them better, apply synergies and expertise and yield an acceptable return on their investment. They are entitled to realise those expectations.

As a result, most of the companies which have passed into foreign ownership have improved their performance, continued to serve farmers and provided new invigorated competition. More often than not, primary producers have benefitted from foreign investment. However this has meant that profits earned in Australia have been sent overseas, just as Australians investing overseas bring profits into Australia.

Conclusion

It has been argued that the Australian attitude towards foreign investment in land and primary industries is too liberal, even open slather and should be tightened. There are cases where this might be appropriate, particularly where the investor is a foreign government that may seek to act in a way which is not in our national interest.

However, it has to be said that at present, foreign investors are not permitted to operate other than in accordance with our laws and regulations. Regular inspections ensure they do.

The area of land purchased by foreign companies is a small fraction of the total land area suitable for primary production. Federal and State governments monitor proposed and actual land sales and investment in Australian companies.

Where any one investment exceeds $230m., FIRB is required to make a recommendation to government on whether the transaction would be in the national interest and the Minister then decides if it should proceed.

In the case of freehold land, particularly agricultural land, the $230m threshold could be reduced, possibly to $100m.

Public confidence that we are not selling off the farm could be further enhanced if the government was required to publish FIRB reports in full and not just their recommendations.