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

The first objective data on foreign ownership of Australian farms for over 25 years was issued by the Australian Bureau of Statistics last week, and it seems foreigners haven’t been buying up the place after all.

Based on a survey of 11,000 agricultural businesses, 89 per cent of total agricultural land is entirely Australian owned while 92 per cent is majority Australian owned. Moreover, foreign ownership is only fractionally higher than the Agricultural Census of 1983-84 showed.

Most of the 8 per cent more than 50 per cent foreign owned is in the Northern Territory, with another big chunk in Western Australia. This is no surprise – foreign ownership of northern cattle stations has been common for over a century.

Probably about the only thing that has changed, which the survey did not examine, is the nationality of the foreign owners. Whereas once they were mainly British, 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.

Of course there are still plenty who think even this level of foreign ownership is too high, or suspect foreigners will sneak in and buy everything if we relax our vigilance.

The Victorian Farmers Federation says tighter controls are needed. The National Farmers Federation thinks it’s really about how much production is foreign owned, not just the land.

The Senate Standing Committee on Rural Affairs and Transport is conducting an inquiry into whether the Foreign Investment Review Board national interest test should be altered in relation to agricultural land and what impact this will have on food security.

In the NSW parliament even the Shooters and Fishers Party has weighed in on the subject, asking, “Does anyone really think that the food grown in Australia by foreign interests will be used to feed Australians?”

Wariness of foreigners in agriculture is nothing new, in Australia or elsewhere. However, it has intensified in recent years due to countries like China, Egypt, Japan, South Korea, Saudi Arabia, India, Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates seeking to ensure their future food security by buying or leasing fertile land in other countries.

Since 1971 Brazil has had a law controlling foreign acquisitions of farms, depending on the region, of greater than 240 to 5,000 hectares. These restrictions were not enforced between 1998 and 2010, leading to considerable international investment (although nobody knows exactly how much). Concerns about Chinese state-owned firms and Middle East sovereign wealth funds led to the law being enforced, although an increase in the threshold is now under consideration.

In Argentina the government is proposing a law that will restrict foreigners from buying land larger than 1,000 hectares. About 7 per cent of Argentina’s farmland is said to be foreign owned at present. Uruguay is considering a law similar to Argentina, and its foreign ownership level is thought to be at least 20 per cent. Ironically, most of the foreign owners there are Brazilian or Argentinian.

Some have gone further. In Paraguay land ownership is restricted to nationals, although for years there have been ways of circumventing this. Several Canadian provinces prohibit foreigners from owning non-metropolitan land totalling more than 20 acres.