The report into foreign investment in Australian agriculture that the Rural Industries Research and Development Corporation commissioned ABARES to carry out for the Australian Government that was released this morning contained very little in the way of new information, has been subject to some serious 'spinning' by the government, and reveals more about a determination to avoid any additional government agency costs than it does about foreign investment.

The report was released this morning, and comes on the back of a number of recent media stories highlighting overseas interest in Australian agricultural assets, including some front page stories in the Australian Financial Review (subscription required). It has been given extensive media coverage (see here, here and here).

What was interesting about the report is that it contained no new statistics, and consisted mainly of discussion about the merits of foreign investment in agriculture (which few argue with), as well as providing some case studies and anecdotal information.

Three quotes from the Summary of the report are quite telling. The first two highlight that, apart from the 1984 and 2010 surveys by the ABS, there is no data about foreign investment in the industry, and the data from the ABS simply identifies the number of businesses that have some foreign investment and the area of land owned by those businesses, but not how much production they account for. (Note careful use of words like 'it is understood, and 'appears'.)

"Foreign ownership of agricultural land in Australia has gone through periods of expansionand contraction. It is understood to have been increasing in 2010 and 2011, in part because ofpurchases of land by mining companies."

"Foreign investment in Australian agribusiness appears to be higher than in farmland."

When it comes to investment by foreign governments, the report explains that investment by overseas governments are subject to Foreign Investment Review Board (FIRB) scrutiny even if they are below the normal $231 million minimum threshold, but provides no data from the FIRB about how much of this type of investment has occurred, noting only that some recent investments "would have proceeded only after being assessed by the FIRB and determined as not contrary to the national interest."  Obviously, ABARES was not given access to the information that the FIRB must presumably have.

Perhaps the most telling statement in the entire report was the last paragraph of the Summary, which read as follows;

"The regular collection of information on foreign ownership might be considered as a means of providing transparency to the public and contributing to better-informed policy making in the future. Funding the collection of data on ownership of land and water by an agency such as the ABS, possibly as part of the agricultural census every five years, would be one approach. An alternative would be to maintain registry data by collecting information at either the national or state level on transactions from buyers and sellers of land. However, collecting and maintaining data has a cost to the agency charged with such a responsibility, as well as to respondents providing information to that agency."

In other words, to collect more useful data on this subject would involve some cost, and no Australian Government agencies have any budget flexibility to incur extra costs because a balanced budget has to be delivered next year. Perhaps adding an extra question to the 5-yearly Agricultural census might result in some extra information at little extra cost, but otherwise it will be up to State land agencies to wear the costs of creating such a register, if they want more information. (Interestingly, Queensland already has such a register, the data from which was provided in the report - and somewhat misleadingly referred to).

What would be interesting to know is whether the first draft of the report included a stronger recommendation on creating a register of foreign land ownership and compiling regular data. Its a fair bet such a recommendation would not survive Treasury scrutiny in the current political environment!