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Overseas farmland ownership a debate without any facts

- Thursday, October 03, 2013

The noise surrounding overseas investment in Australian agricultural assets is likely to continue, with announcements that Indonesian interests have purchased a significant beef-breeding operation in the Northern Territory, and statements about the Indonesian Government's intention to purchase cattle breeding assets in northern Australia. Missing from the debate, unfortunately, is any reliable data about just how much of Australia's agricultural land is owned by overseas interests.

The recent announcement that an Indonesian live cattle exporting company has purchased a significant landholding in the Northern Territory is likely to re-ignite debate about overseas farm land ownership, but at the same time highlights the reality of the situation for the agriculture sector and the absolute absence of any reliable data to provide a clear information about this issue.

The Northern Territory landholdings in question have been on the market for some time, with the initial decision to sell reportedly triggered by the impact of the suspension of the live export trade in mid-2011. Australian investors have not shown much interest in purchasing the properties, despite the extended period of time during which they have been on the market. An Indonesian company with significant investment in the beef industry obviously perceives there are some synergies between its activities and ownership of the landholdings, and has offered what the owners believe is an acceptable price for the landholdings, and has agreed to retain the previous owners to manage the operation. This seems like a win for all concerned, and at the same time the purchase will strengthen supply-chain relationships between the northern beef industry and its key market, which will be positive for the industry more generally.

Yet there will undoubtedly be critics who will claim this transaction is an example of Australia selling off the farm and threatening its own future food security. These claims tend to get aired by the media, and reflected in public opinion polls, such as the recent poll carried out by the Essential group, which found that on 22% agreed that foreign investment in Australian farmland was good, while 55% were opposed to it.

One of the main reasons this debate continues at the simplistic level that it does is because there is an absolute lack of data available on foreign farmland ownership in Australia. The ABS was asked to do a rushed survey when this issue emerged in 2010, but due to the absence of any agricultural expertise in the ABS (an issue that was the subject of a recent Australian Farm Institute research report) the questions asked and the sample used were seriously flawed, and the results obtained were strongly challenged.

Contrast this with the situation in the USA. In that nation, foreign land ownership statistics are regularly reported and the issue is uncontroversial. Overseas farmland ownership statistics can be regularly reported in great detail because of a simple US regulation that requires overseas owners to report purchases or sales of farmland within 90 days of that transaction occurring. Yet despite both sides of politics in Australia committing to the development of a register of overseas land ownership that would held to clarify this issue and settle the debate, little apparent progress has been made, and the 'debate without facts' continues.

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