The less you know, the more you fear

Media attention on the issue of overseas farmland ownership in Australia has spurred a great deal of debate, with arguments from either side growing progressively one dimensional. Opinions have tended to swing between those that are xenophobic and those that are overtly liberal. With no government record keeping on overseas farmland ownership established at this stage, the media is playing an important role as the interim gatekeeper. However, media have tended to miss some of the more crucial issues, and have failed to scrutinise the current quality of information and data. Foreign direct investment (FDI) has always been a strategic driver of growth for parts of Australia’s economy, including agribusiness, infrastructure and consumer goods manufacturing. The Australian agricultural landscape has also benefited from FDI for more than 100 years. The recent move by the Indonesian Government to back the purchase of one million hectares of Australian farmland has revived the longstanding debate about the role of FDI.

A recent Ballarat Courier article titled, ‘Land ownership impacts on its inhabitants’, is an example of the media playing on the fears of what is foreign more than analysing the facts. In the article, the journalist manages to draw a relationship between FDI and terra nullius in 1871, when the British crown settled in Australia and deprived Aboriginal people of their land, to infer what could potentially happen if Australia were to continue to let Chinese investors buy Australian land. The article implies there is a risk of a possible invasion using as a starting point the recent closure of a McCain’s potato factory. Everybody is entitled to their opinion, but comments like this are better suited to fiction writing.

Media reports on the issue of overseas land ownership in Australia don’t have to be a caricature to be misleading. In January 2012, the Australian Financial Review (AFR) published an article entitled ‘Chinese want slice of rural Australia’. The article reports on a group of Chinese companies with a shopping list of Australian agribusinesses and farmland they wish to purchase. Although this story appeared to comment mainly on competitor’s interests and some hypothetical deals, it was actually about a meeting between Chinese investors and representatives of Austrade. It is the role of Austrade to ‘help companies around the world to source goods and services from Australia’ and there is nothing unusual or exceptional in Austrade meeting with overseas companies to discuss hypothetical deals. However, the article doesn’t provide any details about the proposed deals or the targeted businesses. It provides a list of ‘overseas farmland deals’ and mentions a review process into foreign ownership by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) and the Rural Industry Research and Development Corporation (RIRDC). If the media had taken the time to look at this review process more closely, they would have probably found information for a more complete story, although that may have been less ‘newsworthy’.

The data on foreign ownership released by ABARES and RIRDC was sourced from an Australian Bureau of Statistics (ABS) survey into FDI in 2011. At that time the government was trying to appear ‘proactive’ in the midst of a heated and xenophobic debate about the purchase of Cubbie Station by Chinese investors. The most recent statistical survey on foreign land ownership was conducted in 1983. That survey was quickly updated by the ABS with 11,000 agricultural businesses surveyed out of a total list of 165,000. The survey found that about 5.8% of Australian farm land was held under majority foreign ownership, and a further 5.3% of land had some level of foreign ownership. More than half the foreign owned land was either in the Northern Territory or Western Australia.

The data about foreign ownership of agricultural land is also of limited value, because most foreign ownership of agricultural assets in Australia is actually in the processing and marketing sector – which are not classified as agricultural businesses by the ABS.

In summary, the issues surrounding FDI in Australian agriculture are much more complex than portrayed in the media. It is evident that significant discussion needs to occur by government, media, and industry and much better information needs to be made available, so that debate on this issue is pertinent, factual and helps Australian agriculture move forward. 

Keep up-to-date with discussions of current issues in Australian and international agriculture policy by visiting the Australian Farm Institute’s blog and chat room ‘Ag Forum’.

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Images: Jimmy Harris, Mick Keogh, Gaétane Potard, Kyle Taylor,