30 Aug Beef for Burgers and Chicken for Chow Mein: Foreign Investment in Australian Agriculture is on the Rise
Image: Interest in Australian farm land is increasing, with buyers from Europe, America and Asia keen to secure both land and established agricultural enterprises. Aerial Photo of an Australian Summer Landscape by Thennike from Wikimedia licensed under a Creative Common CC BY-SA 4.0
More than 10% of Australian agricultural land is owned by foreign investors, according to the Foreign Investment Review Board’s annual report (2015-2016).
The United Kingdom has the biggest slice of the pie, owning 25.5 million hectares – 52% of foreign-owned Australian agricultural land. The USA claims the second largest share with 7.7 million hectares, followed by the Netherlands (3 million hectares), Singapore (1.9 million hectares) and China (1.5 million hectares).
Interest in Australian agricultural land and agribusiness grew in the 2015-2016 financial year, with 227 approved foreign-backed transactions totalling $4.6 billion – an 80% increase on the previous year. The United States was the most active spender, investing $1.3 billion, followed by China ($996 million).
No Kidding about Foreign Investment
The sale of S Kidman & Co’s cattle stations – located in Western Australia, South Australia, Northern Territory and Queensland – was a highly contentious story in 2015.
As the largest privately held portfolio of land in Australia, there was significant community unease about a potential sale to a largely Chinese backed entity, especially given the Woomera Prohibited Area (WPA) defence zone makes up a significant portion of Anna Creek Station.
The sale was halted in 2016 by the Treasurer, who cited the proposal as being ‘contrary to the national interest’. In October of the same year, nine of the ten properties were sold to Australian Outback Beef Pty Ltd, owned in majority by Gina Reinhart’s Hancock Beef. The remaining 33% is owned by Chinese entity Shanghai CRED Real Estate Co. Ltd.
Anna Creek – the world’s largest cattle station – was sold in a separate transaction to neighbouring William Cattle Company, alleviating fears about foreign investment in Australian defence land.
Everybody Needs Good Neighbours
Attention from foreign investors is being driven by Australia’s capacity to provide large volumes of quality food products for a growing global population. Asian countries, including China, are facing unprecedented rates of population growth, urbanisation and income growth – creating more demand for Australian food products.
In 2016, Van Diemens Land Company (VDL) was sold for $280 million to Moon Lake Investments, owned by Chinese businessman Lu Xianfeng. As Australia’s largest dairy company, there was significant interest from buyers including two Australian bidders. Following approval from the Foreign Review Board, Moon Lake was announced as the successful purchaser. Rival bidder TasFoods launched legal proceedings against VDL’s parent company claiming they reneged on a previous sale agreement. The Melbourne-based company was awarded an out-of-court settlement of $1.25 million.
Contrary to popular belief, VDL has always been a foreign owned entity. Established 190 years ago through a land grant, VDL was established on a land grant and was sold to Moon Lake by the New Plymouth District Council (New Zealand).