Revelations at a senate inquiry hearing raised more questions than answers about foreign ownership of Australian agricultural land and assets, Nationals Senator Fiona Nash said.
Senator Nash is a member of the senate Rural Affairs and Transport committee that is holding an inquiry into the Foreign Investment Review Board National Interest Test. The inquiry is in response to growing concerns about the level of foreign investment of agricultural land and assets.
Recent examples include US company Cargill’s takeover of the former AWB’s grain trading and handling business; Cargill’s 50 per cent stake on Teys Bros (Australia's largest family-owned beef processing and exporting company); Chinese mining company Shenhua Watermark investing $213m in 43 farms in the NSW Liverpool Plains; and Spanish company, Ebro’s failed $610m bid for Sunrice.
Under Labor, Australia has seen a ten-fold increase in foreign investment in the last three years. There has been a marked change in the activity by foreign companies from investment in agriculture to ownership and control of supply lines. There is also growing concern that foreign countries are buying Australian farmland with a view to sending produce directly back to their home country.
Foreign Investment Review Board (FIRB) officials confirmed yesterday that no foreign acquisitions of Australian agricultural land and water have so far been rejected.
Other revelations include:
- Senator Nash asked FIRB officials if they considered whether Australia was at risk of losing control of its agricultural land and assets to foreign investors. They said the government’s concern is the extent to which Australia can remain a reliable supplier of “food stuff”.
- They were asked if Cargill’s takeover of Australia’s grain supply chain didn’t bother them to which they responded they consulted on the Cargill issue. They were asked who they spoke to on whether the Cargill takeover was in the national interest test, to which they were reluctant to say.
- FIRB officials were asked if they are briefed on the global food security situation in detail. They replied they receive a general briefing.
- Senator Nash asked whether foreign investors were required to declare if they’re government controlled, and if so, how the watchdog would know if they didn’t. The officials replied that they didn’t have any knowledge of any such violation.
- Senator Nash asked how they monitor compliance of promises foreign investors made to gain FIRB approval. They said there were case officers and a database of undertakings by foreign investors that is looked at periodically.
- Senator Nash asked if they monitored whether foreign investors changed their practices since their undertaking to the FIRB. They replied the watchdog receives letters from the investors’ lawyers. When pressed further, they added they “keep an eye on” the market.
- FIRB officials were asked how they assess the impact of foreign investment on regional communities. They replied they seek advice from relevant departments and that they don’t particularly go out into the regional communities.
- FIRB officials stated undertakings are only made public at the discretion of the minister. Senator Nash asked how the public could be confident that those undertakings that are not made public are appropriate.
Senator Nash said questioning of Australian Bureau of Statistics officials also raised concerns. ABS officials were tasked by the government to survey farm businesses about foreign ownership.
- 11,000 of 165,000 farm businesses were surveyed and a $5000 turnover threshold was used.
- They said there were cases where they were unable to trace back to the ownership of some businesses.
- There was no time to do field visits.
- They did not survey mining companies, trusts or investigate complex corporate arrangements.
- There was no time to include questions on foreign ownership in the agriculture census in June that was sent to all Australian producers.
- They only looked at the number of farm businesses, not the value of production.
“Yesterday’s hearing ended with more questions than answers about the way in which foreign acquisitions of our farmland are handled and monitored,” Senator Nash said.
“It did little to instil confidence in the process and the way in which the FIRB and the Gillard government will handle future foreign takeover bids of our farmland and assets.
“The senate committee intends to ask many more questions to get to the bottom of this. In the meantime, the Coalition’s established a Working Group to investigate options to strengthen the rules governing the sale of Australian agricultural land and agribusinesses to foreign entities.”
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