Canberra | Reuters –– The Australian government has sided with farmers who say official data vastly underestimates foreign ownership of the nation’s farmland, as it moves to clamp down on overseas purchases of agricultural land.
Foreign ownership is a key concern for many farmers, a crucial part of the conservative government’s support base, who worry that anecdotal reports of Chinese investors buying large amounts of prime agricultural land will strip the country of its food security.
Others in the industry, however, say the level of foreign investment is still way too low to present a threat and are concerned the government’s moves will deter much needed agricultural investment from grain silos to new ports.
A 2014 survey of agricultural businesses by the Australian Bureau of Statistics (ABS) put the figure at around 12 per cent, but Agriculture Minister Barnaby Joyce told a conference this week the figures did not reflect the real picture.
“The ABS statistics are way below what I think the truth is,” said Joyce, himself a farmer in northern Queensland state. “A lot of people just don’t bother to fill out the ABS paperwork if they don’t want their story being told.”
The exact size of foreign ownership is almost impossible to gauge as all acquisitions of farmland under the value of A$252 million (C$244 million) have been free of regulatory oversight.
The ABS put foreign owned farmland at just under 50 million hectares, or an area the size of Spain, but the figure also drew widespread disbelief within rural communities.
Australia’s National Farming Federation, the industry body representing the interests of agricultural producers, said the true number could be more than 20 percent.
“It is definitely higher than 12 per cent, perhaps around the late teens or even the lows twenties, but that is a guess based on anecdotal evidence,” said Simon Talbot, the federation’s chief executive.
Facing political pressure, the government last month announced a crackdown on foreign ownership. Agricultural land acquisitions over A$15 million (C$14.5 million) will be subject to regulatory approval from Australia’s Foreign Investment Review Board (FIRB).
The tax office will conduct a “stocktake” of land ownership in June, with a registry of foreign ownership to come at an unspecified date.
The changes have generally been welcomed by farmers, but others say the new rules are more of a sop to public opinion and will have little impact on Australia’s food security.
“You would have to buy and invest an enormous amount to have any particular impact on food security or ability to influence the market,” said Mick Keogh, executive director of the Australia Farm Institute think-tank.
Official figures also show the U.S. is the largest holder of Australian farmland ahead of Canada, Singapore and China.
In any case, much of the most recent discontent from Australian farmers has centred in the beef and sugar industries, where farmers have complained that they operate at the whim of powerful processors.
Beef farmers have called for an inquiry after several of the country’s largest processors boycotted livestock auctions amid a row over weighing animals, pushing down prices, while sugar farmers are upset that foreign-owned processers plan to split from the country’s single marketing desk.
Australia’s Business Council, which has estimated the agriculture industry needs A$1 trillion of overseas investment by 2050, complained that the new rules were undermining the country’s push to boost agricultural output.
“The changes announced by the prime minister risk sending a negative message to overseas investors,” added Joanne Grainger, president of the Queensland Farmers Federation.
— Colin Packham is a Reuters commodities correspondent based in Sydney.