As debate rages about the level of foreign investment in Australian agricultural land and supply chains, the Federal Government has bowed to pressure to consider setting up a transparent register of land ownership by overseas interests.
Agriculture Minister Joe Ludwig and Assistant Treasurer David Bradbury announced last week a working group would consult with State and rural industry bodies about developing a register of who owns what farmland in Australia.
The working group, led by Treasury, will consist of senior departmental officials. A timeframe for reporting back to the Government has not been set, but an email consultation process is expected to start immediately.
Stakeholder views will be sought about what foreign sovereign and private ownership interests should be included on the register, how to monitor and enforce compliance with the register, how information would be reported and how the register would relate to existing State and Territory laws, including the Foreign Ownership of Land Register in Queensland.
Overseas investors are currently required to seek approval for land acquisitions from the Foreign Investment Review Board (FIRB) if the sale of a property exceeds $244 million, which was increased from $231 million earlier this year. The trigger point is zero if sovereign funds are used.
The working group will not specifically examine the FIRB thresholds, but it is likely this will be discussed during industry consultation.
In New Zealand, farms bigger than five hectares require government approval and a public goods test before being sold to overseas investors.
As WAFarmers has highlighted, the average value of WA agricultural properties is between $1 million and $10 million and the bulk of the State's farming land could be sold off without attracting FIRB's attention.
In 2010-11 FIRB approved 17 sales in the agricultural sector worth $1.38 billion, which was the same number of approvals as the previous 12 months.
The Australian Bureau of Statistics (ABS) also reports on levels of foreign ownership and its latest estimates point to about 11 per cent of total agricultural land across the nation having some degree of overseas investment.
In WA, the ABS estimates about 3.1 million of a total 117 million hectares of land for agricultural production has more than 50 per cent foreign ownership.
Some industry sectors say the FIRB thresholds are too high and the ABS system, which includes farms at $5000 ownership, is too biased towards small farms and also may have questionable value.
This month, WA Agriculture Minister Terry Redman called for the establishment of a foreign ownership register of land in this State to ensure informed debate on the issue and to corral overseas interest in investment.
Such a move has the backing of lobby groups WAFarmers, the Pastoralists and Graziers Association and the National Farmers Federation (NFF).
The NFF is pushing for a national land register of foreign investment, an annual report outlining changes to holdings of agricultural land held by foreign interests and a review of policy settings around foreign investment, including FIRB approval thresholds.
The independent national farm policy group, the Australian Farm Institute (AFI), has also been campaigning for greater transparency of foreign ownership and investment into agricultural land and downstream processing in Australia.
AFI director Mick Keogh said many overseas investors, such as Hassad Food which was actively buying land in WA, recognised the value of transparency and had indicated they would have no problem with more scrutiny of their activities on Australian soil.
"The US and New Zealand have registers for foreign investment in agricultural land that ensure a balance of informed discussions about land ownership," he said.
Mr Redman said such a register in WA was crucial to the debate about the future use of WA agricultural land and food security and he has approached the State Minister for Regional Development, Brendon Grylls, to help get this set up.
He said the State Government had no control over overseas investment but there was a State interest in foreign ownership where the Government injected funds into specific projects, such as the expansion of the Ord Irrigation Scheme.
Mr Redman said he supported foreign ownership of farming land and downstream processing in WA as an opportunity to grow and develop the State's agricultural sector, meet the needs of other countries and secure this State's food security.
"Agriculture is an industry that is crying out for capital and one source of funds is from foreign investors," he said.
"We need to be building our productive capacity and this will help to secure future export demand for our State production.
"I would like to see this State as a preferred global food supplier, especially to help become part of Asia's food bowl."
Mr Redman said it was difficult to assess the scale of foreign purchases in WA but there was definite interest in land acquisition and investment into processing facilities for dairy and meat.
"I don't think we need to be spooked by foreign investment, but capitalise on opportunities for supply chain investment and development of long-term supply contracts," Mr Redman said.
"I have not yet come across a farmer in WA who would be unhappy about someone coming to this State to build a flour mill or an abattoir with foreign investment funds."I have therefore come to the conclusion that we need to work closely to try to corral the potential investments that might come into WA to support growth of the sector here."
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