Most foreign owners of Aussie farmland are Brits

The Register of Foreign Ownership of Agricultural Land, released by the Australian Taxation Office, shows the biggest source of foreign landowners and long-term leaseholders is Britain, followed by the US, the Netherlands, Singapore and China. All in
The Register of Foreign Ownership of Agricultural Land, released by the Australian Taxation Office, shows the biggest source of foreign landowners and long-term leaseholders is Britain.PHOTO: BLOOMBERG

Register shows Chinese hold less than 0.5% of all farmland, contrary to popular belief

Australia has released a long-awaited register of foreign ownership of farmland following concerns that too much land has been sold off, particularly to Chinese buyers.

The Register of Foreign Ownership of Agricultural Land, released by the Australian Taxation Office last Wednesday, shows the biggest source of foreign landowners and long-term leaseholders is Britain, followed by the United States, Netherlands, Singapore and China.

The register shows 13.6 per cent of Australia's farmland - amounting to 52.15 million hectares - is held by foreigners. Of this,  53 per cent is held by British entities and 15 per cent by US entities.  Somewhat surprisingly, Chinese entities hold less than 3 per cent of foreign- owned farmland.

The compilation and release of the register, which covers sold land and long-term leases, was announced by the federal government last February, after growing calls to curb foreign ownership. 

But the news immediately prompted fresh debate about whether too much land has been sold.

Australia's Treasurer Scott Morrison, a Liberal Party MP, seized on data from the register to argue that the nation was not handing over excessive amounts of farmland to offshore interests. 

Warning against an apparent rise in protectionist sentiment in Australia, he said the register showed that less than half of 1 per cent of Australia's total agricultural land was owned by Chinese interests.

"We want people to be confident about how foreign investment is run in this country," he told 2GB Radio. "I know there has been an increase in Chinese interest in a lot of properties and I know it gets a lot of attention when one happens."

In the past year, Mr Morrison has twice blocked the sale of the nation's largest property holding, S. Kidman, to Chinese investors, saying the deal was not in the national interest. 

A survey by the Lowy Institute, a think-tank, released in June, found that 87 per cent of Australians opposed the government allowing foreign companies to buy farmland. It also found that Chinese investment had a negative effect on the way a majority of Australians - 59 per cent - view China. 

The public anxieties appear to stem from concerns over Chinese state-linked firms buying significant assets and the sharp increase in recent Chinese investment.

Trying to appease concerns over excessive Chinese ownership, Mr Morrison pointed out that the largest foreign land purchase he has approved as Treasurer has been a sale worth more than A$400 million (S$410 million) to Dutch and Canadian interests. He added: "That one transaction eclipsed all the other major transactions that involved Chinese interests".

However, his efforts to emphasise the low levels of foreign ownership were rejected by Deputy Prime Minister Barnaby Joyce, head of the rural-based National Party, the junior partner in the ruling coalition.

Mr Joyce said he was concerned about the large amount of land owned by foreign interests, saying it added up to more than double the size of the state of Victoria.

"We have a duty as a politicians first and foremost to make sure the greatest beneficiary of the Australian assets is the Australian people," he told broadcaster ABC News.

Agriculture and food processing contributes about 12 per cent to Australia's total gross domestic product and employs more than 300,000 people. Australia produces far more than it can consume and exports about 60 per cent of its total produce, amounting to about A$45 billion a year. The biggest exports are beef, wheat, other meat, dairy products, wool and cotton.

Farming has long been seen as a central part of Australia's modern history and self-identity, which has often led to concerns about "selling the farm" to foreigners. 

The National Farmers Federation, the main body that represents farmers, welcomed the release of the register, saying it helped to provide transparency and combat "myths" about  who owns Australia's farms.

The federation's  chief executive, Mr  Tony Mahar, told The Straits Times that foreign investment had been "overwhelmingly positive" for farmers. He said the main cause of concern about foreign investment was "the philosophical position that some people have that we should own our own land".

"We need (foreign) investment to be a prosperous innovative industry," he said. "We welcome it as long as the right mechanisms are in place."

Mr Mahar said further information should be made available such as data on the monitoring and compliance of foreign investors with local tax laws, research levies and conditions on their use of the land.

"To the person in the street, it does not sound right that another country owns part of the country," he said. "The more we can respond by showing the benefits of foreign investment, the more we will have a productive discussion."

Singaporeans hold 1.9m hectares

Singaporeans own or hold long leases on 1,862,000ha  of Australian farmland - an area that is more than 20 times the size of Singapore itself.

Analysts say these landholders include a mix of hands-on owners, who directly manage the farms, and investors who lease the land to other farmers.

An  agricultural investor, Mr Bruce Cheung, who is reportedly based in Singapore, has made headlines in Australia after buying historic Pardoo cattle station in a remote stretch of north-west Australia more than a year ago.

His plan is to produce some of the world's best wagyu beef.

He told The West Australian newspaper in May that he had a "dream of transforming the beef industry in our neighbourhood".

"By the end of 2019, we should have 10,000 to 11,000 pure-bred animals on our station and the others who join with us," he said.

He is far from being the only large-scale Singaporean investor in Australian farmland, though he is perhaps more hands-on than some.

Mr Rawdon Briggs, a director overseeing rural and agribusiness at real estate firm Colliers International, said  Singaporeans included a mix of owner-occupiers and "buy and lease" investors, but he believed most were in the latter category. 

"Singaporean  investors tend to use managers here in Australia," he told The Straits Times. 

"They would be co-investing with others, as opposed to commercial property where they tend to invest directly."

Mr Briggs said foreign investors were crucial to the survival of Australia's farming sector, especially as climate change made it prudent to own holdings in different regions. This effectively insured against the risk of some properties suffering due to drought or other extreme weather events.

"Due to climate change, if you are able to have investments across countries and valleys and states, your risks are reduced dramatically," he said.

"With a geographic spread of portfolios, corporate farmers are able to weather some significantly adverse climate conditions."

A version of this article appeared in the print edition of The Straits Times on September 12, 2016, with the headline 'Most foreign owners of Aussie farmland are Brits'. Print Edition | Subscribe