Challenging foreign farm buyer fears

There is nothing more important for Australia's future than engaging with Asia, and when it comes to agriculture there is mutual benefit to foreign investment.

Foreign investment into Australia’s farmland and agricultural businesses has gained a great deal of media attention in recent times.

The release earlier this month of a government report on foreign investment and Australian agriculture has been useful in providing much needed statistical information, but responses to it have highlighted a worrying short-sightedness on policy.

The government has used the report to reaffirm its support for foreign investment and to articulate the issues that it considers when applying the national interest test to foreign investment proposals for the agricultural sector.

In contrast, the opposition has labelled the report a "whitewash” and is set to announce its own policy in coming months.

Much of the community and political debate has centred around an intuitive criticism of foreign companies "buying up the farm”.

The issue of who owns our land and agricultural assets is important and must be debated, but a bigger challenge – and the one we must rise to – is the need to reorient our thinking towards the future of our agricultural industry and the important role it can play in delivering sustained wealth for Australia, while contributing towards global food security.

Consider the following:

– the world’s population has just reached 7 billion and is set to increase to 9.5 billion by 2050. Asia is growing by some 65 million persons each year;

– each year for the last five years, and for the foreseeable future, around 5 million Chinese will stop growing their own food and move into an urban environment where they will need to import more food and have access to enhanced food and agri-services;

– the food and agricultural sectors are consolidating and globalising rapidly;

– we are witnessing the rapid growth of global biofuel production which is diverting agricultural production that would otherwise have been used as food;

– horizontal integration is leading to the creation of powerful, multi-commodity, global companies. Vertical integration is leading to the establishment of integrated supply chains from the farm to the consumer, with central ownership of production, processing and international distribution.

Australia is in a unique position as a major net food exporter positioned in that part of the world where growth in food demand will be greatest. Basically, we are a cost-effective source of high-quality food for the burgeoning Asian middle-classes.

How we respond to these new dynamics will shape Australia's opportunities in the decades ahead.

The real question, I posit, is whether our focus on foreigners "buying up the farm” is clouding our vision for what we want the agricultural sector – and Australia – to look like in 20 to 30 years’ time.

There can be no argument that foreign investment in our agriculture sector is not only inevitable, but essential. The forces of globalisation and consolidation will continue, and Australia will for the foreseeable future rely heavily on foreign capital to sustainably maintain and improve our agricultural output.

The question that we should be asking is not just who should be allowed to invest in the agricultural sector but how we can work with foreign investors and participants collaboratively to secure our longer term national security and prosperity.

Australia’s strength lies, in part, in its economic openness, its proximity to the biggest growth markets of the world and the ingenuity of its people.

That means we need to think creatively about:

– the range of business models that can be employed in the future. Just because a company is owned or controlled by foreigners does not mean that the assets cannot be utilised in the national interest;

– ensuring a commitment to continuing investment in Australian-based R&D in order to maintain skills and secure productivity improvement;

– actively encouraging foreign investment into regional and rural Australia to create new employment opportunities, bringing about much needed infrastructure investment and generally revitalising those areas;

– using some of the business models that Australian and Chinese companies are using in the mining sector, where they expand their operations by jointly exploring new business opportunities in home countries and in third markets.

Nothing is more important to us as a nation now than coming to an understanding on how we can engage with Asia and position ourselves to take advantage of the extraordinary opportunities that lie ahead.

It is timely and appropriate that the agribusiness sector works with governments, the Foreign Investment Review Board and others to agree the future ground rules for investment.

The recent report and the other upcoming reports will each add to our knowledge of the facts, but we must ensure that we are asking the right questions before we find that we have missed the opportunity.

To turn away our investors would not only be detrimental for their food security needs and national development, but also to our own.

David Olsson is a partner of Mallesons Stephen Jaques in Beijing and is the Chairman of the China-Australian Chamber of Commerce, Beijing.


{{ twilioFailed ? 'SMS Code Failed to Send…' : 'Enter your SMS code' }}

A text message with your verification code was just sent to {{user.DayPhone}}

We cannot send you a code via SMS to {{user.DayPhone}}

Hi {{ user.FirstName }}, please provide your mobile number.

{{ content.trialHeading.replace('{0}', user.FirstName) }}

We'll send you a text message with a verification code to start your free trial.

Log in

{{ content.upgradeHeading.replace('{0}', user.FirstName) }}

The email address you entered is registered with InvestSMART.

Login or to reset your password, select Forgotten password

Email is required.
Email must be a valid email.
Password is required.
First name is required.
Last name is required.
Mobile phone number is required.
Mobile phone number is invalid.
You must accept the terms and conditions.

Already an InvestSMART member? Log in

SMS code cannot be sent due to: {{ twilioStatus }}

Please select one of the options below:


Looks you are already a member. Please enter your password to proceed

You have entered an incorrect email or password

Email is required.
Email must be a valid email.
Password is required.

Please untick this box when using a public or shared device

Not a member? Sign up

Forgotten password? Click here

Your membership to InvestSMART Group recently failed to renew.

Please make sure your payment details are up to date to continue your membership.

Having trouble renewing?

Please contact Member Services on or 1300 880 160

You've recently updated your payment details.

It may take a few minutes to update your subscription details, during this time you will not be able to view locked content.

If you are still having trouble viewing content after 10 minutes, try logging out of your account and logging back in.

Still having trouble viewing content?

Please contact Member Services on or 1300 880 160

{{ upgradeCTAText }}

Updating information

Please wait ...


{{ productPrice }} / day
( GST included )
Price $0
Discount -{{productDiscount}}
GST {{productGST}}
TOTAL   (inc. GST) {{productPrice}}
  • Mastercard
  • Visa

Please click on the ACTIVATE button to finalise your membership

You have entered an incorrect email or password

Email is required.
Email must be a valid email.
Password is required.

Please untick this box when using a public or shared device

Not a member? Sign up

Forgotten password? Click here

Related Articles