June 5, 2012

 

China considers investing in farmland development in Australia

 

 

In a joint effort to increase food security for the world's most populous nation, China is considering billions of dollars in investment to develop farming land in northern Australia.

 

A study into the proposal - where Chinese firms would directly invest in northern farms focused mainly on beef, sheep, sugar and dairy, would be published by the two countries within weeks, according to the Australian Financial Review on Thursday (May 31).

 

China, with 1.3 billion citizens, has till now focused on opening up farmland in South America and Africa to meet the demands of the growing Chinese middle class. It is now seeking new sources, including in Australia, to meet its increasing demand for beef, sheep, sugar and dairy, the Sydney Morning Herald, reported.

 

Over a quarter of the meat produced globally, is now eaten in China, and at 71 million tonnes currently, China's annual consumption of meat is over twice that of the US. In 1978, China's annual consumption stood at eight tonnes.

 

In addition to China, Qatar's Hassad Food and Singapore's Olam International are among companies that have acquired Australian farmland to increase their own national food security, AFP reported.

 

Meanwhile, according to trade and competitiveness minister Craig Emerson, the study, which started last May, would not involve "selling up" valuable national resources, or import of overseas labour to produce food for China. He said it was designed to lift Australian food production for world markets. The plan has however, angered opponents who view it as an attack on Australia's sovereignty.

 

"I just think we've got to be more emotional, more passionate, this is not xenophobic, there are clear loopholes in the Foreign Takeovers Act and in the Taxation Act and this is a decline in the meaning of sovereignty," ABC News quoted liberal senator Bill Heffernan as saying.

 

The government in January published a study into Australian agriculture which revealed that foreign firms controlled about half of the country's key food industries, though overseas investors owned just 11% of its farmland, a figure comparable to 30 years ago.

 

Opponents say the plans for attracting Chinese investment to transform vast tracts of undeveloped land in northern Australia for farming would come at the cost of giving Australians access to affordable, good quality food.

 

The trade and competitiveness minister, Craig Emerson, has confirmed that the government was undertaking a joint study with China to examine the policy changes needed to facilitate a massive investment by Chinese agricultural interests.

 

According to Emerson, the plan was designed to lift Australian food production for world markets.

 

The Nationals senator, Barnaby Joyce, who had pushed for tougher restrictions on foreign ownership of land - a move seen as breaking ranks with the Liberals - said it was a worry for urban as well as regional Australians, adding that while the move by the Chinese was "astute", it exposed the lack of planning for the food security of Australians, since Australia was now a net importer of food - and the resulting inflation had an impact on food prices.

 

He said it was not that Australians would run out of food; it was the form of food that they would be able to buy, and that was happening right now. He said selling Australian land to a foreign state-owned enterprise had troubling implications, as those from strong countries like China could end up holding it in perpetuity.

 

He denied his views were xenophobic and said foreign investment laws of other countries did not allow foreign entities to buy land. He said land could not be bought by outside entities in China, Japan, and even in South Korea, it was difficult to buy in the US and New Zealand had vastly greater controls.