Restrictions imposed on Chinese investment in agriculture are clearly political according to the Australian Chinese Relations Institute or ACRI. It says that its views are supported by a new research. It says that the timing is worst, coming at a time when Australian farmers are eager about booming Asian markets.
Chinese farmland investment worth over $15 million and agribusiness worth $55 million must gain FIRB or Foreign Investment Review Board approval as in November. The Australian Labor Party has described them as ‘protectionist’ and opposed the changes. Barnaby Joyce, the Federal Agriculture Minister, said the measures were being put in place because ‘it’s what Australians want’, on the passing of the legislation.
He said, “We’re lowering the threshold at which FIRB scrutiny is required because overwhelmingly that is the view of the Australian people”. “They want greater protections on who owns what, and a greater understanding of who owns what, and the most sensitive area they look at is the actual ground we stand on.”
But the Australian government’s view does not confirm to the outcome of the research carried out by University of Technology Sydney (UTS) Business School commissioned by ACRI.
According to James Laurenceson, the Deputy Director and economist, while it’s true that many Australian are ‘far from exuberant about foreign investment in agriculture’, they did not seem too concerned which country was doing the investment. “We found the public actually prefer the bigger forms of investment,” he said. “While investment from the USA was preferred to investment from China, it showed the public preferred investment from China that resulted in an Australian agribusiness being 50 per cent foreign owned to one from the US that led to a 62 per cent overseas stake.”
Mr Laurenceson said that the research was conducted across Australia, in both urban and rural areas, and one of the surprising findings was there was very little difference in attitude to foreign investment. It is generally upheld in agricultural circles that it is the urban populations which are opposed to foreign investment in farming. It is not only China but Japan and Korea as well, which will now require FIRB nod, especially when it comes to the State Owned Enterprises or the SOEs.
Added Mr Laurenceson, “What the research found was the public is indifferent to investment by a foreign company that is state owned or privately owned” and believes the media to be responsible for a lot of anti-Chinese investment sentiment.
“The USA for example can invest up to $1.1 billion without needing any checks by the Australian government or FIRB.” And the strict criteria also don’t apply to New Zealand and Chile.
“But the truth is it’s actually China that’s buying more of our agricultural produce than any other country.”