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Monday, 21 February 2011
Page: 763

Mr JOHN COBB (12:04 PM) —I rise today to speak on an issue of major concern in Australia and in Australian agriculture, that of foreign ownership of agribusiness and agricultural land. The debate very much centres on the fact that, in recent times, deregulation and other issues have meant that what used to be foreign investment—which has been very good for Australian agriculture both in land and in agribusiness—has become foreign takeover of agriculture and agribusiness in particular.

While currently we export the majority of produce from broadacre agriculture, we are very much dependent on domestic production for much—in fact, most—of our food. For example, 98 per cent of fresh fruit and vegetables bought and eaten by Australian consumers are grown in our country. The fact that the world population will grow from around 6½ billion to nine billion by 2050 gives a different outlook on it. If you understand that other countries are already preparing for tighter food supply by strategically buying into agricultural supply chains around the world; and if you take into account the fact that the new giants of the economic world, India and China, and the sleeping giant, Brazil—which is no longer asleep—now have money to invest around the world, you start to realise that, over the past five years or so, food security has become an international issue. Global companies as well as nations themselves are very aware of the need to secure their supply lines. Today, countries that once did not have money for foreign investment now do. If you couple that with a tenfold increase in reported foreign investment in the agricultural sectors over the last three years or so since Labor have been government, you begin to see the nature of the problem.

As I said, foreign investment has been good for agriculture. In fact, it has been great for building the industry that we now have. However, in recent times, Labor have continued to cut spending on agriculture, cutting R&D, biosecurity and other programs, giving Australian investors less confidence than they once had to invest in their own industry. In this environment, there has been a marked change in activity by foreign companies—from investment in agriculture to ownership and control of supply lines. Look at Viterra and Cargill in the grain industry, Swift in the meat industry and National Foods in the dairy industry. There has been Singaporean investment in the timber industry. There is the proposed takeover of the rice industry in the member for Riverina’s electorate, in which it basically rests.

Many farming industries—for example, dairy, with the buyout of cooperatives—have found out that the short-term financial gain to individual members is outweighed by long-term impacts such as reduced farm-gate prices through loss of market power and/or loss of competition. While the decision comes down to individual companies and their investors or grower shareholders, farmers should recognise that, once they lose majority control, the focus of these operations will shift to the interests of the overseas shareholders.

With these factors as outlined, it is evident that we need to look at our food security in a way we have not done before. The current rules for foreign investment are outdated and do not address the issue of food security. The $231 million trigger for a review by the Foreign Investment Review Board for agricultural investments is almost never triggered because, obviously, there are almost no farms in Australia that make that much. If we do not put in place sensible safeguards, it will be difficult for governments to manage foreign ownership to ensure that our food security interests are looked after in the future. Even when it comes to agribusiness, the $231 million trigger is, most often, not activated.

That is why the coalition has tabled a notice of motion outlining a comprehensive policy approach to the issue. The notice of motion will task the Australian Bureau of Statistics and the Australian Bureau of Resource Economics to gather and clarify information on foreign investment in agribusiness and agricultural land and then task the Productivity Commission with a review to recommend safeguards for national food security interests by evaluating not only individual investment but also the cumulative impact of foreign ownership—in other words, what do you put together to create a trigger mechanism of $231 million or whatever might be appropriate? A parliamentary committee could then consider the recommendations.

The government has been asleep at the wheel on this issue. Now the Gillard government has released plans for yet another review of foreign ownership. But what the government—and, I believe, the minister—is not looking at is the agribusiness side of this. Agricultural land is the land that pulls at the heartstrings of Australians. Australians do not want to see the farm being sold off. In actual fact, agribusiness is the much bigger issue at this time. You cannot take the farm overseas, or the water that it uses, but you can take the productivity overseas. We need better information on the levels of foreign ownership of agribusiness and agricultural land. We need a national test for food security on foreign investments examined by the Foreign Investment Review Board. We need to be aware that the level of investment examined by the review board nearly always allows agriculture to fall under the level. The board needs to be able to look at the cumulative impact, as I said earlier.

It does not really matter whether or not you are in agribusiness or in agriculture. Think about the reason agribusiness is so important in this issue. Picture yourself as a foreign investor from a land that is probably nowhere near as tough as Australia is about what agriculture cannot do—what a farmer cannot do. If you come from China, India or Brazil and you have money to spend, are you going to buy 1,000, 2,000 or 3,000 farms to ensure your supply line, having to deal with the myriad regulations that Australia puts on farmers—what you can clear, what you can do with water, what you can do with chemicals and all those things we do in a very exacting degree? Are you going to live with that and try to run those 1,000, 2,000 or 3,000 farms? Almost certainly you will not. You will go and buy the agribusiness, like SunRice in the case of the rice industry and like the abattoirs who do the killing for meat, or like the grain trader. You will go and buy the trader, the processor or the wholesaler, because you still have your supply lines and you do not have to run the farm.

Agribusiness is the real issue here. Yes, they can buy agriculture, and there is a limit to what we would want to see in foreign hands, but the much bigger issue here is the extent to which the businesses who actually process, who actually trade and who actually export are in foreign hands. As I said earlier, we have moved from foreign investment to the foreign takeover of Australian agribusiness. As time goes on this will become a bigger issue, because they do not only buy. Potentially, once a global company or a company with a national bent that wants to protect either its global supply lines or its national supply lines buys one of our companies with a history of selling around the world, it has bought not only the supply line but potentially the customers. If the company wants to switch the supply from an Australian farm to another farm somewhere around the world, it can do it. So it does not only affect what we own; it affects our ability to sell.