Foreign ownership of Australian farmland dips slightly over 3-year period

Foreign Investment Review Board figures show the UK is the largest overseas holder of Australian farmland, followed by China.

Foreign ownership of Australian farmland rose by more than two million hectares in 2017-18, but declined as a percentage of total farmland, according to figures published by the Foreign Investment Review Board.

FIRB’s Register of Foreign Ownership of Agricultural Land, which compiles reports of registrations as at June 30, 2018, found that 52.602 million hectares of Australian farmland are in foreign hands, up from 50.515 million.

Despite the increase in absolute terms, however, this was a fall from 13.6 percent of agricultural land in foreign hands in 2016-17 to 13.4 percent last year.

The UK remains the largest overseas holder of Australian farmland at 2.6 percent of Australia’s 393.797 million hectares of farmland, with China second on 2.3 percent and the US third on 0.7 percent.

Part of the UK’s figures are made up by Terra Firma’s ownership of Consolidated Pastoral Company, which it is currently in the process of breaking up and selling. The bulk comes from British billionaire Joe Lewis’s minority stake in Australian Agricultural Co.

The report also found that more than 80 percent of foreign-held farmland is used for livestock purposes, although there has been an increase in foreign-held farmland being used for cropping and horticulture.

Land used for horticulture rose by 3.4 percent year-on-year after a sharp rise of 55.8 percent in 2016-17, while land used for crops rose by 2.2 percent, also following a sharp rise of 10.8 percent the previous year. The amount of land for livestock also grew, returning to 2015-16 usage levels after a fall in 2016-17.

Western Australia and the Northern Territory saw the largest increases in foreign ownership, both seeing foreign-held farmland rise by 6.9 percent. Queensland saw the lowest increase at 0.06 percent.

FIRB’s figures show foreign ownership of Australian farmland has held reasonably steady over the past three years. Some market sources have speculated that changes to FIRB’s threshold and alterations to the MIT preferential tax rate could potentially deter some foreign investors, but there is no sign of a significant shift in either direction.

However, one fund manager, who wished to remain anonymous, told Agri Investor in late 2018 that a major US LP had declined to invest in one of its funds due to the MIT tax changes and general uncertainty over investing in Australia.