Joyce urges superfunds to invest in Australian agri

Agricultural exports are forecast to reach a record A$45 billion next year in an industry that has increasingly attracted investment from abroad.

Australia’s agriculture minister Barnaby Joyce has called on his country’s A$1.8 trillion ($1.3 trillion; €1.2 trillion) pension fund industry to increase investment into Australian agriculture as foreign investors’ interest grows.

“I truly believe the Australian people want more than 0.3 of 1 per cent of their superannuation invested in agricultural assets,” he told reporters at an Australian Bureau of Agricultural and Resource Economics conference today.

“We have to make sure that we create a culture where investment in the agriculture portfolio is just as logical as investment in the iron ore portfolio or coal portfolio.”

Agricultural exports are forecast to reach a record A$45 billion next year, while the gross value of farm production is expected to hit A$60.3 billion. However, the country’s pension industry has been criticised in the past for its lack of interest in agriculture.

Meanwhile, funds abroad have been increasing investment into Australian agriculture.

Canada’s Ontario Teachers’ Pension Plan Board and Public Sector Pension Investment Board both bought agricultural assets in Australia last year. The Alaska State Retirement System, the Alberta Investment Management Company, the Second Swedish National Pension Fund (AP2), German pension fund Ärzteversorgung Westfalen-Lippe (ÄVWL) and TIAA-CREF all invested in Australian farmland or forestry at least four years ago, according to international non-profit Grain.

Towers Watson senior investment consultant Karen Dolenic told Agri Investor: “US institutional investors are showing a real interest in Australia, because of the difference in pricing. It’s been happening since around 2010.”

“Australia tends to be on the list of target geographies for large institutional investors because there aren’t a lot of places that tick so many boxes in terms of scale, export orientation, not being reliant on subsidies, low risk of disease and diversity of commodities and production environments.”

Joyce told Agri Investor in an interview two years ago: “My interest is to achieve a better return at the farm gate to ensure a sustainable and competitive Australian agriculture sector. Ultimately, if this objective is attained then investment in Australian agriculture will follow from a range of sources, including from superannuation funds.”