Western Australian grain growers are supportive of foreign investment into farmland, according to a survey conducted by the School of Agriculture and Resource Economics at the University of Western Australia.
The survey was conducted ahead of tightened rules for foreign investment across Australia announced today by Prime Minister Tony Abbott. The rules reduce the threshold for screening foreign investments into agricultural land to A$15 million from A$252 million. This threshold was reflected in the free trade agreement with China last year.
Speaking to local radio station ABC Rural, Dr Marit Kragt, who worked on the research, was surprised that there was not more criticism around foreign investment. Most of the farmers she spoke to were looking to sell their farms and were pleased about the potential for foreign investment to help a sale. “They also had the perception they may get a better price,” she told ABC Rural.
Foreign land ownership was also mooted as a good way to help first-time farmers get into the business by leasing land belonging to foreign owners, without the large upfront costs of buying land, she said.
“We even expected that there might have been some disadvantages in terms of environmental management; because it’s a corporate business, they’re not going to care too much about the natural resource management in the region, and even that was mentioned as something foreign investors did very well, managing their natural resources,” she added.
There were some concerns expressed about the potential impact on land prices of too many foreign investors, particularly for farmland owners who wanted to expand by buying more land, but these complaints were in the minority, according to Kragt.
“A lot of the farmers said, ‘it’s great having these corporate businesses [buying land] because they hire the local farmers, they hire local farm managers, they buy the inputs as much as they can from our local area and they actually generate jobs for our kids and people who want to get into farming without having to buy a farm on their own’,” she added.
Kragt and her colleagues will present the report at the Australian Agricultural and Resource Economics Society conference this week. The school will also produce two papers from the findings, although they now need to collect data surrounding land price moves, she added. “We have now looked at the opinions so now we need to collect data and see if any facts [about impact of foreign investment] are true or not,” she said.