China vetoed from becoming second biggest Australia farm owner

Australia is the second favorite destination for Chinese foreign investment after the US, the Australian government said.

By: AP | Canberra | Published:September 7, 2016 2:01 pm

China would have become the second largest foreign owner of Australian farmland after the United Kingdom if the government had not vetoed the sale to Chinese interests of a major cattle empire, a report showed on today.

The Australian government released the first ever audit of Australian farmland ownership in answer to public concerns that too much agricultural land was being sold off to foreign interests, particularly China.

The report found that foreigners owned 13.6 per cent of Australia’s 385 million hectares of farmland. The largest foreign buyer of farms was Britain, followed by the United States, Netherlands, Singapore then China.

But China would have been propelled to second place if the government had not prevented in May the sale of Australia’s largest private landholding, S. Kidman & Co. Ltd., to China-based Dakang Australia Holdings. The Australian family-owned company is a collection of 10 cattle ranches, a bull breeding stud and a feed lot covering 101,411 square kilometers in four states.

Treasurer Scott Morrison, who vetoed the Kidman sale, said on Wednesday Australians could be confident that the government would not allow farm sales to foreigners that were not in Australia’s interests.

The government had previously estimated the size of foreign farm holdings at 11.3 per cent in 2010 and 12.4 per cent in 2013.

Trade Minister Steven Ciobo said media debate over foreign investment in agriculture “unduly places a lot of attention and focus on China.”

“The fact is that China is just not at the level where a lot of Australians would think it is, based upon what they’re seeing portrayed in the media on a regular basis,” Ciobo told Australian Broadcasting Corp.

Mick Keogh, executive director of the Australian Farm Institute think tank, suspected China would rank higher among foreign owners if the agricultural assets were measured by value instead of area.

But even on the measure of area, he was surprised that China was not a larger investor.

“From all the discussions and all the noise, we would’ve thought that number was much higher,” he said.

Foreign ownership of farmland is an increasingly sensitive issue in Australia, where many fear that Chinese- owned farms could supply Australian-grow produce to Chinese parent companies at discount prices or refuse to sell to Australian buyers.

Australia is the second favorite destination for Chinese foreign investment after the US, the Australian government said.