The Australian government has warned that a “xenophobic campaign” would rob farmers of opportunities presented by the increasing demand from Asian countries for secure food supplies.
Just 1 per cent of agricultural businesses by number, 11.3 per cent of farmland and 9 per cent of water entitlements have some foreign ownership, a report released yesterday says, according to The Australian Financial Review.
Assistant Treasurer Mark Arbib said foreign investment had significant benefits and that there were already rigorous controls.
However, the Coalition said the report relied on faulty data and the National Farmers’ Federation called for the threshold at which the Foreign Investment Review Board must examine foreign investment in agriculture to be slashed to about $23 million from $231 million.
The Australian Bureau of Agricultural and Resource Economics and Sciences’ report acknowledges growing public concerns but cautions against bowing to them.
“Concessions to concerns about sovereignty, distrust or fear of foreigners are likely to come at an economic cost to countries that restrict the inflow of foreign capital,” it said.
Trade Minister Craig Emerson echoed this, warning Australia could pay a high price for “Hansonite” opposition to foreign investment in agriculture.
“Pessimists and political opportunists see the desire for food security of major emerging countries as a threat. In truth, it is an unsurpassed opportunity for Australian farmers,” Dr Emerson said.
The growing demand for safe, high quality food is also an opportunity for New Zealand farmers and the wider economy.
Some see that threatened by foreign ownership of land and that is partly what is behind the opposition to the proposed acquisition of the Crafar farms by the Chinese company Penqxin.
But as Fran O’Sullivan says:
I don’t believe it is in New Zealand’s long-term economic interest to allow xenophobia, whipped up by a rival (late-comer) bid, to damage a relationship cemented by years of diplomacy by officials in this country and China.
There will be more to the OIO decision than mere political cosmetics. Penqxin will have made sure that its business plan includes processing milk powder from the Crafar farms within New Zealand and to export branded high-value products back to China. Thus it ought to pass the OIO’s muster.
That is also where the value proposition for New Zealand-sourced dairy production lies. Not simply in exporting vast quantities of milk powder to Fonterra’s customers and competitors offshore (including within China) for them to refine. This will lead to more jobs in New Zealand – not fewer.
Appealing to xenophobia in their increasingly vehement opposition to the Penqxin bid does the consortium led by Sir Michael Fay no credit.
The receivers are duty-bound to get the best return for the farms and it appears the New Zealand bid is well short of the Chinese one.
If it wasn’t for the relatively new markets for our primary produce in Asia, particularly in China, New Zealand’s economic position would be in a very dire position.
It is in our mutual interest to further trade and other relationships.
Providing safe-guards are in place to ensure farms aren’t mined and produce meets the high standards on which our reputation is based we have more to gain than lose from foreign investment.