Foreign investment in Australian agriculture


With growing public debate over the increased foreign ownership of farm land, this paper concludes that the overall impact on the economy has been positive.

Introduction: Global investment in agriculture has attracted attention from politicians, analysts, security experts and think-tanks. There is a growing public debate over the potential implications for food security through increased foreign ownership of farm land. The propensity of foreign investors—particularly sovereign wealth funds (SWFs)—to accrue productive agricultural assets has increased. Australia, as an open and medium-sized economy with a robust policy environment and strong agricultural sector, has attracted increased foreign investment flows. This paper provides context for these debates. It concludes that the overall impact on the economy has been positive, notwithstanding the ongoing public concerns in this area.

Part 1 of the paper sets out the extent of foreign investment in the agricultural sector and places it in the context of foreign investment in the wider economy. In particular, this part shows the major source countries for investment as well as the developing trends.

Part 2 outlines the regulatory framework by which Australia governs FDI. Interestingly, and perhaps contrary to general public perceptions, the analysis suggests that Australia has one of the more restrictive regulatory regimes among our OECD counterparts.

Part 3 then examines the various aspects of the public debate in Australia over FDI in the agricultural sector: both the arguments for the economic benefits of FDI to Australia, as well as the basis for the underlying public unease over foreign ownership of Australian farms.

In Part 4, the analysis concludes with a review of the principal policy options being discussed, including refining the national interest test, altering the review threshold, and improving the information available to the public.

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