Global Food Forum: Liberals in twist amid Kidman sale delay

Two senior government ministers and the opposition yesterday argued the case for greater foreign investment in the agriculture sector.

Josh Frydenberg speaks at the Global Food Forum in Melbourne yesterday. Picture: Stuart McEvoy

Two senior government ministers and the opposition yesterday argued the case for greater foreign investment in the agriculture sector after Scott Morrison backed away from a quick decision on the sale of the vast Kidman cattle empire to Chinese bidders.

At the Global Food Forum in Melbourne, Resources, Energy and Northern Australia Minister Josh Frydenberg and Trade and Investment Minister Steve Ciobo separately argued more foreign investment was needed for Australia to take advantage of the potential boom in demand for food products in Asia. Foreign capital was particularly critical to the development of the agricultural industry in northern Australia, they told the forum, supported by The Australian and Visy.

Their comments clashed with the move by the Treasurer to delay a decision on the $371 million sale of Australia’s largest landholder, S. Kidman & Co, to Chinese bidders pending an independent review that would take 90 days.

Mr Morrison ordered an independent review of the Kidman sale process, postponing a decis­ion until just after the expected July 2 election.

The move will frustrate Kidman, which has been keen to finalise the sale process that has been under way since last year.

The initial bid was rejected by Mr Morrison in November and Chinese interests have substantially amended their offer to make it more politically acceptable.

It also contrasts with the strong pitch for more foreign investment in local agriculture by oppos­ition trade spokeswoman Penny Wong at the conference yesterday. Senator Wong said that the government was sending mixed messages on its view of the merits of foreign investments, with its tighter reviews on foreign investment in rural land and comments by Deputy Prime Minister Barnaby Joyce.

She warned there was a danger of “knee jerk populism” in Australia’s attitude to foreign investment that was “potentially risky for the country”.

Senator Wong said a study by ANZ in 2012 had found there was a need for a trillion dollars worth of investment in Australian agriculture to double the value of agricultural exports over the next four decades.

She said Australia had an “enormous opportunity” to sell its food products to the growing middle classes of Asia that meant more Australian jobs and boosted our standard of living.

“I don't have an ideological view about who does it,” she said.

She said comments from the government about “selling off the farm” were “not consistent with the message that we are open for investment”. She said she agreed with comments by former federal trade minister Andrew Robb that foreign investors in land “can’t take the land overseas”.

“Foreign owned farms generate economic benefits for the wider community, as Australian owned farms do,” she said.

Mr Morrison yesterday moved to diffuse controversy of the possibility of Chinese investors buying the giant Kidman pastoral company by announcing a review of the takeover process.

Mr Frydenberg told the conference that northern Australia was “right on the doorstep of the booming middle-class in Asia”. But the region needed major investments in its infrastructure.

“If northern Australia is going to reach its full potential, it needs long-term commitments and investment, particularly foreign investment which has been so critical to the development of so many industries in this country,” Mr Frydenberg said.

He said the region needed investment in land, water, rail, infrastructure, road and rail.

Mr Frydenberg said the area made up 40 per cent of Australia’s landmass but it only had 69 dams with a capacity of 15,000 gigalitres compared with the 494 dams in the rest of the country with a total of 79,000 gigalitres.

Mr Ciobo said northern Australia needed investment and “capital partnerships” to help expand its infrastructure and reach its potential. He said the region was an “untapped resource that presents itself”.

“If we can drive investment, capital partnerships, provide a catalyst to the northern Australian infrastructure facility, to drive common user investment, roads, rail, ports, bulk water, electrifications, communications, we know we will unlock the potential for the north,” Mr Ciobo said.

He said the fact that there were about 1000 companies from Australia represented in China last week for Australia Week showed there was a wide range of companies looking to take advantage of the free-trade agreement with China. He said some companies in the trade delegation were looking for new distribution channels in China while others were actively seeking capital to expand their businesses in ­Australia.

Malcolm Turnbull also played up the benefits of foreign investment in the wake of the recent developments on the sale of the Kidman empire. “It’s very important that foreign investors, upon whom we depend for many of the jobs in Australia, see Australia as a safe place to invest in and a place where their applications will be considered carefully and methodically in accordance with the law,” the Prime Minister told ­Adelaide radio station 5AA.