Chinese land grab tests farming dynasties

MICHAEL Clift is a sixth-generation Liverpool Plains farmer, his family having worked the rich black soil of the NSW region for 175 years.

110628 Michael Clift

MICHAEL Clift is a sixth-generation Liverpool Plains farmer, his family having worked the rich black soil of the NSW region for 175 years.

But the likelihood of the 41-year-old father of three passing the property into the hands of a seventh generation is rapidly diminishing as Chinese-controlled mining giant Shenhua Watermark Coal continues its sweeping purchase of the coal-laden farms that make up the area, 500km northwest of Sydney.

Mr Clift, who runs a 2000ha grain farm in Breeza, a small Liverpool Plains town on the outskirts of Gunnedah, is one of the few farmers to have resisted the temptation to sell to Shenhua, which, The Australian revealed yesterday, has so far bought 43 properties in the area over the past two years.

For the moment, Mr Clift has no intention of selling, but he reluctantly admits he may soon be left with no choice.

"If there's a massive big coalmine right at my back door, my family can't live like that," he said.

The buy-up of prime agricultural land by Chinese state interests sparked a furious political debate yesterday, with Coalition figures, including Liberal senator Bill Heffernan and independents such as Nick Xenophon, railing against the development.

A former member of the Foreign Investment Review Board, Chris Miles, backed a rethink of the trigger points for reviewing offshore purchases of land, and raised concerns about the increase in Australian assets being controlled by state-owned foreign companies.

Mr Clift does not begrudge those who have sold up and moved out. All but one of the neighbouring properties are now owned by Shenhua. But he's "disgusted" at how the federal government's failure to regulate such a large-scale foreign takeover of valuable farming land has effectively killed a local community, turning it from a farming region to a mining hub almost overnight.

"A community has been torn apart - everyone's gone," he said.

"I've got nothing against the farmers who have sold because they have been offered huge money. It's the government's fault. Overseas companies shouldn't be able to come over here and buy Australian land. If they do need the land, it should be leased so ownership always stays in Australian hands."

Mr Clift said the widespread purchase of properties in the Liverpool Plains set a dangerous precedent for other agricultural regions across Australia.

"This is some of the best agricultural land in Australia," he said, referring to the richness of the soil in the Liverpool Plains, the area's water-holding capacity and its underground aquifers.

"If we're going to protect some agricultural land, you'd think we'd favour this ahead of more marginal areas. If we need to look forward to our future generations having clean water and good food, this is one of the areas that should be protected."

Mr Clift believes coalmining will make more money for the region in the short-term, but beyond that better returns lie with the agriculture industry.

"Ultimately, coalmining is a rape and pillage industry," he said. "Agriculture is sustainable, whereas coalmining is not."

Either way, though, the Australian economy would suffer, according to Mr Clift.

"If the mine doesn't get up, then the foreign companies will still have the food security of the region," he said. "How silly is Australia - letting go of some of our best food-growing areas and selling it overseas?

"And Australia is certainly not going to benefit from a Chinese company coming and mining our coal and shipping it straight back. We might get a few royalties out of it, but in the long-term - well, it's just stupid."

Property owners who sold their land signed a confidentiality agreement forbidding them from talking about the sales. But one seller, who asked to remain anonymous, said she had no option. "We didn't want to sell but they bought all round us and we had no choice," she said. "You can't live on an open coalmine."

She said the miners made good offers for the properties, which "put a wedge into the community, and everybody went down like ninepins". She declined to discuss the amount of the offer made to her or how much it exceeded the market value of her property.

"Generally they've got you tied down pretty well," she said.

The seller was concerned about the damage to the local economy the mine would do, with people leaving the district as a result.

"I think the problems are going to outweigh the boom," she said.

The NSW government has come in for criticism from those opposed to the Chinese buy-up, with claims it fast-tracked its approval processes and ignored environmental concerns, including the water catchment issues.

The government sidestepped the claims, with a spokeswoman for NSW Resources Minister Chris Hartcher saying foreign investment was a matter for the federal government. Shenhua Watermark Coal's total spending of $213 million on the properties came under the FIRB's $231m threshold for review.

But it would still have been obliged to apply for approval for the purchases because the board vets all investments, regardless of their value, by foreign governments or the companies they control.

The controversy over offshore purchases of prime farmland flared during last year's election campaign, when the opposition declared it wanted to monitor foreign ownership of farmland and would take action if the scale of investment threatened the national interest.

The government has commissioned its own audit of the extent of foreign control over the sector and its impact on farmers and country areas. A spokesman for Assistant Treasurer Bill Shorten said the government was aware of community concerns about foreign investment in the agricultural sector. "Once we have all the facts on the table, we can consider in detail further policy responses," the spokesman said.

Independent Tony Windsor, whose seat of New England takes in Gunnedah, could not be reached for comment last night.

Senator Heffernan, who has attacked foreign government ownership of Australian land and water, said the national interest test was not being properly applied when it came the country's most precious resources.

Mr Miles, who sat on the FIRB for a decade to June 2009, said that although foreign capital flows were important to Australia, he was worried about the concentration of investments held by companies controlled by foreign governments.

"Certainly in my last two or three years on foreign investment, there was a greater concentration of investment in Australia by companies controlled by foreign governments, rather than foreign entities, and that is always a concern," he said.

"Virtually every company that does invest in Australia out of China really is controlled by the Communist Party."

Additional reporting: Andrew Priestley