Buying blitz as Tasmania’s foreign-owned farms revealed

These are the top five countries buying up Australian farms, as those owned by foreign entities in Tasmania are revealed.

Canada, the US, the Netherlands and the Bahamas are turning up the heat on Australian rural property prices as part of a multibillion-dollar buying blitz of our farms.

An investigation has found the five biggest investors in Australian agriculture – with combined land and water assets valued at almost $12 billion – are all backed directly or indirectly by foreign capital.

Leading the buying charge is PSP Investments – the pension fund for the famed Royal Canadian Mounted Police – which has spent $4.5 billion on Australian agriculture assets in recent years.

This includes more than $500 million on one of the nation’s biggest cotton growing and production businesses, the NSW-based Auscott Limited, last month.

Other major investors include Macquarie Group’s three agriculture-specific funds – whose backers include Dutch pension fund Stichting Pensioenfonds ABP – which own more than $3 billion of land and water assets, US teacher superannuation fund TIAA-CREF ($1.8 billion-plus in investments), the ASX-listed Rural Funds Group ($1.1 billion) and US-based Hancock Agricultural Investment Group ($1 billion-plus).

Members of the Royal Canadian Mounted Police (RCMP) Emergency Response Team. The pension fund for the RCMP has spent $4.5bn on Australian agriculture assets in recent years. Picture: Angus Mordant

According to latest Federal Government data, about 53 million hectares of farmland was owned or partly owned by foreigners in 2019-20 – an increase of 900,000 hectares on the previous year – accounting for 13.8 per cent of Australia’s farming area.

Canada-based PSP agriculture boss Mark Drouin said Australia was considered attractive to offshore buyers due to its prevailing rule of law, open approach to foreign investment and offering of scale for a wide range of agriculture pursuits – adding that strong demand was unlikely to wane anytime soon.

“Australia has been pretty pivotal (for us) since the beginning,” Mr Drouin said. “We are very much long-term investors. In the next 10 years or so … we’ve got to double again our deployment. If you think of the past two or three years we’ve invested somewhere between A$2.14 billion and A$3.22 billion on average a year – a large part of that has been in Australia – and I don’t see that slowing down anytime soon.”

Rushy Lagoon, Red Hills and East Wyambie, owned by Alan Pye (New Zealand). Picture: Supplied

CBRE Agribusiness managing director David Goodfellow said another reason foreigners were attracted to Australia was its relatively affordable farmland compared to most of the rest of the world.

A recent Rural Bank report found the average price of Australian farmland last year was $5907 a hectare. This compares to A$10,125 a hectare in the US, $38,825 a hectare in Wales and $48,880 a hectare in southwest England.

According to the Federal Government data, China the biggest offshore holder of Australian farmland in 2019-20 with 9.2 million hectares – 8.4 million hectares of which was leased – followed by the UK (7.3 million hectares), the Netherlands (2.8 million hectares), the US (2.75 million hectares), Canada (2.61 million hectares) and the Bahamas (2.2 million hectares).

But Mr Goodfellow said after a wave of investment that started in about 2013, thanks to grants and subsidised loans from its government, China was now reducing its investments in Australia as it turned its attention to farmland in Brazil and Argentina.

Agriculture Minister David Littleproud said the government welcomed foreign investment as long as it was in the “national interest”. Picture: NCA NewsWire / Gary Ramage

Chinese-owned Van Dairy Group this week sold 11 of its dairy farms in northwest Tasmania for $62.5 million and billionaire Gina Rinehart is also understood to be selling several cattle stations in Northern Australia to raise capital to buy out her Chinese partner in the famed S Kidman and Co pastoral business, which they bought in 2016.

“Investment goes in waves – there’s been countless examples of this over the years,” he said.

Agriculture Minister David Littleproud said the government welcomed foreign investment as long as it was in the “national interest” and offshore companies paid “their fair share of tax”.

“We (need to) understand who is coming in, what the concentration limits are, particularly with industries and geographical areas,” Mr Littleproud said.

In 2015, the government famously knocked back a $350 million Chinese-only bid for S Kidman and Co on national interest grounds. Since that time, the likes of PSP have spent billions on farmland and water assets. Despite this, Mr Littleproud said the government was consistent on who it let buy Australian farmland, adding that issues such national security and food security needed to be taken into consideration.

“You’ve only got to look when Covid started, people were fighting over the last morsel of meat or the last toilet roll in Woollies,” he said. “The insanity of that goes to show that, as human beings, food security is at the fore of our thinking.”

BIG TASMANIAN FARMS OWNED FULLY OR PARTIALLY BY FOREIGN INTERESTS

CAPE GRIM

- VDL Farms – 17,800 hectares. Moonlake Investments (China)

CAPE PORTLAND

- Rushy Lagoon, Red Hills and East Wyambie – 22,000 hectares. Alan Pye (New Zealand)

CONARA

- Vaucluse – 2,654 hectares. Proterra Investment Partners (United States)

HILLWOOD

- Millers Orchard – 30 hectares. Australia Aulong Auniu Wang Group (China)

SIDMOUTH

- Calthorpe Orchard – 94 hectares. Australia Aulong Auniu Wang Group (China)

SMITHTON

- Dairy aggregation. Laguna Bay Pastoral Company (United States)

SWANSEA

- Swansea walnut orchard. PSP Investments (Canada)

TASMANIA

- Tasmania aggregation – 9013 hectares. Ingleby Farms (Sweden)