Agriculture should be excluded from coronavirus-forced foreign investment rules

Farmers are calling for agriculture to be excluded from the Federal Government’s changes to foreign investment rules in the wake of the coronavirus crisis.

Best of intentions: A Federal Government attempt to ward off predatory offshore takeovers during the coronavirus pandemic has the potential to adversely affect agriculture. Picture: Greg Wood/AFP

AGRICULTURE should be excluded from the Federal Government’s changes to foreign investment rules in the wake of the coronavirus crisis, farmers say.

Treasurer Josh Frydenberg last month announced all investment plans by overseas companies or businesses would require Foreign Investment Review Board approval during the pandemic “regardless of value or the nature of the foreign investor”.

It also extended FIRB’s time frames for reviewing applications from 30 days to up to six months. Under former rules, only takeovers worth $1.2 billion or more and farmland worth $15 million or more required FIRB approval.

At the time the Government said the changes were made in an attempt to ward off predatory offshore takeovers of financially stressed businesses.

But CBRE Agribusiness regional director Danny Thomas said the changes would put the FIRB “under an enormous amount of strain” that could see the time frame of rural property transactions to overseas investors blow out considerably.

“That is not a good thing for agriculture, that is not a good thing for how we are perceived in the world economy,” Mr Thomas said. “What are we protecting? Wrapping agriculture up (with these rules) seems to be a gross over-reaction.”

Mr Thomas said investors made decisions based on current economic settings and could be wary of any deal that would require third-party approval that could take up to six months. Under former rules only farmland sales worth more than $15 million required FIRB approval.

“The money still does want to come in but the old adage holds true – time kills deals,” he said. “Six months is a long time, and we’ve seen how quickly things can change with the whole coronavirus issue.”

Victorian Farmers Federation president David Jochinke said a more workable solution was required “if more people are going to get caught in this net”. “Agriculture should be excluded,” Mr Jochinke said. “Australia at the moment doesn’t have enough investment in agriculture … we need to have investment from somewhere. A conversation on the right amount of foreign investment needs to be had alongside government policies that also encourage domestic investment in agriculture.”

The Government last month said it would “prioritise urgent applications for investments that protect and support Australian business and Australian jobs”. It said the temporary measures “will remain in place for the duration of the current crisis”.

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