Canada, USA, top the list for foreign investment in agriculture

Canada and the USA take out the top spots as China drops back dramatically on foreign investment in Australian agriculture.

Significant deal: Wyadra in southern NSW was sold to Boston-based investors in 2018-19. The US, along with Canada, are the biggest investors from overseas in Australian agricultural land.

NORTH America is leading the run on foreign investment in Australian agriculture – while China dropped out of the top five altogether.

New data from the Foreign Investment Review Board’s 2018-19 annual report shows Canada topped the list for the second year in a row with investments worth $1.6 billion – down a massive $1 billion from the previous year.

That was countered by a huge uptake in US investment at $1.2 billion; up from the $776.3 million recorded the year before.

But the biggest drop came from China, with investments valued at just $251.9 million – down from the $1.6 billion invested in 2017-18.

Overall, the value of approvals in agriculture dropped by $600 million, from $7.9 billion to $7.3 billion – the biggest decline experienced in any sector for the year.

Graphic for The Weekly Times online.

The Weekly Times reported last month that the Federal Government had not released FIRB’s annual report or its register of foreign-owned agricultural land since 2017-18, meaning the Government and industry were relying on years-old data to gauge the level of investment in agriculture.

FIRB released the 2018-19 annual report on Friday, revealing the US topped the list of proposed investment across all sectors at $58.2 billion, followed by Canada, Singapore, Japan and China.

In agriculture, Hong Kong came in third a long way behind Canada and the US, with investments worth $684.1 million; followed by Norway at $400 million and Singapore at $257.5 million.

China dropped to sixth position, reflecting an ongoing trend, according to FIRB.

“Since 2015-16, Chinese proposed investment into Australia has shown a downward trend due to a range of factors including China’s domestic policy settings that have increased scrutiny over outbound (investment) as well as stricter capital control,” the report stated.

The FIRB has still not released the latest foreign-owned agricultural land register. The 2017-18 report found that 52.6 million hectares of land was owned by foreign interests, with the UK the biggest owner with 10.2 million hectares followed by China (9.2 million hectares), the US (2.7 million hectares), the Netherlands (2.5 million hectares), the Bahamas (2.2 million hectares) and Canada (2 million hectares).

The timing of the annual report’s release – 10 months after the end of the financial year – has called into question the accuracy of the investment by certain countries.

In the past 10 months alone, Canada Public Sector Pension Board – which manages the superannuation funds of – has been involved in more than $2 billion worth of property and water purchases including two of the biggest transactions in Australian agriculture history.

In February it finalised its $854 million takeover of the ASX-listed Webster Limited – Australia’s fourth-oldest company and one of the nation’s biggest landholders with more than 340,000ha and 153,000 megalitres of water. Late last year it paid about $850 million for 12,000ha of almond plantations near Robinvale in northern Victoria and almost 90,000 megalitres of high-security water.

Both sales came just months after PSP teamed up with Australian Food and Fibre to purchase cotton giant Auscott’s Midkin vertically integrated aggregation near Moree in northern NSW for an estimated $300 million. In February this year, its Daybreak Cropping business paid a whopping $97 million for the 22,000ha Erregulla Plains property at Mingenew in Western Australia.

Other significant farmland and water deals to offshore interests announced since the 2018-19 figures were collated include:

— $120 million paid by Boston-based Hancock Agricultural Investment Group for the 19,877-hectare Wyadra and Cowl Cowl properties in southern NSW, from Harvard University’s endowment fund.

– $70 million paid by the South Africa-backed Langenhoven family of RALLEN Australia for the 559,370ha Tanumbirini and Forest Hill stations near Katherine in the Northern Territory.

– More than $60 million paid by the North Australian Pastoral Company for Mantuan Downs Station near Springsure in Queensland. NAPCO includes a smaller percentage of foreign funds.

– $30 million paid for the 3618ha Gilgal property near Cootamundra in NSW to the New Zealand-backed Palgrove beef operation.

– About $30 million paid for the 4200ha Bundarbo Station near Jugiong in NSW by BridgeLane Group investment boss Markus Kahlbetzer of Argentina.

– $28.4 million paid by the New York-based Teachers Insurance and Annuity Association of America-College Retirement Equities Fund for 4000ha of dryland cropping country near Moree in NSW.

– $25 million paid for the 2349ha Mawallock property near Ballarat in Victorian to major China wool buyer Tianyu Wool.

– $6.8 million paid by the Buratovich family from Argentina for the 67,840ha Sturt Downs property near Katherine in the Northern Territory. It complements the family’s $23 million purchase of nearby Manbullo Station earlier last year.

Properties that were owned by overseas interests but sold back to Australians in the past 10 months include the Wollogorang and Wentworth stations, covering 705,000ha, in the Northern Territory. They were purchased by McMillan Pastoral Company for $53 million.

In divesting its portfolio of Australian assets, China’s Rifa Salutary sold the 4390ha Kulwin Park at Wycheproof sold to offshore interests for almost $10 million and the 2405ha Blackwood Station near Penshurst to barrister-to-the-stars Allan Myers for about $30 million.

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