On a recent trip to Australia, Allan Barber read an article about overseas land holdings on that side of the Tasman which illustrates the dramatic growth in Chinese investment in Australian agricultural land. In contrast to the rather sketchy and out of date statistics available in New Zealand, the Foreign Ownership of Agricultural Land Register provides very specific figures at 30 June this year, he writes.
Foreign investors now own 13.6 percent of Australian agricultural land, up from 11 percent three years ago, with British investment at 33 percent still the largest source of foreign capital, although this percentage has fallen sharply from 52 percent 12 months earlier. The figures show Chinese entities now own, either partially or outright, close to four percent of the total farming area or 29 percent of foreign held land, having increased their holdings from 1.4 million hectares to 14.4 million in the twelve month period. This change has largely occurred through sales by British to Chinese ownership rather than a substantial increase in the actual amount of land owned by foreign investors.
Other major foreign owners include investors from the Netherlands, Canada, Switzerland and Singapore who increased their purchases and the United States which was the only large investor group to appear to be losing enthusiasm for Australian farming land. Tasmania is the state with the largest proportion of foreign ownership at 24 percent, following the purchase of Van Diemen’s Land dairy farms for A$280 million in 2016 by Chinese billionaire owned Moon Lake Investments. A Scandinavian/British enterprise, Ingleby Farms, has also invested in dairy farms in Tasmania. Northern Territory and Western Australia also have substantial levels of foreign investment in agricultural land, with Chinese interests buying up cattle stations in the Kimberley.
The general attitude to foreign agricultural investment in Australia seems to be less paranoid than in New Zealand, although the Federal Government tightened the rules for approval and introduced a foreign land register in 2015. However, New Zealand’s existing Overseas Investment Office approval requirements impose a similar level of scrutiny with major transactions being referred to the relevant minister.
This could all change after our election result and the composition of the next government which will involve New Zealand First and its determination to prevent the sale of agricultural land to overseas investors. A Labour/Greens/NZ First coalition will definitely impose tight restrictions on overseas ownership.
Statistics for overseas land ownership in New Zealand are much harder to track, although in 2011 the total was stated to be 8.7 percent or 1.3 million hectares. However, estimates vary widely up to as much as 20 percent, although sales of forestry land far outweigh agricultural and horticultural land sales. What is certain is overseas investment in our agricultural sector is about to become a lot more difficult.