FOREIGN countries are “secretly” buying up large chunks of NSW farmland by establishing shelf companies, trust funds, and extended settlements to avoid scrutiny.
More than 800,000ha of prime and fertile land, from Moree in the north to Deniliquin in the south, is foreign owned, with Korea’s Ho Myoung Farm company the largest stakeholder with 500,000ha.
According to the latest figures from PRDnationwide Research, Korea’s investment has almost doubled in the past six months, while Switzerland ranks third with 74,448ha of crop and livestock properties scattered throughout NSW.
In a special investigation, The Sunday Telegraph reveals that overseas ownership was likely to be much greater but
“complex business structures were hiding the true picture”.
“People are being very secretive, they are negotiating settlement over a year so no one finds out and agents are advised to keep a low profile,” said PRDnationwide research analyst Oded Reuveni-Etzioni.
He said big jumps in Korean and Qatari land holds reflected the protracted settlements that were taking place, but most farm purchases escaped scrutiny of the Foreign Investment Review Board (FIRB).
Under current legislation, only purchases of agricultural land over $244 million trigger a review and as most farms in NSW sell for between $500,000 to $10 million, few attract scrutiny.
FIRB chairman John Phillips, has told a government inquiry into the board that it reviews more purchases of one bedroom apartments in Sydney than any of the farms purchased in recent years.
Mr Phillips said companies had been able to acquire dozens of smaller farms without triggering a review and that the board would not notice if a foreign investor acquired 10 farms in a single year for $30 million each.
The Sunday Telegraph reveals that foreign government-controlled companies are eluding closer examination by:
Establishing Australian companies to skirt review.
Employing scouts to identify and secure prime agricultural land.
Using wealth funds funded by countries like China without the regulator’s knowledge.
The government report that found 99 per cent of Australian agricultural land was wholly owned by Australia was rushed and deeply flawed and therefore inaccurate.
Inquiry chairman Senator Bill Heffernan said: “You have to jump through more hurdles to buy a bedsit in Sydney than if you want to buy a farm under $240 million.”
Senator Heffernan criticised the recent ABARE report used by the federal government to quell fears of a foreign land grab as a pointless exercise. The report claimed 99 per cent of agriculture was wholly owned by Australia but the survey included farms with a turnover of just $5000.
“It’s ridiculous, they are talking about toy farms,” Senator Heffernan said. “Once upon a time you had to invade a country with an army to get sovereign land, now you just come in with a cheque book. Complex trusts and company structures are hiding the true extent of foreign ownership.”
US fund Westchester, which has a team of scouts based in Wagga Wagga, has quietly snapped up three properties around Gunnedah, including Bengalala, North Gunnible and just last month Yeovil, a $10 million farm.
Hassad Australian, a company wholly owned by the Arab state of Qatar, has acquired 730,000ha of farm land in Australia, including 25,245ha in NSW.
The sovereign state is on track to acquire a larger area than the entire Arab state with plans to spend over $350 million on acquisitions.
At present they own 7300sq km, two-thirds of the entire size of Qatar. Hassad’s Australian boss Tom McKeon said Qatar wished to secure 30-35 per cent of its food supply from Australia.
Mr McKeon said: “With FIRB we have clearly articulated to them that our current plan is a total investment of $400 million.”
A recently released UN report on food security said that by 2030, the world will require 50 per cent more food and 30 per cent more water.
Philip Jarvis runs a business out of Armidale finding agricultural investments for mostly European clients and has sold 15 farms worth $10-$20 million each in the past five years, none of which attracted review.Senator Nick Xenophon has called for the review level to be dropped to $5 million.
Bought by secret agents
STAY-PUT farmer Jamie Bowman said it is the “secrecy” of the foreign land buy-up that concerns him most.
A livestock and crop farmer from Harden, Bowman, 35, said in the past two years he had knocked back big cash offers from agents acting for “mystery” buyers. “When I quiz them about who is behind the bids, they just won’t say … it’s always very hush-hush. “But word gets around and we know it’s not just the American buyers, but also Qatar and I think just out of decency they should disclose who they are,” said the father-of-two.
“I don’t like the secrecy.
“We’ve been here six generations, so we’re not going anywhere. I’m not so worried about super funds investing, but when you’re talking food security, it’s a worry for the nation.”
Nearby farmer Mick Townsend, 65, was one of several to sell. He recently sold his 400ha grain farm to Hassad Food, which is owned by the Qatar sovereign wealth fund, via an agent.
“Their plan is for food security for the folk back home in Qatar,” he said.
“In the right proportions I see no harm in it.”