[Peakoil] Australia should look to its food security, before all the farm is sold

[Alex Pollard]

http://www.smh.com.au/opinion/society-and-culture/australia-should-look-to-its-food-security-before-all-the-farm-is-sold-20101013-16jyw.html
 
 Australia should look to its food security, before all the farm
is sold
 Paul Myers
 October 14, 2010
 
 Australia is
rapidly losing control of its food resources. The purchase  of AWB - the
former Australian Wheat Board - by the Canadian company  Agrium, now
approved by the Foreign Investment Review Board, is the tip  of an iceberg
where large segments of food processing and marketing have  been sold
offshore.
 
 Production is now the last bastion of predominantly
local ownership in  the food chain. But with increasing interest by
foreign companies - and  governments, including China's - quality farmland
is also a target.
 
 In short, Australians are in danger of
becoming servants, not masters, of their own food resources.
 

This is not an alarmist view. In a US report last year titled The Great 
Land Grab, the Oakland Institute said oil-rich, arable-poor Middle East 
and wealthy Asian countries "are seeking to acquire land as part of a
 long-term strategy for food security". Purchases in South America,
the  subcontinent and Asia have begun.
 
 Australia and New
Zealand are high on China's list. In June, a Tasmanian  real estate agent
reported strong interest from China in northern  Tasmanian dairy farms.
Immediately afterwards, the Chinese  government-controlled Bright Food
Group bought New Zealand's  third-largest dairy processing company,
Synlait, which has 15  independently owned farms, after being beaten by a
Singaporean company  for CSR's Sucrogen sugar and energy business.


 When overlaid with other food resource acquisitions, such trends
should  ring alarm bells in a country that has lost control of most of its
food  marketing and processing. But overseas purchases of rural property
and  food-related companies for less than $231 million do not need Foreign
 Investment Review Board approval.
 
 Almost all rural land and
associated farm businesses can be bought by  anyone, anywhere, any time.
Unlike media, telecommunications, transport  and defence equipment, rural
land and food production - or food  marketing and processing for that
matter - are not part of a "prescribed  sensitive sector" for
foreign investment.
 
 Perhaps they should be. In a world
becoming increasingly concerned about  food security, Australia's
abundant, highly productive farmland is ripe  for the picking.
 
 Already, interests as powerful as the Sultan of Brunei, the Swire
family  of England (a major shareholder of Cathay Pacific) and Count Carl 
Gustav Wachmeister of Sweden own significant rural properties here, as  do
many other companies and individuals.
 Even if such purchases remain
isolated, there is always the prospect of  foreign companies with major
stakes in Australia's food marketing and  processing buying farmland.
 
 There are precedents. Gordon Edgell, who started growing
asparagus near  Cowra in the 1920s, developed an iconic food production
and processing  company that is now owned by the US giant JR Simplot.
 Australia's biggest meat processor, Australia Meat Holdings, with 10 
abattoirs and five cattle feedlots, is owned by the Brazilian company 
JBS, the world's largest meat processor.
 
 Two of the other top
three meat processors, Cargill Beef ( in the US)  and Nippon Meat Packers
(in Japan) are beef producers. Nippon operates  the largest cattle feedlot
in Australianear Texas, Queensland, and a  grass-fed operation on King
Island; Cargill owns the Jindalee feedlot  near Wagga Wagga. All its grain
comes from Cargill's oilseeds and grain  supply business, and the company
owns 40 per cent of Allied Mills,  Australia's largest flour producer.
 
 The largest shareholder in the nation's biggest cattle producer,
the  Australian Agricultural Company, is the Dubai food group IFFCO. 
Consolidated Pastoral Company, formerly owned by the Packer family, has 
16 cattle stations in northern Australia, and is now controlled by the 
British investment group Terra Firma.
 
 Three of the four
biggest dairy processors - National Foods, Fonterra  and Parmalat - are
owned by Japanese, New Zealand and Italian companies  respectively,
leaving Murray Goulburn Co-operative as Australia's  remaining
representative in dairying's big league.
 
 The tuna industry
has taken a similar route. Safcol, which began in 1945  as the South
Australian Fishermen's Co-operative Limited, is owned by  the Tropical
group of companies inMalaysia. Greenseas was bought by  Kraft Foods in
1961 and subsequently by HJ Heinz in 1974.
 Approval of the AWB
purchase is yet another loss of local control in the  food chain. It
follows last year's sale of ABB Grain, the former  Australian Barley
Board, to another Canadian company, Viterra.
 
 In a little over
a decade since they were both privatised, these two  once-dominant grain
traders have gone offshore. AWB bought the rural  services company
Landmark from Wesfarmers in 2003, meaning that one of  the remaining big
two pastoral houses (the other is Elders) is now  foreign-owned.
 
 Apart from a lot of top farmland, there isn't much left.
 

Paul Myers is a former editor of The Land and was founding editor and
publisher of OUTBACK magazine.
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