Something is seriously wrong when a foreign owner of a 48,700-hectare NSW farming aggregation can sell it off to another foreign entity while ignoring a superior local offer.
Yet that’s what appears to be happening, as detailed in last week’s report in The Land of the mooted $208 million sale of BFB by its US-based majority owner to Canadian pension fund PSP, in preference to a $270m bid from local farming consortium Agrinova.
The deal is yet to be approved by the Foreign Investment Review Board (FIRB), and one can only agree with Agrinova spokesman Richard Stott when he asks how this sale could be deemed to meet the board’s “national interest” criterion.
As NSW Senator John Williams argued, there is little “national interest” for Australia in a foreign investor buying-up a heap of fully developed farms in an area like the South West Slopes.
Far better, surely, that any such investment be directed to those parts of Australia like the Top End where serious development is still constrained by a lack of funds.
It was a very different story a century and more ago when most of NSW was still little more than fenced and (in higher-rainfall areas) ringbarked.
There was a real need then for foreign capital to develop and improve the land, sink bores, erect built infrastructure and breed up quality livestock to form future flocks and herds.
That’s when the likes of the Scottish Australian Company, Australian Estates and other UK-financed land companies held sway over huge tracts of NSW (and Queensland), developing country that would later be broken up into the family farms of a later era.
Now, however, we see that process operating in reverse, whereby fully-developed farms are bought up, individually, by an investor, only to then be offered for sale later as an aggregation well beyond the average local farmer’s financial resources.
We see the same thing happening with the Ceres Agricultural Company portfolio of northern NSW properties, which CBRE is marketing as a whole, with a price expectation approaching $200m.
If the FIRB was serious about protecting the “national interest”, it would seek to keep viable Australian farms owned and operated by Australian families, not just for the economy’s sake, but also for the social fabric of rural communities.
Perhaps these mega-sales of rural property should be adjudicated not only by the FIRB, but also the Australian Competition and Consumer Commission, as what we are seeing is genuine competition stifled by marketing practices.
Ideally, vendors (especially foreign ones) of large rural portfolios should be required to offer them for sale, not just “as a whole”, but also in component parts, to give locals a chance.
This doesn’t mean the portfolio’s properties should necessarily be separately marketed, but a sale by tender should allow bids to be lodged for individual properties, combinations of properties, or the whole shebang.
- Peter Austin
