Current trends in Australian agriculture
Written by: Duncan B. on 10 February 2024
Australian agriculture in 2024 sees the continuation of the trends we have regularly reported on in previous years. Foreign-owned companies continue to buy up big, with more Australian farms and agribusinesses entering foreign hands.
Canadian and US pension funds, particularly the Canadian fund PSP continue to make big purchases of agribusinesses and farmland for cropping, grazing, wine production, nuts and horticulture. Properties with water rights are especially sought after.
Other foreign buyers are active as well. For example, Australia’s largest fruit and vegetable wholesaler Costa Group will be taken over by a consortium comprising US equity firm Paine Schwartz and other partners in a $1.5 billion deal. French agribusiness giant Louis Dreyfus has bought Namoi Cotton Limited in a $104 million takeover.
Interestingly, according to the latest Foreign Investment Review Board figures, the amount of Australian farm land controlled by overseas interests has declined slightly, down from 53 million hectares, (14.1%), to 47.7 million hectares, (12.3%.)
Chinese investors control 2% of Australian farm land, (7.8 million hectares), although only 750,000 hectares of this is freehold land, the remainder being leasehold land.
There have been some recent purchases of Australian cotton, wine and wool properties by Chinese companies, apparently seeking security of supply of these commodities. There have also been a lot of sell-offs by Chinese investors. This is due to them seeking investments in Africa and South America. No doubt the hostile atmosphere towards China by the Liberal Government was also a factor in the sell-offs.
We are seeing the emergence of a comprador class in Australian agriculture, with Australian individuals and companies entering into partnerships with foreign buyers of Australian farms and agribusinesses. Mao Zedong defined compradors as “a class which directly serves the capitalists of the imperialist countries and is nurtured by them.” (Analysis of the Classes in Chinese Society)
Australian collaborators with overseas companies include Lawson Grain which is backed by the Canadian Alberta Investment Management Corporation. Recently Lawson has been making multimillion dollar purchases of cropping and grazing farms in various areas.
There are many others serving foreign masters. PSP also regularly seeks out Australian farm operators as partners in their conquest of Australian agriculture. They look for top-tier farm owner operators, preferably families already running successful businesses, but who lack the capital to expand their operations. The owners of these companies have become keen advocates for foreign investment in Australia.
All of this puts further pressure on the small and medium farmers who struggle to survive against floods, cyclones, droughts and ever-increasing costs of fuel fertiliser, electricity, insurance and all their other inputs.
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