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the need for foreign investment in Australian agriculture

This article was published on the Future Directions International website on Monday 8th September 2014.  It was written by Jack Di Nunzio, FDI Research Analyst, Global Food and Water Crises Research Programme


Unlocking our potential - the need for foreign investment in Australian agriculture


Key Points

Available statistics and recent reports suggest Australian agriculture is experiencing an increase in foreign investment.

Foreign investors, in particular State-owned enterprises (SOEs), are looking to Australia for long-term, low risk agricultural assets and as a channel to supply their growing populations with high quality produce.   

Such investment is essential for Australian agriculture in the absence of domestic capital sources and government support.

Foreign capital brings improved access to overseas markets, needed to meet export growth targets, and can build Australia’s food processing capabilities to ensure domestic food security.

Government policy should focus on balancing the sector’s need for substantial foreign investment while improving the transparency of foreign involvement in key industries.



Foreign investment has reemerged as a prominent issue in Australian agriculture. In line with rising global investment trends, SOEs and foreign multinationals have shown greater interest in Australian agricultural assets. This has led to calls for improved transparency and possible restriction of foreign capital. The greater agricultural community and economists alike, however, champion this influx as an essential tool for the sector’s development in the absence of domestic capital.

Foreign investment - in its many forms -will shape the future sustainability of the sector, which is dealing with issues of high debt and high labour costs. Australian agriculture requires long-term strategies to address these issues, while contending with current sector challenges of high labour rates and under-developed processing facilities. By providing long-term, well-funded and environmentally sustainable investments, foreign agribusinesses and SOEs can be hugely beneficial to the sector.

The presence and operation of such agribusinesses must be monitored, however, in consideration of maintaining domestic food security. The role of Australia’s Foreign Investment Review Board (FIRB) in this cannot be understated; it plays a significant role in ensuring investments are made according to the national interest. Clear government policy measures must be taken to alleviate public concerns of foreign investment, while delivering more avenues for the production of healthy, ready-to-consume food products for Australians.

- See more at: http://www.futuredirections.org.au/publications/food-and-water-crises/1926-unlocking-our-potential-the-need-for-foreign-investment-in-australian-agriculture.html#_ftn3