The Senate Standing Committee on Rural and Regional Affairs and Transport last week tabled its Foreign Investment and the National Interest report.
The committee noted that the “typically diverse and small-scale” structure of domestic capital in the agricultural industry was the driving factor behind the take-up of large-scale foreign investment.
The committee acknowledged the “current concerns” regarding foreign investment in Australian agriculture, but went on to say, “Foreign investment has been, and will continue to be, a legitimate and important source of capital in Australian agriculture. However, this does not mean that greater efforts should not be made to improve access to capital from Australian sources.”
Superannuation funds and other domestic investors with “long-term horizons” were particularly singled out.
“The committee understands that agriculture is an industry which is subject to many short-term and medium-term uncertainties,” the report said, but long-term investment in agriculture would benefit “the industry and the nation”, and would provide “suitable returns to investors”.
The committee recommended that the government commission an “extensive and independent review” of the possible incentive and barriers for the long-term capital investment in major Australian agricultural developments by domestic investors.
Based upon the review, the government should “develop, publish and implement” policies to encourage domestic investors to invest in Australian agriculture, the committee said.
“The policies should specifically identify opportunities for Australian superannuation funds and other domestic investors with long-term horizons,” said the report. “Where appropriate, the policies should be coordinated with relevant state governments and agencies.”
