Barnaby Joyce has decided to support the sale of two northern territory cattle stations to Indonesian investors. According to the Australian this has led to claims of hypocrisy. My view is that it reflects a return to sanity.
First, foreign investment itself is not the ‘bad thing’ as it is sometimes portrayed in the popular press. Much of Australia’s growth since white settlement has been built on foreign investment. Without it we would all be much, much poorer.
Second, it is often claimed that foreign investment in farms undermines food security. This is clearly nonsense. Food travels across borders and Australia controls what crosses over these borders (most of the time!). So it is actually the foreigners trusting us not to act capriciously and seize their property that is the relevant risk. They can’t sneak the food overseas against our laws or needs.
Third, it is argued that preventing foreign investment in farms protects farmers. This one is laughable. if you are a farmer, the farm land is your biggest asset. You want as many potential buyers as possible for that asset when it comes time to sell out and retire. When I was at the ACCC, the biggest proponents of Coles and Woolworths being allowed to buy small independent grocery stores were the owners of small independent grocery stores. The opponents were Metcash and its associated lobbying groups who saw the sales as reducing Metcash’s ability to supply those stores.
So what drives the concerns. Unfortunately the concerns are regularly expressed against Asian interests investing in Australia. Despite large amounts of investment in Australia from the UK and North America, this hardly raises a murmur. So I suspect that a lot of the opposition is driven by irrational fears or racism.
In summary the new Minister for Agriculture’s decision is sanity. Hopefully we will see more of it in the future.