Healthy foreign relations important for the farm sector

I HAVE written before about sovereign risk and the Australian farming sector, but events of the last two months have brought the issue to a head of steam once again.
After the carbon tax, two of the biggest news events of recent weeks have been the suspension of the live cattle trade to Indonesia, and the acquisition of a string of farming land at Gunnedah, NSW, by a Chinese government-controlled mining company.
These developments and our international relations with foreign countries, for different reasons, have serious implications for all rural industries.
I will start with the live export shutdown. Almost overnight, a multi-million dollar industry was brought to its knees following a 45-minute media report, an orchestrated campaign from the animal liberationist lobby, and what appears to be decision-making based on the minority Parliament rather than the national interest.
I don’t dispute the role of the media in keeping all sectors of the community to account, or the problems that were exposed in some Indonesian abattoirs.
But in what other instance does a government base its decisions on a media report?
It is the unfortunate fact that when the agricultural sector is looking for action from the government, the result is a tedious round of reviews and inquiries that, too often, gather dust in Parliament House, and a decision is never made. (The overhaul of drought reform is one example. After three reviews and two years, Queensland farmers are still waiting to see any change implemented here.)
The calamity of a snap decision on live export has reverberated across two countries and is not recovering at the same pace now the ban has been lifted.
It raises questions for other industries. If a secure and steady performer like the live trade can be shut down so quickly, what is the risk for other commodities?
Australia’s trading system underpins our wealth and it must be supported by forward thinking policy, not reactionary ad hoc government intervention.
If a foreign buyer of Australian agricultural products is signing contracts with us, would they raise legitimate concern about surprise government intervention?
Then there is also the issue of the foreign acquisition of farm land, which at Gunnedah seems to be slated for coal mining development.
There are two issues here with foreign land purchase. The first is the role of foreign investment, and the second is the mining sector’s interface with agriculture.
Foreign investment in farmland can play an important role in driving investment and productivity, and in fact signals a positive show of faith in Australian agriculture if that land is bought to remain a farm. Perhaps this optimism should be shared by our own Governments.
While it is critical that we improve our knowledge of who is buying what, and where they are buying it, we should not allow the concern to escalate to the point where it opens the door to cheap political scare-campaigns.
We have had a long history in Australia of foreign investment, although the current issue has raised alarm bells because in this case it is a government-controlled entity doing the purchasing.
But the reality is that we need some degree of foreign investment, so it is the government’s job to ensure this is monitored, and also to get on with the job of establishing its National Food Plan, to deliver a vision for the future that can guide investment activity.
Clearly at the moment the system for keeping a track of these issues is inadequate and needs review.
These are issues that must be put under the microscope in the forthcoming senate inquiry into foreign land purchase and acquisition.
In addition, if the land is converted to a mine, then our concern is the same no matter who owns the company. Good farmland must be protected from permanently destructive mining activities.
In Queensland, we have been promised that strategic cropping land (SCL) legislation to this effect will be in place this year. It will be especially important in light of these recent reports and concerns about foreign acquisition of farmland for mining.
We are still waiting for the SCL legislation, but QFF is continuing to lobby on behalf of our members to see a fair and robust SCL policy in place sooner rather than later.
Queensland agricultural lands are just as vulnerable to this problem. The longer we wait for this policy, the greater the opportunity for there to be suggestions of threats to mining investment.
Politicians are clearly challenged by this policy dilemma, almost as much as they are by balancing the State budget.
In the end they must find the right policy for the long term disregarding against the short term protection of State revenue.
I can’t help but think the budget is winning the battle. When and if it gets done the Queensland SCL policy proposes to completely ring fence just one percent of the State’s land from development. This seems a very small sacrifice given the consequences of losing all of it all together.