The Yeelanna Agricultural Bureau recently had Tom McKeon from Hassad Australia along as guest speaker. The meeting was publically advertised and, given the topic, there was a good role up of landowners and business people from across Lower Eyre Peninsula.
Hassad is a sovereign wealth backed company based in Qatar in the Middle East, which has been acquiring agricultural land across Australia over recent years. Local interest was sparked following the recent purchase of an amalgamated property at Ungarra, with further purchases of individual farms in the Edillilie district. The company also has land in the Upper South East, and Mid North of South Australia.
This, of course, caused some consternation among neighbouring farmers and within small towns, with people wondering how this might impact on their own future business opportunities and their community.
Tom took the time to explain firstly why they were purchasing land, how they would be managing it, and what their future plans were.
Qatar is a small, oil-rich country with no arable land whatsoever. It is quite deliberately ensuring its future food security with strategic purchases, not just in Australia, but around the globe. In the case of the Eyre Peninsula farms, they are using local contractors to undertake the farming operations. Interestingly, at both Ungarra and Edillilie, Hassad have engaged the previous owners/managers as their primary contractor, and I assume, as part of their management team.
When asked, Tom indicated they were not actively seeking more land on Eyre Peninsula at the moment, but did not discount further purchases if the opportunity arose. It was put from the floor that Hassad had paid up to 30 per cent above ‘market value’ (as had been reported in the media), an assertion that Tom rejected. At the same time he confirmed that they will be ‘shopping locally’ and supporting local businesses, as well as utilising a local workforce.
Tom spoke about the structure of their business and in doing so allayed some of the fears of the audience, who felt that Hassad may have a commercial advantage over their neighbours due to special arrangements. Because Hassad is sovereign wealth funded, each and every purchase is reviewed by the Foreign Investment Review Board, with its primary focus being our ‘National Interest’. But it is also registered in Australia as an Australian Agricultural Company and as such, is subject to the same tax laws, the same selling arrangements, and the same checks and balances as the rest of us.
There will always be farming families looking for the opportunity to expand their business – and it’s fair to say that a number of those in the audience were in this category. They understandably feel somewhat miffed (downright disappointed may be a more appropriate description) that they didn’t have the opportunity to purchase some of the land that Hassad now own. As Tom pointed out, Hassad can never go to an auction or the open market, because of the legislative requirements of the Foreign Investment Review Board – that is, they need to have approval before a transaction can take place.
It was also quite rightly pointed out, that ultimately it is up to the vendor, as to whom they might choose to sell, and for how much. It’s the old adage; for every successful sale, there needs to be a willing buyer and a willing seller.
Heading into the last Federal Election, the Coalition had as part of their policy platform, to lower the threshold at which a foreign investment review was to be triggered when a sale was made to a non-government entity. This was to be set at $15 million (cumulative), rather than the current $240 million. This would not be applicable in the case of Hassad, as all their expenditure is subject to review anyway, given they are owned by the Qatari Government.
It is also worth noting that currently just under 99pc of Australian farm businesses are fully Australian owned, and just under 90pc of farmland is fully Australian owned, according to figures released by the Australian Bureau of Statistics in June, 2014.
I understand also that both sides of Federal politics support the establishment of a ‘Register of Foreign Ownership’ of Australian agricultural land. This information is readily available from Local Governments around the country, so should be relatively simple to set up. What such a register would do is place information already in the public domain, into a more accessible format. Once established, it would give everyone the opportunity to know exactly what has been going on, what sales have occurred and the price paid (and received). It would certainly go a long way to filling the void in information flow that currently exists.