As temperatures warm across the inland and winter cereal crops enter the grain fill stage, the talk in rural communities is not just of grain prices or the weather outlook but of the foreign ownership of land and agribusinesses. With more family farms being bought by overseas interests, some landowners fear that their own chances of long-term survival are at risk. Others question whether the small and medium towns that currently service rural areas will remain viable as broad-acre industrial farming spreads.
Farmers dependent on grain storage and transport infrastructure owned by GrainCorp fear that if US agribusiness giant Archer Daniels Midland receives Foreign Investment Review Board approval to take over the Australian company facilities may be closed down or sold off, leading to higher freight and storage costs. With the National Party having taken up their cause, the GrainCorp sale will test the Coalition government's resolve to encourage foreign investment.
Australia's dependence on foreign investment has long been part of economic orthodoxy, and the case of GrainCorp seems to vindicate all the arguments as to why it is essential to national prosperity. GrainCorp apparently lacks the financial wherewithal to upgrade ageing infrastructure - and to compete effectively against the large multinational firms that now dominate international agricultural trade. A takeover by Archer Daniels Midland will ensure that GrainCorp can upgrade decaying assets, build new facilities and access its putative parent's vast international network of companies.
Likewise, the arguments for allowing foreign companies and foreign state-owned enterprises to buy up agricultural land appear unassailable. Family-run farms are finding it increasingly difficult to make the capital-intensive transition to broad-acre farming. All the more reason, therefore, to encourage foreign companies with the financial capacity to bring new economies of scale to bear in agricultural production to invest here. And why, since we have long allowed British and US interests to own agricultural land here for decades, make an issue of Chinese state-owned firms buying Australian farms? Though technically absentee landlords, these firms can surely be relied on to safeguard their assets as well as anyone else. And lest it be overlooked, the willingness of the Chinese and others to invest here has allowed many families worn out by the uncertainties of farming to make a dignified (even profitable) exit from the land.
Many Australian farmers aware of the necessity to ''get big or get out'' are agnostic about foreign ownership. The level of interest in the cities would seem to be minimal. And yet, it remains a politically sensitive topic. The Ukraine government's decision to lease more than 3 million hectares of farmland - or 9 per cent of its arable land - to a Chinese company for 50 years will arouse considerable anger and fear, not the least because future produce is to be sold at preferential prices to Chinese state-owned conglomerates. The company buying the land has sweetened the deal by promising to build a motorway and bridge in the region, but opponents are concerned about smaller farmers being pushed off the land, rising unemployment and a decline in long-term rural development.
There may well be an element of xenophobia to such fears, but Chinese companies, particularly those involved in resource extraction in Africa, have not distinguished themselves with their environmental stewardship or willingness to hire local labour. And while agribusinesses such as Archer Daniels Midland cannot be faulted for their business acumen, their loyalty is to their US shareholders. If profitability can be enhanced by shrinking the operations of a subsidiary in a foreign county, it will not hesitate to act. Potential social impacts will have no bearing on its thinking.
This is why some in the Nationals, notably Barnaby Joyce, would like the Graincorp deal blocked. The Liberals may believe there is no economic justification for blocking it, but their junior partners have a mandate to query it. Indeed, Coalition unity may depend on conditions being placed on the sale.