Are We Scared Of Foreign Farm Investments?

February 14, 2012 at 7:48 pm · Filed under farming, Foreign investment, livestock, Livestock issues, meat industry, politicians, rural australia, Rural business, rural issues

Foreign investment in farming is a tricky issue. Many believe that if you own something you should be able to sell it to whomever you wish. That’s part of the capitalist system. However, being part of a society means we have all sorts of responsibilities to others who live in the society and there are rules that govern our behaviour. As a result, no land title holder is actually allowed to do whatever they like with their land. e.g. They can’t farm drugs on it and they can’t denude it of native bush. The assets in fact, are not to be used against the national interest. So, presumably, if foreigners buy Australian land, they need to follow the same rules as if Australians owned it. I guess this why David Olsson: Lawyer & Chairman of the China-Australian Chamber of Commerce, Beijing stating that,
“Just because a company is owned or controlled by foreigners does not mean that the assets cannot be utilised in the national interest”, is a bit of a furphy.
It sounds feasible on the surface and I would like to think it possible. However, I wonder how it works in practical terms. Is it similar to Alcoa that has received multi-millions in Australian government assistance to employ Australians but is able to ship its profits off-shore? Wouldn’t it be better if we could keep the profits in Australia to spread across even more jobs? I think there are other related issues to consider as well. e.g. For years Australian dairy & beef seedstock has been sent to China & Indonesia? With the exception of the immediate sales value, how does that help our Australian society?
If the created wealth of a country isn’t kept in that country my first thoughts are that apart from that country e.g. Australia, not benefiting as fully as possible from the success of the venture (as profits are put to work off-shore), the country is open to other abuses. Australia has a problem at the moment in that because of its high standard of living, its labour costs are relatively high. If they weren’t then the economy would be in the same shape as Europe and the USA as there would be even less flowing funds than there are. My concern with carte blanche foreign farm/asset investment, is that Australia again gets screwed on price which in turn relates back to labour rates which puts us at a severe disadvantage to 3rd World countries who will always beat us on labour rates. Ha! Even China is now apparently losing labour to Mexico and Africa now.
Read David Olsson’s article here
And just so we don’t all go beating-up on China as a leading global culprit here, Prof Mike Peng, Uni of Dallas Texas, discusses the difference between various national investors. here
What do you think?
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