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October 15, 2012

Chinese Group Buys Huge Farm in Australia

by Phil Mercer

A Chinese-led consortium has bought one of the biggest farms in the world in outback Australia, prompting concerns about key assets being sold to foreigners.  Cubbie Station in Queensland produces cotton and grain, and has been taken over by a joint Chinese, Japanese and Australian enterprise. 

The 93,000 hectare property known as Cubbie Station covers an area the size of Australia’s national capital, Canberra and sits on the border of Queensland and New South Wales.

Supporters of the multi-million dollar deal to sell the property to a Chinese-led consortium say it will guarantee the future of one of Australia’s most iconic farms, which went into administration in 2009 following financial troubles.  Critics, however, fear it is the start of a sell-off of Australia’ agricultural gems to foreign companies.
 
The local mayor, Donna Stewart, says Cubbie Station, Australia’s biggest cotton producer, should have remained under Australian control. “We would like Cubbie Station to stay in Australian hands," she said. "It is, I think, a very sad day for the Australian people as a whole that we're selling off prime agricultural land to foreign interests,”

Approval of the sale was granted by the Australian government following advice from the Foreign Investment Review Board, which determines whether large-scale sales to overseas companies are in the national interest.
 
There is increasing interest from China in Australian agriculture, including the dairy industry, as Beijing tries to guarantee food supplies for its burgeoning middle class. The government in the island state of Tasmania has said it would welcome Chinese investment in its farming sector.
 
While critics bemoan sales to foreigners, Keith De Lacy, the former chairman of the Cubbie Group, which runs the property in Queensland, says there should be more support for overseas investment. "From Australia's point of view, we were built on the back of foreign investment. We've always had foreign investment, and we've needed it.  We're a big country with a small population. It used to be mostly British, then it was American. But wherever it comes from, it is all positive for Australia and not negative,” he stated.
 
Beijing and Canberra are looking at ways to allow wealthy Chinese investors to develop parts of northern Australia for farming.  The Australian government says such partnerships will always be subject to strict regulation.