Today's Business Headlines

Chinese buy farmland to boost food supply – The West; BHP opposes floating LNG plan – The Aus; Blow for Barnett's GST hopes – The West; Cuts fail to dent iron ore – The West; Coalition says PM broke the law – The Fin


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Perth WA
Re Chinese recent farmland purchasing in South West Australia (and elsewhere)... Chinese perchase farmland in cost effective productive regions, say Albany) as well as areas where the likelihood of profitability is diminished, such as Lake King. Farming operations in high production areas on the surface look as thoughthey will produce product that will feed through the normal marketing chanels and be subject to standard market forces and pricing If they choose to). When you consider the difficulties in maintaining a viable farming operation using the corporate model..... absentee owners, hired managers etc that will obvously be used in operation such as the recent purchase of the Joyce families Lake King properties, it is quite difficult to see how an ongoing finacially posuitive business will be maintained. Assuming that maintaining financial sustainability is not possible in the longer term using corporate farming in that knife-edge environment, one must look at the next logical possibility. The long term objective ofthe buyers is not about a business venture that is profitable in Australia, but rather the supply of foood, and at profit, in China. Consider...... The farm produces the grain at cost, same as everyone else. The grain has cost what it cost per tonne to produce, regardless of whether it is viable to sell it that year through normal chanels at current market price. Home grown farmers are obliged by necessity to sell produce each year to replenish their cash supply sio that they can repeat same next year, and hopefully make a profit. The Foreign owned business has no such requirement to sell the produce locally, as its objective is simply to supply food, back to its home country. The foreign producer simply stores the grain at cost, either on farm or in CBH or similar. Hires a Panamax ship, loads the grain and ships it to its own mills at home. One can't argue that the cost of producing the grain has not gone directly into the Australian economy, which has a positive effect, but you can not escape the fact that the grain (or any other agricultural produce) will be shipped without ever being available in Australia. It is pointless to argue the case of one farms produce disappearing overseas as it has close to no impact, but increased incrementally over the years, and in times of scarcity of certain food products.... the outcome will eventually be shortages here. The above is an instance only of what is possible to happen, but looking forward, it is a case of what is most likely to happen. Another instance of good intentions (on paper) being modified to suit the new owner at a later date will be the recent Ord stage 2 sale to Chinese interests. No other single investor was ever going to ever put forward an an offer that gets tha plan off the ground in one stroke of the pen. Enter China. A sugar mill will be built, and farmland developed to produce sugar...and every-one will be happy. Jump forward 10 years and the astute investors decide that scaling back the sugar production is a good idea, because vegetable, or some other form of intensive agriculture is more profitable.....and over a period, the broadacre farming will evolve into high intensity farming, and with the ability to ship the owners produce to and where as they see fit.

It is an absolute disgrace what is happening in this country with buy-ups by the Chinese. Australians have worked hard to achieve what we have in this country and this government allows it to be sold off at a whim. I would much rather support Australian farmers with my tax money than Chinese investors who are being handed Australia on a plate. Wake up Australia. Whilst the Chinese tighten their belts on foreign ownership they are being allowed to buy up our valuable land. The stupidity of this government and the apathetic nature of Australians will be the detriment of the future for our kids.

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