As controversy continues to bubble over the latest big local farmland buy-up and what it means for food production, it's worth looking to see where these foreign raiders are coming from, who's backing them and how other countries are tightening their regulations to stop them.
New regulations were recently introduced in New Zealand which may potentially restrict who can buy agricultural land, after local farmers were repeatedly courted by foreign-controlled interests. The new provisions, introduced in January, require extra tests on overseas investment applications for "sensitive land" -- which includes farmland.
Ministers are now able to consider whether New Zealand's economic interests are being adequately promoted and safeguarded by any proposed purchase. "Large" purchases, which are 10 times the average farm size (ranging between 7.1 hectares for an olive farm to 443 hectares for a sheep farm), will also need to demonstrate a commitment to local involvement to get the minister's approval.
To try and avoid companies acquiring land in dribs and drabs, the new tests say purchases will still need to be tested if they are bought in one transaction or in multiple purchases over time. China-based Shanghai Pengxin is currently providing the biggest test of the new laws, as it waits on approval from the Overseas Investment Office to buy 8000 hectares of dairy properties belonging to the Crafar family.
Latin America, another target for foreign raiders looking to buy up big blocks of farmland, has also looked to tighten ownership laws. Last August, Brazil’s attorney-general reinterpreted a 40-year-old law to make it significantly harder for foreigners to buy land in that country. Argentines followed suit last month, putting a law before its Congreso de la Nación to limit the size and concentration of rural land foreigners could own.
, the current government is also looking to restrict transfer of land to foreign ownership, after it failed to pass under the previous administration.
In Canada, where provinces are in charge of regulating how much farmland foreigners can buy and regulatory frameworks vary, the National Farmers Federation says the country is losing its grip on prime food-producing land. They say it's sovereign wealth funds, backed by government money, which are buying up large swathes of agricultural land to capitalise on high food prices and avoid potential food shortages.
According to the Sovereign Wealth Fund Institute
, more than $US4.41 trillion worth of assets are held by these funds, most of which has originated from the harvesting of oil or gas resources. Middle East oil states such as Saudi Arabia, United Arab Emirates and Qatar -- together with China, Norway and Russia -- have the largest sovereign wealth funds.
Recently, Crikey reported
on the extent to which Qatar-based Hassad Foods had been buying up sheep grazing land in Queensland and Victoria's Western District. Backed by the Qatar Investment Authority, a sovereign wealth fund with around $85 billion in assets, Hassad has invested more than $60 million in prime agricultural land -- with a further $35 million in properties reportedly on the radar.
Crikey has begun mapping the recent purchases of prime Australian farmland by overseas interests (click the image to view the map)