Thursday, 22 September 2011
Foreign Acquisitions Amendment (Agricultural Land) Bill 2010; Second Reading
I rise this afternoon to address the new geopolitics of food, and that is precisely what this bill, the Foreign Acquisitions Amendment (Agricultural Land) Bill 2010, is about. I am quite alarmed at the contribution of the government by way of Senator Bishop's remarks—accusing people who are very concerned about what is going on with the acquisition of agricultural land and water rights as being populist, as taking a narrow sectoral view, as being rarely well informed of the facts and as not confirming the facts and analysis. He even suggested that this is wasting the Senate's time.
Senator Bishop may wish to acquaint himself with some facts rather than maintaining the ideological position, which he outlined here today, of not wanting to actually address this and suggesting that we already have the facts. Oxfam released a report today saying that 'land grabs' are leaving poor families 'hungry and homeless'. The report says:
Around the world, including in Australia, we are observing a mad scramble for land. A growing global economy and population, climate change, food insecurity and changing diets are driving governments and investors to acquire land outside their own borders for future food supplies.
That describes what is going on internationally, and Oxfam is raising it because of massive land grabs, mainly through Africa and in the poorer developing countries.
Those land grabs are being carried out by countries that profoundly changed their position as a result of the food riots and scarcity in 2007 and 2008. As a result of the extreme weather events of climate change and as a result of peak oil and rising oil prices, as well as the displacement of agricultural food crops with biofuel crops, we had a situation of massive food inflation. As a result, countries like Russia, Argentina and Vietnam limited or banned the export of wheat and rice so as to be able to feed their own people. That left those countries that import food short of food. They had plenty of money, but they had no food. That is precisely what triggered the Arab spring. Actually, the riots in Tunisia started because people could not afford to buy food, because Russia had banned grain exports and those countries in the Middle East are major importers of food.
The result was that countries that have outgrown their own land and water resources—such as China, India, Saudi Arabia, South Korea, Kuwait, the United Arab Emirates and Qatar—basically set out on a global land and water acquisition plan. That changed everything, because they intend to buy land and water from other countries from which to feed their own people at times of food insecurity. They will also send their own workers to those countries to produce the food and, if necessary, they will employ security forces to protect that food. For example, Pakistan has already advertised 400,000 hectares of land for sale, with a security force.
It is anticipated that we will be living on a planet that is suffering climate change, with a massive population increase. Countries now recognise that the trade system as it currently applies around the world is inappropriate. When we have food shortages as a result of extreme weather events, if countries then decide to ban exports of food then some countries will be unable to feed their own people. That is what I meant by the 'new geopolitics of food' when I stood up to speak. Australia has a big responsibility globally. We need to feed our own people but we also need to maximise our food production so that we control where that food can go—so we can put it onto the international market but also, if we choose to, we can direct it to humanitarian causes or we can respond to make sure that food is able to go where food is needed, not sell our land and water resources so that other countries, like Qatar, China, Saudi Arabia and so on, outsource food production for their own people using Australian land and water, and therefore take away from Australia's national security and sovereignty in terms of being able to make decisions about growing our own food and directing it onto international markets.
As to Senator Bishop saying that Senator Xenophon and I do not have the facts or analyses: the whole point of this bill is to get the facts—because, as Senator Xenophon said in his second reading speech, you cannot find out right now how much agricultural land and water is already in foreign ownership. That is something that the Greens highlighted at the last federal election. We called for a national food security plan for the protection of agricultural land, not only from foreign ownership but also from issues like encroachment from urban expansion. And we wanted to make sure, as I said this morning in relation to the expansion of coal seam gas, that we start protecting land for food production in Australia, because it is essential to us and to other countries.
That is where this bill is going. What it does is create a national interest test to be applied against proposed acquisitions of agricultural land. New Zealand has a national interest test for the acquisition of agricultural land. Is anyone saying that people in New Zealand are populists with narrow, sectoral views and are xenophobic or whatever? No, they are not. Everybody accepts that New Zealanders have a national interest test. When anyone applies to buy land in that country they have a five-hectare limit and then it is assessed if it is greater than that. What Senator Xenophon and I are saying is that, in the Australian context, if the application for land is worth more than $5 million then it should be assessed, there should be a national interest test applied. Secondly, we are saying that any interest in Australian agricultural land greater than $5 million be subject to an application to the Treasurer and that the Treasurer be required to publish online the applications of interest in Australian agricultural land and the status of the applications as they proceed. So it is not saying anybody cannot acquire land or water rights; it is saying: let's actually get the data and see what is going on.
As a result of the concerns that have been raised by the Greens, by Senator Xenophon and by many people in the rural community, the government was put under the hammer here to actually start going out to find out what is going on around Australia—and that is why, in November last year, the government asked the Bureau of Statistics to look this up, having not done it since the early 1980s. What a disgrace it is that no-one was keeping any record in Australia of that.
Senator Bishop went on to talk about national averages and so on, but let me put some facts on the table. What that ABS report said was that already 9.4 million hectares in the Northern Territory are more than 50 per cent foreign owned. I will say that again: 9.4 million hectares. In Western Australia 3.1 million hectares are already more than 50 per cent foreign owned. And what is of considerable concern to me is that a third of water licences in Western Australia are foreign owned. You have to say to yourself: we are getting into a situation here where we need to look to the future, look to the security of growing food here and exporting food.
Let me give you an example of why countries are buying up water rights and agricultural land. The Saudis, for example, used to produce most of their own wheat. But they have overused their underground aquifer; it is currently drying up. So the Saudi Arabian wheat production fell by two-thirds and by 2012 it is estimated that wheat production in Saudi Arabia will cease altogether. So this is a crisis for developing countries. And this is a crisis for poor people in developing countries because those countries are recognising that they are going to have to get food from somewhere. That is why I say it is a new geopolitics. Food is going to drive national security concerns in this century, and the sooner this parliament gets on top of that, and recognises that the current trade arrangements, the current rules, do not actually provide for equity and justice and fair allocation, the better. That is why Oxfam is out there today saying, 'Look what is going on in these developing countries; we in the developed world have a responsibility to stand up in the FAO and in other international forums and start talking about these issues.'
As to the accusation that the committee report suggests that what Senator Xenophon and I are doing somehow contravenes the free trade agreement: there is no evidence of that whatsoever in the report. It is a lovely thing to stand up and say it, but there is no evidence for it. What it says is:
The committee is concerned that the bill may be in breach of 'national treatment' obligations as part of Australia's Free Trade Agreements …
And then it goes on to talk about the threshold of five hectares. Senator Xenophon and I have changed the threshold of five hectares, so it no longer applies. Furthermore, it was the committee's view that it 'may' be in breach. It did not say it 'was' in breach, and there is no legal evidence to support the claim. So it is a view that it is in breach. If it is in breach in Australia, why isn't it in breach in New Zealand? Why is it that the New Zealanders can have a national interest test that applies perfectly well in New Zealand, and everybody accepts it there? It is clearly a national interest test and it does not contravene free trade agreements—and New Zealand is a party to exactly the same free trade agreements as we are. So I am very interested that that claim is being made. Also, as I indicated before, the general thrust of opposition in the committee's report is that further data gathering and research are required on foreign investment in the agricultural sector before any legislative policy changes are made. That is the whole point of the bill: to start actually getting the data by requiring that any interest in Australian land or water resources worth more than $5 million goes through this process and goes up online so that people can see what exactly is going on and so that there is a record of it.
As to the issue that we might end up with a national interest test that could be prescriptive and expose the Treasurer to judicial review, the evidence received by the committee in the case of New Zealand is that over the past five years there has been a judicial review of three decisions. In each case the decisions were upheld and in all cases third parties brought the proceedings. None of the proceedings related to a decision that was declined. So it seems to me that the New Zealand approach is working particularly well.
The next issue that was raised was that you cannot have two separate national interest tests—that somehow that is inappropriate. Well, no. Treasury said:
… the Bill also imports into the FATA an elevated degree of sensitivity for rural land which would appear to surpass that applying currently to the most significant of business proposals.
Yes, that is correct, because that is the point of the bill: to settle out separately a sensitivity for rural land, and rural land includes water resources. That is precisely why we are doing this.
To me, the issue here is that the world has changed, and unfortunately there does not seem to be a recognition in this Senate that climate change, extreme weather events and increased population pressures have altered the whole issue of food security globally. That is the fact of the matter. The trade agreements we have around the world do not reflect those changes, nor do they reflect the fact that it is foreign governments, in many cases, that are out there behind companies that purport to be independent or private sector but are actually the face of foreign governments, so it is in Australia's national interest to collect the data.
I will go to one particular example. This is in Victoria. A large investment in prime Western District farmland by the Qatar government has already occurred. Qatar based Hassad Food, which is the agricultural arm of the Qatar government, paid $35 million for more than 8,000 hectares of sheep-grazing and cropping land in Victoria's Western District. The deal includes five homesteads near Ararat and is believed to be one of the largest acquisitions of Victorian pastoral land in recent history—that is from June this year. Local stock and station agents estimate the Qatar government paid a premium of up to 20 per cent in order to secure the controversial deal.
That is the point. It is going to distort land prices in rural and regional areas because, when foreign governments decide they need to outsource food production somewhere else and will pay a premium to get that land and water, local growers will not be able to buy land. Local young people trying to get on the land will be suffering from inflated prices. We have already been through this with managed investment schemes doing precisely the same thing. It is a distortion of the market, and that has already occurred.
If you add to that a recognition that Qatar has only about 65,000 hectares of arable land, that shows why it is so keen to buy land elsewhere. That decision in Victoria this year follows its purchase last year of 2,630 hectares about 330 kilometres west of Melbourne, and the company already holds a $100 million portfolio including 6,800 hectares in New South Wales and a 125,000-hectare holding in Queensland's Clover Downs, which it paid $18.5 million for. So there are already really substantial holdings. The other thing that you are not seeing is where these companies which are the arms of foreign governments are coming and buying small lots of land. Individually they appear to be quite small, but you do not have a record across the country of what collectively or regionally is happening to land ownership.
I think it is in the national interest for Australians to know exactly what is going on but also to have in the back of their minds—it is far from xenophobic—Oxfam's concerns about land grabs globally and what it means for us in Australia to think that the most just and decent thing to do is to control our own land and water resources so that we can make sure that we maximise food production, make choices about where we grow food and put it onto the international market and are able to have control of that food. That is so that, where you have a food security crisis, you do not end up with large areas of land from which a whole lot of food is just directed back to a foreign government, essentially, leaving other vulnerable countries and vulnerable populations around the world starving.
This is why it is called the new geopolitics of food. It has now escalated to a national security issue. Right around the world, governments are thinking about this. New Zealand is one government sitting out there that has a perfectly reasonable system. Senator Xenophon and I are seeking to have this parliament move to just record data—to develop a national interest test and record data—and get the Treasurer to put that data up on the website. Then we can make decisions about whether we want to take further action to restrict or to change the current rules. But what we are proposing does not stop any foreign investment at this point; what it does is start to provide that information that the Australian community needs.
I say to Senator Bishop that he has made a very serious error and has demonstrated his own ignorance by suggesting that concerns such as this are populist and that they do not stand up to analysis. As Senator Xenophon and I are showing, they are forward-thinking concerns. We are anticipating the geopolitics of the next 50 years, influenced by climate change, population growth and peak oil, and what we are now seeing is a significant shift. We will have to put a lot more money not into armies and the military but into supporting people to adapt to climate change and increase productivity in agricultural land around the world so that we can feed people and avoid the conflicts which are inevitable unless we start to do as we are suggesting: look at the national interest and look at our own national sovereignty issues.