Publications / Foreign Investment

9 Mar 12
Foreign investment in Australian agriculture - Senate enquiry due to report

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In response to growing public pressure and media attention, primarily focused on concerns over Australia’s food security, the Federal Government last year established a senate enquiry and commissioned a report on the level of foreign investment in Australia’s agribusiness sector.  In particular the enquiry was to review the application of the ‘national interest test’ when screening foreign acquisitions of Australian farm land.  The senate enquiry is due to report back this month.  In the meantime, we take a look at the impacts of a recently issued policy statement from the Foreign Investment Review Board (FIRB).

Following the release of the Australian Bureau of Agriculture and Resource Economics and Sciences (ABARES) report on 18 January 2012, FIRB issued a policy statement in relation to foreign investment into Australian agriculture.  The report concluded that foreign investment in the agricultural sector enhances Australia’s food security by increasing efficiency and productive capacity. 

In its policy statement, FIRB has reiterated the importance foreign investment plays in financing investment into maximising Australia’s food production, delivering productivity gains and technological innovation as well as supporting Australia’s position as a major net exporter of agricultural produce. FIRB’s continued support of foreign investment is consistent with the ABARES report which found that foreign investment in the agricultural sector encourages increased production, job creation and contributes to the prosperity of rural communities as well as the broader Australian economy.  That report also found that 99% of agricultural businesses are, and 89% of agricultural land in Australia is, Australian owned and that current foreign ownership levels of agricultural land, businesses and water entitlements are comparable with levels reported in 1983-1984.  The new FIRB policy (released in January 2012) (Policy) seeks to address these issues.

Private foreign investment

Apart from the annual 1 January increase, FIRB’s existing monetary thresholds will remain unchanged. This means that acquisitions of farm land or agricultural businesses valued at under $244 million by non-government foreign investors do not need FIRB approval (which is consistent with the position for foreign investment in other, non-sensitive sectors).

Foreign government investment

Under the Policy, all proposed direct investment by foreign governments and their related entities (irrespective of the value of the investment), including in agriculture, must be examined by FIRB. 

Policy changes

The broad national interest guidelines set out in the Policy include the effect of a proposed investment on national security, competition, the economy, the community and other government policies.  The Federal Government also considers the nature of an investor and the extent to which the investor operates independently of foreign governments. 

In addition to these national interest guidelines, the Policy now gives further guidance on the areas of consideration for proposals relating to investment in agriculture. In particular, FIRB will also consider:

  • the affect of the proposal on the quality and availability of Australia’s agricultural resources (including water)
  • land access and use
  • agricultural production and productivity
  • Australia’s capacity to remain a reliable supplier of agricultural production (both to the Australian community and to Australia’s trading partners)
  • biodiversity, and
  • employment and prosperity in Australia’s local and regional communities. 

The Policy also confirms that all potential foreign investors must comply with Australian law, irrespective of the value of the investment. 


Care must be taken with any FIRB application relating to the agricultural sector to address and satisfy each of the national interest guidelines.  With current focus on this sector and the sensitivities associated with foreign ownership of Australian farm land, we are seeing the policy applied rigorously, particularly for foreign government investment. Specialist FIRB advice at an early stage of a proposed acquisition is vital to ensuring that foreign investment red tape does not prevent or delay your transaction.


Focus covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. Focus is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.

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