CRI听力:Chinese Investment into Australian Agriculture

The Australian government has authorized the sale of the huge cotton producing Cubbie Station to a Chinese and Japanese consortium led by Shandong Ruyi.

The consortium will own 80 per cent of the property with the remaining stake owned by an Australian company.

As a condition of sale, the Australian partner Lempriere must have control over the operation and management of Cubbie Station.

Also, Shandong Ruyi must sell down it's share of the property to 51 per cent within the next three years.

A foreign company owning such an enormous piece of prime agricultural land is causing a stir in the Australian farming community.

But, the President of the National Farming Federation, Jock Laurie, says that the main problem is the lack of information about foreign investment in agriculture, not the investment itself.

"It's just about making sure that Australian farmers aren't put at a disadvantage about anybody else, it's about understanding exactly what's going on and I think the Australian community want to have that information and want to have that debate."

Currently, the vast majority of Chinese investors into Australian agriculture act purely as silent partners who provide the cash but have no management control.

But Hans Hendrischke, a Professor of Chinese Business at the University of Sydney's School of Business says this will change in the near future.

"China is coming in as an investor and China is eventually going to come in as an operator. All the regulations that you see at the moment these are temporary and they will lead to a much stronger Chinese involvement in the Australian economy."

Hendrischke says that this is a positive step, especially in agriculture, where Australia and China have a lot to learn from each other:

"In agriculture that is a process where Australian researchers, farmers and Chinese investors and China's agriculturalists with have to co-operate and find areas. There's areas of common background, for example arid land farming where the Chinese have experience in north-west China and where Australia has experience obviously with the large parts of dry land. Experiences and technologies have to be put together but we are only at the beginning of this process.

(Chinese and other foreign investors are putting money into projects that domestic investors won't touch.

In the case of Cubbie Station, the giant cotton farm went bankrupt with 320 million Australian dollars in debt and was up for sale for three years before Shandong Ruyi made an offer.

Jock Laurie says that Australian investors and farmers value their country's agricultural assets differently to their foreign counterparts.

"They're looking at the world stage and their probably looking at that asset differently to what Australian farmers value that asset and I think that's one of the reasons why it hasn't been taken up over the last two or three years. I think certainly the drought has dented the appetite for many Australian farmers to really run that risk because they're more looking at how they can manage the loads that they've got at the moment and carry on through that drought.)

The sale of Cubbie Station is set to be finalised in the coming weeks.

For CRI, this is Alexandra Blucher.