Australian farmland to be marketed to local buyers first before foreign investors

Real estate agents will be required to show that they have marketed Australian farmland to potential local buyers first before it could be sold to foreign investors under new rules. Local investors must have been given the chance to buy the land first as the government restricts purchases in an attempt to help local companies better compete for farm sales and safeguard national security.

Treasurer Scott Morrison announced in a statement that Australian farmland worth over $15 million would need to be marketed by agents to prospective local buyers for at least 30 days. The new rules are among the latest steps by the government to keep a tighter rein on foreign investment.

The 30-day advertising clause will be listed among the guidelines the Foreign Investment Review Board (FIRB) considers when it comes to assessing the sale of Australian farmland. Along with his announcement, Morrison said that concerns about the ability of Aussies to take part in the sale process of agricultural land acquisitions have been a factor in his previous foreign investment decisions. These include the approval of S Kidman & Co Limited’s sale.

Foreign buyers will be required to demonstrate that the agricultural land they wish to purchase has been part of a public sales process and that it was comprehensively marketed to prospective Australian bidders for at least 30 days. Also, local bidders must have had an opportunity to play a part in the sale process.

Federal Labor agriculture spokesman Joel Fitzgibbon reacted to the announcement of the new rules, calling it a “political stunt.” He said it was an attempt to lift the government's support among voters.

He believes that the announcement sends all the wrong messages to investors. He suggested that a farmer selling his or her land will seek interest or advertise both domestically and overseas in an attempt to seek the highest bidder. "Anything that makes it more difficult for investors is a bad thing for Australian agriculture,” the ABC reports Fitzgibbon as saying.

Analyst Matt Dalgleish said that locals remained to be the owner of the vast amount of agricultural land in the country. “This announcement will appeal to voters that have moved their support to parties such as Pauline Hanson’s One Nation,” he said, according to Reuters. Based on FIRB figures, total foreign investment in Australian farmland dropped to 13.6 percent from 14.1 percent in the year to June 30, 2017.