Newly Launched Food Paper Open to Idea of Foreign Investment in Agri Sector

A newly launched discussion paper on food security recommended that Australia be open to more foreign investors in its agriculture sector to ensure the long-term viability of domestic supply and boost food export.

The National Food Plan pointed out that Australian investment alone is not sufficient to ensure continued growth of it food industry. The paper stressed foreign investment is an inevitable part of the equation.

Agriculture Minister Joe Ludwig, who spoke at the Tuesday launch of the paper, admitted that foreign investment is an issue, but being an open economy, the government will not block foreign flow of funds in the agri sector. The entry of foreign capital has created some fear among local producers as more Asians purchase land in Australia for agriculture production.

"Foreign investment has fuelled growth in Australian over a long period of time - foreign investment is welcome in Australia," The Herald Sun quoted Mr Ludwig.

Foreign capital entry is still seen as a threat by some Australian firms even if the country still produces food beyond its needs. At present, $27 billion out of its $40 billion annual food production is sold overseas.

However, with the predicted jump in global demand for food to go up 77 per cent by 2050, there are question if Australia could still maintain its food surplus by that time. The higher demand for food is expected to come from China, India and Indonesia as the three Asian nation's population further expands and number of affluent and middle-class consumers rise to 3.2 billion.

To address that question, the federal government launched a policy green paper on how to secure Australia's food future.

The controversy generated by the purchase of land by foreign investors is partly due to stiffer competition for land as urban development and the mining industry eat further into the remaining stock of pastoral land.