China's Australian farm plan doesn't hold water
The average Australian farmer has had it tough in recent decades. What scientists describe as a one-in-1,000-year drought has driven many off the land and, for those who remain, the long-term prospect of less rain because of climate change appears to herald a decidedly gloomy future.
Enter China. Just as the insatiable Chinese demand for Australia's vast reserves of iron ore, coal and other minerals has proved a godsend for mining companies and their employees and contractors, is it now the turn of Australia's farmers to be similarly enriched?
According to a report on April 29, in the Beijing Morning Post, a senior official in the Agriculture Ministry, Xie Guoli, says China is looking at leasing farmland in Russia, South America and Australia to ensure the nation has a greater chance of long-term food security.
Just how dire is China's agricultural crisis was made clear by a story last month from the news agency Reuters. It said that China's rapidly dwindling agricultural land is reducing its capacity to produce enough grain to feed its population.
What is also driving the looming crisis is changing taste buds. As people become wealthier, they are eating more dairy and meat products - both of which Australia produces in vast quantities and already exports to China.
So, how realistic is Beijing in thinking that it might be able to replicate the strategy it has adopted in the Australian resources sector of investing directly in projects? Over the next few years, can the Australian farming sector expect to see Chinese agricultural companies on their doorstep asking to buy or lease millions of hectares of farmland to produce meat, grain and dairy products that will be exported back to China?
For the Australian government, the prospect of large-scale Chinese investment in its agricultural sector is highly problematic for a number of reasons. As a consequence, Beijing is likely to find it much more difficult to achieve than has been the case with mining.
First, the Australian farming lobby is politically very powerful - there are about 130,000 farms in Australia and 99 per cent are family owned and run.
The idea that Chinese companies would buy Australian farms or even lease them for long periods to feed China is likely to meet stiff political opposition. Leaving aside the question of the imagery of an iconic Australian way of life being sold off, there is also the question of what such a strategy would do to Australian domestic food demand.
Australia's most important agricultural water system, the Murray-Darling basin, has been devastated by long-term drought and neglect, and this is having a direct impact on the capacity of agricultural production in the medium and long term.
China needs to understand that Australia's available farmland is also shrinking because of climate change and drought. Unlike mining, where Australia is rightly viewed as a long-term reliable supplier, the situation with agriculture is much less certain.
Greg Barns is a political commentator in Australia and a former Australian government adviser
