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AusBuy on the attack over Chinese dairy farm purchases in Victoria
AUSTRALIAN ownership advocate body AusBuy is attacking government decision makers over a Chinese company’s planned investment in “40 to 50 farms in Victoria including the Glenormiston Agriculture College”.
“What is wrong with our governments that they would consider allowing the Chinese Government’s State owned enterprise to buy 40 to 50 dairy farms, and the Victorian State Government to then lease the Glenormiston Agricultural College to them to train their people, who would enjoy private accommodation for 150 people?” asked AusBuy CEO Lynne Wilkinson ahead of a regional farmers meeting on the issue last month.
“Yet the Victorian State Government stopped funding for this facility, and Melbourne University and TAFE did not manage it well, leaving farmers with no access to this asset.”
But the dairy industry in Victoria seems broadly supportive of the move – at least in recent statements by the Victorian Farmers Federation and Australian Dairy Farmers – as the industry is badly in need of investment and must open up new markets.
Tasmanian group Linear Capital is orchestrating negotiations through a joint venture company supported by Chinese interests, Farm Gate 88 Pty Ltd, and has stated proposals were for “a major development of infant formula production plants in New South Wales and Victoria for the export of infant formula to China”.
The proposal is to take milk from farms in the region, including those proposed to be purchased by the group in a rumoured $400 million deal, then process and value-add to those products before export to China.
Statements on the Linear Capital website describe negotiations with ‘major Chinese state-owned enterprises’ to invest in dairy farms and processing plants in Victoria and New South Wales.
“Linear Capital has sourced substantial milk supplies direct from regional farms for long term contracts in Victoria and Tasmania and in conjunction with Farm Gate 88 Pty Ltd through their operational facilities in New South Wales substantial milk supplies from the Riverina region. Linear Capital through these strategic alliances are seeking further alliances with Chinese enterprises to co-operate in investment, production and technology.”
Linear Capital managing director Troy Harper told the regional The Standard newspaper the plan was to use the college to train Chinese and local people in best-practice animal husbandry.
“It will not be international workers versus national workers,” Mr Harper reportedly said. “The Chinese are very interested in our animal husbandry. We are some of the best in the world at it. The Chinese are not that good at it. The Chinese are coming to learn from us.”
AusBuy’s Ms Wilkinson said it was a sorry state for Glenormiston Agricultural College, which was donated to the government by the Black family to be held in perpetuity as an agribusiness training facility for the region.
“The long established Black family have farmed in the area for generations and donated the land and college to the state to be used in the interests of Australian agriculture and our farmers, and that it remained as an agriculture college,” Ms Wilkinson said.
“No Australian government is entitled to give priority to off shore interests as appears to be the case here. If Australia is to thrive again, why would we sell these dairy farms to the same country we are in a rush to sign Free Trade Agreements, so they effectively sell to themselves?
“Our governments seem to consistently give priority to off shore interests. We may be (in) ‘showing off’ time at the G20, but ‘open for business’ means whose business? No other developed country is so naïve as to allow the sale of strategic assets that were built by our own people to other countries, global companies or superannuation funds. What’s in it for Australia?”
Ms Wilkinson said the fears for the future shape of Australian dairy farming were real.
“Questions must be asked,” she said. “Will they meet Australian standards? Will they pay their imported workers the same as required of local businesses here under our employment laws? Will they determine the price our milk is sold off shore, and potentially drive down the income of our own farmers? Will they limit access for local processors to milk supplies for Australian consumers?”
Ms Wilkinson said AusBuy saw the situation as the latest flashpoint in a long-term decline in conditions for Australian farmers that mean the best way out is to sell for foreign interests – the only ones offering the right price.
“The question is often asked: Why are the farmers selling?” Ms Wilkinson said.
“Poor policies over decades have driven profits down and debt up, and we have not counted this since 1998. How can we make decisions as a nation if we do not look at the consequences of our decisions?
“A business that did not know its true financial position for over 16 years or know who really owns wealth creating assets for over 40 years would not survive, yet our governments tell our farmers and our businesses to be productive and competitive.
“Other countries do not have the answers. We need to engage and support our own people first to build our future. Those that have survived are among the most productive and competitive in the world, but they are required to play to a different set of rules to their competitors the local referees favour the other sides.
“More than 90 percent of our dairy brands are foreign owned. How does Australia benefit from assets generations of Australians have built? If it is not owned here, the decisions, profits, jobs, skills and reinvestment are at risk.”
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