Friday, 20 January 2012

Is majority or near majority foreign ownership of Australia's dairy, sugar, and red meat industries endangering our food security?

From Australian Food News:

Almost half Australia’s food industry is owned by foreign investors, report shows

January 19, 2012
Matt Paish

A report on foreign investment in Australia from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) has found that foreign firms accounted for ownership of about half of the nation’s dairy, sugar and red meat sectors.

The report, commissioned by the Australian Government’s Rural Industries Research and Development Corporation (RIRDC), also says that current foreign ownership of agricultural land, business and water entitlements in Australia is comparable with the levels of 1983-84.

According to the report, major companies investing in Australian agribusiness include private companies such as Cargill and Finasucre, public companies such as Wilmar and Parmalat, at least one farmer cooperative, Fonterra, and a state-owned conglomerate, COFCO.

The report states, “Foreign investment in agribusiness has typically been made by companies involved in the same or similar business in other countries seeking to expand their activities at an opportunistic time. However, Kirin (a brewing company) and Wilmar (active in a number of commodities not including sugar) each branched out into new sectors when they invested in Australia’s dairy and sugar sectors, respectively.”

Foreign investment growth in Australian red meat processing

The level of foreign ownership in Australia’s red meat processing industry is now higher than ever, according to the report, with 42 per cent of the industry owned by foreign companies.

According to the report, foreign investment in Australian meat processing has been undertaken largely by companies established in the meat industries of other countries, and their interest has been focused on export rather than domestic operations.

The largest player in Australian meat processing is the Brazilian-owned company JBS Australia, a division of JBS, Brazil’s largest multinational in the food sector, and one of the world’s largest meat companies. The plants now owned by JBS accounted for around 24 per cent of Australian red meat production in 2006 and 2007.

Other major players include US company Cargill, which accounts for 8 per cent of red meat production in Australia, Japanese company Nippon (6 per cent of red meat production) and Harmony, a company based in the Cayman Islands.

Foreign investment in Australian dairy manufacturing

More than half the milk produced in Australia is now processed by foreign-owned companies, with 47 per cent of the nation’s milk processors were still Australian-owned.

Fonterra, a New Zealand farmer-owned cooperative, and the Japanese-owned Lion together handle around 45 per cent of Australia’s milk production. Parmalat, formerly Italian but now under French control, accounts for a little over 5 per cent.

The Australian-owned cooperative Murray Goulburn is still the largest individual dairy processor in Australia, taking around 35 per cent of milk produced. Fonterra, one of the world’s largest dairy manufacturing and exporting companies, is cooperatively owned by New Zealand dairy farmers.

According to the report, foreign ownership of milk processing capacity appears to have been beneficial for the industry. Major foreign investors have injected funds to improve efficiency and maintain profitability while at the same time engaging in some winding down of existing, out-of-date capacities.

Foreign investment in Australian sugar milling

Three foreign-owned milling groups, Sucrogen (controlled from Singapore–Malaysia), Bundaberg (from Belgium) and Tully (from China), now undertake around 60 per cent of Australia’s raw sugar production. Sucrogen mills account for around 43 per cent, Bundaberg for 11 per cent and Tully for 5 per cent.

According to the report, Sugar production in Australia has declined through the past decade as a result of low sugar prices, and a process of rationalisation has taken place, with a number of mills closing. The availability of additional capital from new foreign owners has facilitated this rationalisation and maintained efficiency in the industry.

Tags:

ABARES, Australian-Bureau-of-Agricultural-and-Resource-Economics-and-Sciences,dairy, foreign investment, investment, red-meat, RIRDC, rural-industries-research-and-development-corporation, sugar

PLEASE NOTE

Below the embedded document immediately below these words

are updates + a list of links for further reading.

Update 2012-01-21

Reports to-day that Chinese investment in Australia is coming under increased federal government scrutiny, with ASIO and other intelligence groups weighing up possible national security risks.

Further reading:

Security and sovereignty : the truth behind foreign investment - Paul Barratt

Foreign investment will boost food security - Stephen Kirchner

Food security the fear as foreign investors rush in

Australia’s Food Security May be Jeopardised by Foreign Investments into Agri Firms