Australia, the third-biggest wheat exporter, should welcome overseas investment in its agricultural industries to improve infrastructure and efficiency as Asian food demand climbs, said Agriculture Minister Joel Fitzgibbon.
“If we really want to capitalize on the opportunities that Asia offers to us, we will need a lot of capital,” Fitzgibbon told an agricultural conference in Melbourne today. “If we want to grow, improve our infrastructure, improve our efficiency, we will need foreign investment.”
Companies including Glencore Xstrata Plc and Archer-Daniels-Midland Co. are targeting agricultural assets in Australia, betting on stronger demand from Asia as living standards rise. Indonesia will top Egypt as the largest wheat buyer in five to 10 years, Warren Hogan, chief economist at Australia & New Zealand Banking Group Ltd., told the gathering.
“We cannot hope to be the main provider of food for the growing middle class of Asia, to China, without a significant level of additional investment,” Fitzgibbon said. “Much of that investment will need to come from foreign sources.”
Australia’s opposition leader Tony Abbott last year proposed tougher guidelines on overseas ownership of farmland, including a register of holdings. Australia’s ruling Labor party and Abbott’s Liberal-National opposition are split 50-50 on a two-party preferred basis, according to the latest Galaxy poll. Prime Minister Kevin Rudd must call an election this year.
ADM, based in Decatur, Illinois, agreed earlier this year to acquire GrainCorp Ltd., eastern Australia’s largest grain handler. The deal is subject to approval from Australia’s Foreign Investment Review Board and China’s Ministry of Commerce.