Chinese buy more farms BOBBIE HINKLEY 06 Dec, 2012 01:00 AM
Agriculture and Food Minister Terry Redman is also renowned for his support of foreign investment in WA's agricultural systems. RECENT news that Chinese agricultural conglomerate Heilongjiang Feng Agricultural has laid claim to even more WA farmland has added more fuel to the heated foreign investment debate.
In addition to its recent purchase of the 23,336 hectares of Joyce family farms at Lake King and Lake Varley, it was recently reported the Beidahuang Group's operational arm had also bought about 6500 hectares of prime grain growing land at Ongerup with the intention to bypass CBH's bulk handling facilities and export cereal grains directly to China from alternative facilities at the Albany port.
Ongoing mainstream media reports suggested the company had acquired about 30,000ha in recent months for a $52 million price tag.
And while those same reports reiterated the threat of Heilongjiang Feng Agricultural's potential move to circumnavigate CBH's grower-owned supply chain in a bid to create its own micro-Chinese economy at the expense of WA growers and their land, it was a question of whether building or re-modifying existing port facilities at Albany would make financial sense for a company with about 30,000ha of land in the relative vicinity of Albany's township (to date).
Earlier this week CBH chief executive officer Andy Crane confirmed CBH recently met with representatives from Heilongjiang Feng Agricultural to discuss its purchase of farmland in WA and the company's future supply chain requirements.
He also told Farm Weekly the discussions were positive and ongoing despite suggestions Heilongjiang Feng Agricultural would forge ahead with its own transport and export plans.
"CBH is a WA grower-owned co-operative whose supply chain has been built through the reinvestment of profits by its grower owners during the last 80 years," Dr Crane said.
"We are confident our supply chain offers users an attractive value proposition through lower storage and handling fees and freight rates to comparable organisations and the most efficient infrastructure of its kind in Australia.
"CBH is passionate about the long-term sustainability and viability of WA grain growers and the grains industry and that's why we encourage all new entrants to utilise and support our existing and efficient infrastructure provided it can meet their needs and delivers the value they require, which we believe it can."
Dr Crane said as an organisation and an industry reliant on exports and international market access, CBH recognised the benefits which could come from foreign investment in agriculture in Australia.
He told Farm Weekly Australia had a long history of foreign investment, much of which had positive outcomes including the introduction of additional capital, jobs, ideas, technology, relationships and market opportunities.
And he also understood the concerns of many countries about food security and the desire to secure a reliable long-term supply of commodities.
"We believe the CBH supply chain can be a key part of addressing those concerns by providing a unique link to WA growers and their supply chain infrastructure for the benefit of both growers and customers," Dr Crane said.
It was reported last week that Heilongjiang Feng Agricultural's most recent purchase was 6500ha from David Webster at Ongerup for $23.2m.
Positioned right at the heart of Heilongjiang Feng Agricultural's scouting grounds between Lake King and Ongerup, Lake Grace grower and WA Grains Group chairman Doug Clarke welcomed the Chinese company's most recent investment.
Citing competition as the main reason for his support, Mr Clarke said investments like Heilongjiang Feng Agricultural's most recent at Ongerup and its additional plan to bypass CBH would force WA's bulk handler to work harder for its members in light of rising supply chain costs.
"As far as the argument that WA growers won't receive benefits from this type of investment goes, all we need to do is look to the mining industry and almost every other industry in Australia which is or has been at some stage or another funded or bolstered by foreign capital," Mr Clarke said.
"I'm pleasantly surprised at Dr Crane's positive outlook toward foreign investment and in terms of being able to offer the most efficient infrastructure of its kind in the country, I hope he's right.
"CBH can hardly take an anti-foreign investment stance when it has invested millions of dollars in flour mills and ports overseas.
"It would be a very hypocritical point of view to take.
"Though the issue of the Chinese buying up in the Great Southern and Wheatbelt still presents the co-operative with a double edged sword.
"I see it as a huge benefit to have an alternative export outlet at Albany but if CBH were to do a special deal for the Beidahuang Group, which I can imagine it will try to do to stop the competition, it would actually give the Beidahuang Group more money to buy more land."
But other sources closely linked to Heilongjiang Feng Agricultural's Great Southern project disagreed and pointed out that supply chain competition wouldn't exist for growers because Heilongjiang Feng Agricultural would operate in its own marketing space with China.
Heilongjiang Feng Agricultural's search for prime land wasn't tipped to end in Ongerup either.
Further reports also suggested the company hoped to secure about 100,000ha of broadacre land worth about $4 billion to grow more grain for direct export to China.
Attempts were made to get in touch with the 6500ha Ongerup farm's previous owner David Webster but he was unable to be contacted before Farm Weekly went to print on Monday afternoon.
