Tasmania’s growing reputation with Chinese farmers a double-edged sword

IT appears the FIRB, the governments and Jan Davis have overlooked the fact that with foreign buyers of our farmlands that younger Australian farmers cannot compete with foreign State-owned companies, and are being robbed of the opportunity to enter or expand because they do not have sufficient equity to sustainably acquire land.



nationally Chinese investors own 9,169,000 hectares

QUESTION the benefits for Australia …. is it the case our ‘very good products’ are to be exported to China and elsewhere as we Australians will have no choice but to consume inferior imported products?

CHINESE vertical integration is underway in Tasmania … as with VDL Farms at Woolnorth in Tasmania’s far north west owned by Chinese businessman Xianfeng Lu …

Mr Lu has recently purchased new machinery from CHINA for VDL Farms

Tasmania’s growing reputation with Chinese farmers a double-edged sword

By Manika Dadson

20 NOVEMBER 2019

A man and a woman in an olive grove

PHOTO: Helen Huang and Kelvin Xu run Cradle Coast Olives. (ABC News: Manika Dadson.)

RELATED STORY: Has Australia’s smallest state been left ‘vulnerable’ in its dealings with China?

RELATED STORY: Melbourne mansion among $17.3m worth of property seized in Chinese money laundering probe

RELATED STORY: Australia’s largest dairy VDL in turmoil again as staff raise animal welfare concerns

Helen Huang and her husband Kelvin moved to Tasmania a year ago to manage an olive oil business.

Key points:

  • In the five years since President Xi Jinping’s visit large Tasmanian agricultural businesses have been bought by Chinese investments
  • Most people who work on foreign-owned farms in the state are Tasmanian
  • The former chief executive of VDL farms has called on the Federal Government to better regulate foreign investors and hold them to account

Their olive orchard, which is near Ulverstone in the state’s north west, was bought by their Chinese friend from a Tasmanian couple earlier this year.

The pair spend most of their time maintaining the 400 olive trees, picking and pressing the olives and packing their homegrown olive oil to send around the world.

“Three quarters of the oil we send back to China and one quarter we sell locally,” Mrs Huang said.

Since President Xi Jinping visited Tasmania five years ago, six cherry orchards and the state’s largest dairy farm have fallen into Chinese hands.

Just last week, the Federal Government greenlit the sale of baby formula maker Bellamy’s, headquartered in Tasmania’s north, to Chinese dairy giant China Mengniu.

CAAN: Pathetic …. ‘the company must keep its headquarters in Australia for at least a decade, and it continues to invest $12 million in local processing facilities in Victoria.’

*“Because Tasmania has very fresh air, they have very nice water and I think that’s why they produce a very good product,” Mrs Huang said.

*”It’s very popular because the middle part of China is getting more healthy food.”

A woman standing beside bottles of olive oil

PHOTO: Helen Huang says Tasmanian produce is popular in China. (ABC News: Manika Dadson)

The country is Tasmania’s biggest international export market, and the Tasmanian Government wants to strengthen that partnership further in the next five years through its trade strategy.

*But the foreign investment has also created community angst.

*Promises made by Chinese investors in the state’s far north west have not been delivered, and last month the Australian Federal Police seized 1,200 hectares of farm land at Musselroe Bay in the state’s north east amid allegations of money laundering by Chinese nationals. *

Locals not willing to ‘get the cheque book out’

A woman sits at her computer

PHOTO: Jan Davis says farmers have the right to take the highest offer for their land. (ABC News: Manika Dadson.)

Agricultural consultant Jan Davis, who is also the former boss of the Tasmanian Farmers and Graziers Association, said Australians should not be surprised that foreign investors were buying land when many Australians were not willing to spend the money.

“It’s a reflection of the fact to some extent that Australian people don’t value their food and their farmers the way that other people do,” Ms Davis said.

Has Tasmania been left vulnerable in its dealings with China?

Since Xi Jinping’s 2014 visit, China has become Tasmania’s biggest trading partner and a major source of tourism. But experts warn the state must tread carefully.

“Others are prepared to pay to have the security of our land, our water and our food far more than we are prepared to pay.

“We talk about this being ‘our’ land, but it actually belongs to individuals and they should have the right to sell it to whoever offers them the best deal … if Australians want to buy it, get the cheque book out,” she said.

There is no publicly available figure for how much land Chinese investors own in Tasmania, but nationally the figure is 9,169,000 hectares.

UK residents own 10,239,000 hectares of Australian land, with the bulk of foreign-owned land Tasmania in the state’s far north west and on the west coast.

Foreign investors creating local jobs

A farmer stands with cows

PHOTO: Chris Brown is a north west dairy farmer. (ABC News: Manika Dadson)

Chris Brown is one of thousands of Tasmanians earning a living because of foreign investors.

Mr Brown is a sharefarmer — a farmer who lives and works on land owned by someone else and shares in the profits —at VDL Farms at Woolnorth in Tasmania’s far north west, which is owned by Chinese businessman Xianfeng Lu.

The Browns run and milk about 1,000 dairy cows on 400 hectares of Mr Lu’s land and take a 32 per cent share in the farm’s profits.

“My personal opinion is that sharefarming’s better … the more we earn, the more they earn, so it goes up like that,” Mr Brown said.

“We just supply all the labour and machinery and pay a third of feed costs and supplement.

“When we first started we had ambitions of having our own farm. We had a small farm at [nearby] Irishtown — 150 acres — but we’ve just sold that and we’re more comfortable down here.”

Man smiling in a field with cows

PHOTO: Circular Head Mayor Daryl Quilliam said it was important that foreign-owned farms employed local people. (ABC News: Manika Dadson.)

Mr Brown is not concerned that the land his family has farmed on for 28 years is foreign owned.

“It’s never been Australian owned anyway, so it was Kiwis before this and now China,” he said.

Circular Head Mayor Daryl Quilliam said the most people who worked on foreign-owned farms in the region were Tasmanians.

“I’d much rather it be owned by Australians but as long as the land is being farmed by Australian people, I think that is the important thing,” he said.

Former VDL CEO calls for more scrutiny

Mr Lu’s ownership of VDL Farms has come under fire on multiple occasions since he purchased the dairy in 2016 for $280 million due to his company Moon Lake not acting on promises it made to the Foreign Investment Review Board when the sale was first approved.

Moon Lake pledged to employ an additional 95 staff and invest $100 million into VDL Farms.

Chinese businessman Lu Xianfeng.

PHOTO: Chinese businessman Lu Xianfeng owns the Van Diemen’s Land Company. (ABC News)

Mr Lu has previously admitted those promises have not been fulfilled, but he did not respond to the ABC’s enquires for comment for this story.

*Evan Rolley, who resigned from his role as VDL Farms chief executive last year, is calling on the Federal Government to take more responsibility.

“Where a foreign investment is being contemplated for a project or a proposal, then if undertakings are given that form the basis of that foreign investment, they must be enforceable,” Mr Rolley said.

“There needs to be a method of enforcing those undertakings so the benefits that a government sees flowing to a regional community are in fact delivered.”

Mr Rolley said based on what was promised initially by Moon Lake, the right decision was made to approve the sale.

“What has been a failure has been a way of ensuring that that was delivered and if not delivered, penalties applied,” Mr Rolley said.

For VDL chief Evan Rolley November 2019

PHOTO: Evan Rolley resigned from his role as VDL Farms chief executive last year. (ABC News: Manika Dadson.)

Ms Davis agreed more needed to be done to monitor foreign investors.

“What we need to do is work harder and to ensure that everybody understands what the rules are and that our regulators, where the rules are important, are given the sufficient resourcing to be able to police properly,” she said.

“[But] without the investment that we’re seeing, not just for Tasmania but nationally in agriculture, we would not be able to compete with the influx of imported products from other countries.”

The ABC understands Mr Lu has recently purchased new machinery from China to help improve VDL Farms.

The Federal Government has been contacted for comment.

Cows in single file walking along a road

PHOTO: VDL Farm dairy cows walk along a road at a north-west property. (ABC News: Manika Dadson)

SOURCE: https://www.abc.net.au/news/2019-11-20/china-interest-in-tasmania-farms-double-edged-sword/11707472