WA property Cherylton Farms covers 8554ha and its purchase by Australian-Canadian venture Excel Farms put it on to the federal foreign-ownership register in FY23. Photo: LAWD

CHINESE interests remained the largest foreign owners of agricultural land in Australia last year, but their landholdings have decreased by close to one million hectares compared with two years earlier.

Findings from the Federal Government’s latest annual Foreign Ownership of Agricultural Land Register released last month show the total area of ag land with a level of offshore ownership has fallen just 0.3 percent from 47.7 million hectares (Mha) to 47.56Mha last year.

Established by the Australian Taxation Office to provide greater transparency about the level of overseas investment in Australia’s farmland, the eighth annual report released this week covers the year to June 2023.

The ATO’s definition of foreign ownership includes entities with a level of foreign ownership of at least 20pc, so the register captures details of assets even when the majority of shareholding is in Australian hands.

Of the total 47.56Mha of agricultural land with some level of foreign ownership by offshore interests, 36.24Mha, or 76.2pc, is apportioned to the foreign share of assets held with some Australian investment, with the remaining 11.32Mha, or 23.8pc, held by Australian equity partners.

While the area of foreign held agricultural land decreased slightly last year, the overall proportion of agricultural land with a level of foreign ownership increased to 12.9pc, up from 12.3pc in 2022.

The ATO cites land holdings re-acquired by Australian owners for the rise.

Livestock production was the dominant purpose on foreign-owned land, accounting for 41Mha, or 88pc, of the total, followed by cropping on 3.27Mha, and forestry on 1.47Mha.

By state and territory, the NT and Queensland are running livestock on more than 13.3Mha, followed by Western Australia with 9.93Mha, South Australia with 2.92Mha, New South Wales with 1.57Mha, Victoria with 67,000ha and Tasmania with 59,000ha.

Leap for cropping

Around 3.278Mha of foreign-held land is used for cropping, up a massive 57.2pc on the previous year.

By state, foreign owners with assets in Queensland are cropping on 1.24Mha, followed by NSW with 745,000ha, Western Australia with 728,000ha, Victoria with 123,000ha, South Australia with 34,000ha, and Tasmania with 6000ha.

The Northern Territory area is pegged at 398,000ha, a questionable statistic, likely due to misreporting of landuse in Beef Central’s opinion.

Figure 2: Three-year comparison of agricultural land with a level of foreign ownership.

China stays at No. 1

For the fifth consecutive year, China remained the largest foreign owner of Australian agricultural land, by area, despite Chinese owners divesting close to 1Mha over the past two years.

While the top 10 countries by investment origin did not change in 2023 when compared to 2022, the rankings of Switzerland and Germany changed places.

China, The Netherlands and United States overall agricultural land interest decreased, Bahamas remained unchanged, and all other countries in the top 10 increased in land area.

China holds a 2.1pc share or 7.596Mha, comprising 759,000ha freehold and 6.836Mha leasehold, after divesting 190,000ha last year.

The United Kingdom closely followed with 2pc or 7.325Mha, comprising 824,000ha freehold and 6.5Mha leasehold, after purchasing an additional 30,000ha during the year.

The overwhelming majority of country owned by both Chinese and UK interests in Australia is leasehold.

Canada now owns more than 3Mha, or 0.8pc, with more than 2Mha each held by The Netherlands and the United States, each on 0.6pc, and The Bahamas, Switzerland, and Germany.

When it comes to the nation with the largest share of Australian agricultural land on a freehold basis, The Netherlands tops the list with 1.38Mha, followed by the US with 1.14Mha.

Generally, the changes in agricultural land interests by country of ownership compared to 2022 can be attributed to:

• New registrations of acquisitions of agricultural land that have settled since the last report;
• Agricultural land that has been sold to Australian entities and has been removed from the register;
• Agricultural land that has been sold to other foreign entities with a different foreign country of ownership; and,
• Foreign entity restructures which have resulted in a change of the foreign entity’s status as a foreign person.

Foreign ownership by state, territory

The extent of foreign ownership varies significantly across Australia, with the heaviest concentration by land area rather than number of landholdings being further north.

Queensland, the NT, and the northern half of WA bear the largest foreign investment on a percentage of ag land basis (see map).

Over the year to June 2023, there was a change in the amount of foreign held agricultural land in each of the states and territories.

The level of foreign held land fell in the NT, Qld, Tas, and SA, but rose in Vic, WA, and NSW.

Put more simply on a percentage basis, 29.2pc of agricultural land in the NT is foreign owned, followed by Tas on 24.7pc, WA on 14.2pc, Qld on 12.2pc, SA on 6.3pc, Victoria on 6.2pc and NSW and the Australian Capital Territory on 4.9pc.

Figure 7: Foreign-held interestes in Australian freehold and leasehold land by state and territory as at 30 June 2023.

The graph above shows the ratio of freehold and leasehold land to the total foreign held land by state and territory reported on the register as at 30 June 2023.

The aggregate freehold interest is 9.099Mha, and aggregate leasehold interest is 41.406Mha.

Foreign ownership of rural properties on a state-by-state basis

Foreigners own more agricultural properties in NSW than any other state or territory, followed closely by Victoria:

• NSW/ACT: 1973 parcels of land – up 1.6pc or 42,000ha;
• Victoria: 1843 – up 3.9pc or 25,000ha;
• Queensland: 1478 – down 0.5pc or 73,000ha;
• Western Australia: 1326 – up 1.8pc or 204,000ha;
• Tasmania: 972 – down 0.8pc or 3000ha;
• South Australia: 812 – down 0pc or 1000ha;
• Northern Territory: 93 – down 2.4pc or 345,000ha.

While the number of foreign-held agricultural properties fell by 17.6pc or 1816 land holdings, the ATO explained the decrease is due to methodology, where multiple land titles with the same address are now being counted as one property, where previously they had been counted separately.

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