In April 2015 it was announced that the historic company of S Kidman & Co was for sale. S Kidman & Co is the largest private landholder in Australia, covering almost 11 million hectares of cattle stations in South Australia, Western Australia, Queensland and the Northern Territory, and is the owner of 160,000 head of cattle.

With it being reported that almost half of the prospective buyers of the Australian company are international investors, the debate over foreign investment in agriculture is bound to reignite (if it ever really went away).

Under the Foreign Acquisitions and Takeovers Act 1975 (Cth), foreign investment proposals are reviewed to determine if they are contrary to Australia’s national interest.

Under Australia’s current Foreign Investment Policy, all foreign government investors must obtain foreign investment approval before acquiring any interest, direct or indirect, in rural land regardless of the value.

Private foreign investors must obtain foreign investment approval for a proposed acquisition of an interest, direct or indirect, in rural land where the cumulative value of rural land owned by the foreign investor (and any associates) already exceeds, or immediately following the proposed acquisition is likely to exceed, $15 million. This threshold was lowered from $252 million in March this year. Significantly higher thresholds apply to private foreign investors from the United States, New Zealand, Chile, Singapore and Thailand in accordance with Australia’s free trade agreement commitments.

Further, from 1 July 2015 all foreign investors, both government and private, holding any interests in agricultural land must register those interests with the Australian Taxation Office, regardless of the value of the land. The data compiled will be used to create a national register, expected to be made publically available in 2016.

The proposed sale of GrainCorp to American firm Archer Daniels Midland in 2013 is the only proposed agribusiness sale to have been blocked by the Foreign Investment Review Board on the grounds of national interest. If it is proposed that S Kidman & Co ultimately be sold to a foreign investor, the decision of the Foreign Investment Review Board ought to be watched with great interest by those in the agricultural industry.

Jane is a Senior Associate and head of the Rural Law Team at Kelly Legal, and has a weekly column in the Rural Weekly dealing with agricultural and rural law. Jane can be contacted on 07 4911 0509 or jane.young@kellylegal.com.au