The Wimmera property Llanthro was sold off by Chinese interests recently.

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 week show the total area of ag land with a level of offshore ownership has fallen just 0.3 percent from 47.7 million hectares to 47.56m ha last year.

The eighth annual report established by the Australian Taxation Office to provide greater transparency about the level of overseas investment in Australia’s farmland covers the period from July 2022 to June 2023.

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

Of the total 47.56m/ha of agricultural land with some level of foreign ownership by offshore interests, 36.24m/ha (76.2pc) is apportioned to the foreign share of assets held with some Australian investment, with the remaining 11.32m/ha (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 (41m ha, or 88pc of the total), followed by cropping (3.27m ha) and forestry (1.47m ha).

Largest foreign owners

For the fifth consecutive year, China remained the largest foreign owner of Australian agricultural land, by area – however Chinese owners have divested close to one million hectares over the last two years.

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

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

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

The United Kingdom closely followed with 2pc or 7.325m ha (824,000ha freehold and 6.5m ha 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 3.003m ha (0.8pc) with more than 2m ha each held by the Netherlands and the United States (0.6pc), 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 1.38m ha followed by the United States with 1.14m ha.

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
• Foreign entity restructures which have resulted in a change of the foreign entity’s status as a foreign person.

Foreign ownership on a state-by-state basis

The extent of foreign ownership varies significantly across Australia, with the heaviest concentration (by land area – not the number of landholdings) further north. Queensland, the Northern Territory, and the northern half of Western Australia bear the largest foreign investment on a percentage of ag land basis (see map).

Over the year to July 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 Northern Territory, Queensland, Tasmania and South Australia, but rose in Victoria, Western Australia and New South Wales.

Put more simply on a percentage basis, 29.2pc of agricultural land in the NT is foreign owned, followed by Tasmania (24.7pc), Western Australia (14.2pc), Queensland (12.2pc), South Australia (6.3pc), Victoria (6.2pc) and NSW and the ACT (4.9pc).

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 9.099m ha, and aggregate leasehold interest is 41.406m ha.

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.

Livestock

On a state-by-state basis, the NT and Queensland are running livestock on more than 13.3m ha, followed by Western Australia with 9.93m ha, South Australia with 2.92m ha, New South Wales with 1.57m ha, Victoria with 67,000ha and Tasmania with 59,000ha.

Cropping

Around 3,278,000ha of foreign held land is used for cropping – that has risen a massive 57.2pc on the previous year.

On a state-by-state basis, foreign owners with assets in Queensland are cropping on 1.24m ha, followed by NSW with 745,000ha, Western Australia with 728,000ha, the NT with 398,000ha (a questionable statistic, likely due to misreporting of landuse in Beef Central’s opinion), Victoria with 123,000ha, South Australia with 34,000ha and Tasmania with 6000ha.