foreign investment – Global Farmer in Australia

Japan pays less for Australian liquefied natural gas than Australians do.

Dark Money

Michael West, Adjunct Associate Professor, School of Social and Political Sciences, University of Sydney, on March 14 2017, in an article in The Conversation, discloses that there is no shortage of liquefied natural gas (LNG) in Australia or in the world, in fact there is a glut. The people of Australia and particularly landholders have been treated deplorably by the international energy industry. As pressure was put landowners and governments by the energy industry to allow prospecting for more gas, coal seam gas (CSG), on some of the most valuable agricultural land in Australia, landowners feared for their future and fought for their property rights. What the landholders didn’t know was that all the time the international energy industry was being less than honest with them, the Governments of Australia and the people of Australia. What follows are parts Professor West’s convincing article in The Conversation. Together with comments from me regarding the apparent dishonesty, at best, of the international energy industry. I thank Professor West and The Conversation for the material provided. I hope this time we can cause an outrage and have questions answered.

A global cartel has manufactured a gas crisis in Australia, when in fact there is a world wide glut. On the 14th of April Professor West predicted (and it happened) that the Prime Minister would be prevailed upon by the cartel to stay away from doing for Australia what the Carpenter Government did for Western Australia when it secured for WA 15% of the Pluto gas field production for WA. The cartel will plead with the Turnbull government not to interfere with ‘the market’ and encourage it to persuade State governments to issue licences to explore the Australian landscape for coal seam gas (CSG) so as to avoid an impending gas shortage. Put ‘there is no gas shortage’ into you search engine and you will find that the lies of the cartel prevail.

According to Prof West there is no such thing as a ‘gas market’. Six big companies have formed a cartel and control the market price: Santos, Exxon, BHP, Origin, Arrow Energy and Shell. Michael West claims ‘Markets have visible prices and quantities on the bid and offer. The cartel even hides information about its gas reserves from government.’

Continue reading “Japan pays less for Australian liquefied natural gas than Australians do.”

Has China got Australia by the short and curlies?

‘When you’ve got them by the balls their hearts and minds will follow.’

Theodore Roosevelt.

Australia and its sophisticated agricultural industry have to decide whether they want to be a feeder of others, or be fed by others. Don’t laugh at that. Of course the world can feed Australia— it’s already started as we increasingly become more reliant others for food. We have no more people in this country than there are in a couple of big Chinese cities and we are an attractive proposition to feed, if only for access to our resources and for what food we can produce that others can’t. I read somewhere recently that China would only have to increase its horticultural production by about 3% and it could feed Australia. Think about that and the global fresh food trade. There are Egyptian oranges for sale in my town. So how important are we to China and how important is China to Australia? You may be surprised.

Continue reading “Has China got Australia by the short and curlies?”

National Bank Bastardry – Part III – Greed.

Money and Greed Conquer All — Including the Law?

So who in this land of the free protects the weak and poor, like the Cronin family, from the financially strong like Ferrier Hodgson and the National Australia Bank? The answer is nobody, at least nobody that we have been able to find—we are still looking.

Man walks up to jewellers shop window, chucks a brick through it, grabs a couple of trays of diamond rings and then an hour or two later finds himself wearing steel bracelets and in the back of a Paddy Wagon.

His mate, who the robber had taken into his confidence, had hidden around the corner, took a video of the robbery, sold it to the police and collected the reward.

No excuses for the NRL player recently videoed behaving very badly, but the cockroach, the traitor who took and sold the pictures got something like $40k from the media scum is different. That cockroach deserves a punishment far worse than that metered out to the player.

The other one dobbed in his mate and if he has any vestige of a conscience will have to live with his treachery all of his life.

What motivated the two video enthusiasts? Greed. Greed caused the Global Financial Crisis and few if any ‘on Wall Street’ who caused that crisis were punished, they took their government funded retirement packages and disappeared as wealthy men.

Money Never Sleeps – Neither do the Greedy.

Perversely the 2010 film ‘Wall Street-Money Never Sleeps’ the sequel to the famous 1987 film ‘Wall Street’ starring Michael Douglas became almost cult films. Both stories concentrated on greed and both, apparently, caused a rush of graduate applicants both in America and the UK wanting to work in the banking industry.

One of the few advantages of being over a three quarters of a century young is (thankfully) I can still look back with a deal of clarity and compare yesteryear with today. Don’t jump to conclusions—this is not about the good old days. I have only reached this age because there are cures for what killed many of my ancestors. ‘Jack the Magic Dancer’ is not the man he was and I continue, helped by some very clever people, to beat him. I cannot help but compare our wonderful health system with our antiquated legal system. It is as if we are frightened to change, little realising that an antiquated legal system increases the cost of the health service. Think about it.

My age and my experience were on my mind a lot while was writing the last two episodes of the Global Farmer. I have contemplated if the world has changed or whether I have? Whenever I have started to write this series, the word GREED has materialised on the screen—so I thought this month I should pay it some attention.

I should also declare I have only been to one mortgagee’s sale in my life. I only went to fly the flag. I was a farm manager so the chequebook wasn’t all mine but there was nothing to stop me, for a mate, pushing the bidding if needed.

I saw the mortgagor’s wife in tears while she was serving tea and sandwiches with the other ladies from the CWA. I didn’t stay for the sale. The mortgagor had borrowed to pay a family member out who was a ‘sleeper’ in the family farm. Then we had two dry years and he had a fire over half the farm. I learned later they had a good sale, the neighbours rallied round so he didn’t need me after all. Someone bought his farm ute and gave it back to him.

Then I heard that a neighbour had bought the farm from the receivers and leased it back to the original owner. That was back in the 70s. Maybe many of us were still pulling chains and rakes around clearing land, just like those before us had done going back generations? Maybe there were too many ‘battlers’ there to kick a ‘mate’ when he was down? There were the exceptions of course, there were the ‘greedy’ ones hunting a bargain, but the neighbours outbid them.

Continue reading “National Bank Bastardry – Part III – Greed.”

A Lidl of what you fancy does you good.

European Bank Subsidised Lidl Expansion with A$1200 million.

This article owes its origins to an intriguing report originally published by GRAIN. You will see why I found it intriguing when you get to it. I have spent some time on the Global Farmer discussing agricultural subsidies, little did I know and I’m sure you didn’t, that the Guardian Newspaper recently revealed German discount supermarket giant Lidl and its sister chain Kaufland have benefited from almost US$900 million (A$1200 million) in public development money over the last ten years. Is this just another form of subsidy to encourage the global expansion of European supermarkets and European food?

The companies, owned by the large retail company Schwarz Group and controlled by one of Germany’s wealthiest families, received loan funding from a little-known wing of the World Bank and from the European Bank for Reconstruction and Development (EBRD). There is no suggestion there was anything ‘wrong’ with the funding, as you will see it is part of the specific mandate of these organisations funded by taxpayers and owned by governments to encourage local development, in this case in Europe.

The German Federal government, on their website has been heavily promoting both Lidl and Aldi in America to help it to become established in that country and, no doubt, sell food that has been made or produced in Germany. Lidl like Aldi, also sell a range of German made hardware, electrical goods and many other things.

Aldi already have stores in Australia and it is understood they plan many more. Lidl are also planning a chain of stores throughout Australia. In what seem like a few years in the UK they have secured over 10% market share and are causing both Tesco and Waitrose, the two biggest food retailers in the UK, to review their business plans.

They have made no secret about being ‘aggressive’ with their entry into America. Maybe interesting times for the Australian consumer, but what about the producers and what few processors are left, what of the future for them?

Continue reading “A Lidl of what you fancy does you good.”

Can we live without China?

The Changing of the Guard.

Preamble.

Over recent times as Australian agriculture has endured droughts, poor prices and incompetent governments; amid the chaos there have been two major overriding topics for discussion.

The first has been trying to separate the rumours, the gossip and the chit chat from the truth regarding the extent, the size of Chinese investment in Australian agriculture, in land, as distinct from agribusiness or food processing.

There is a body of opinion that claims Chinese interests, including Sovereign Funds have made substantial purchases of land in Australia, using a variety of investment vehicles, which have enabled them to avoid scrutiny by the Foreign Investment Review Board (FIRB).

We have the figures from the FIRB and we name who the biggest investors in Australia agriculture have been over recent times and the results will surprise you. China is at the bottom of the list, below Hong Kong. So why the public and in some cases political interest in China who ‘officially’ appear to be a minor investor? Is it xenophobia, fear, nationalism? — they all mean the same thing really. Do we fear China and is that because we don’t understand them? Whose fault is that?

These are difficult questions for us as a people and as an industry. It is a far more serious question for the media, and I believe the media should shoulder a great deal of the blame, because they have wrung every bit of emotion they can out of China and Chinese investment in Australia, giving voice to rumour and innuendo. Yet the records show that the media have been at least less than diligent and probably lazy in failing to report who the big, billion dollar plus, non-Chinese investors have been in Australian agricultural land over recent years.

The second big question is, forgetting agriculture, can we now manage, as a country, without China? We have all but exported our manufacturing base, everything from engineering, to clothing to hardware to food processing — you name it, what we once made ourselves we now get from China.

If it’s ‘Made in China’ it’s designed to be affordable. The more we buy from China the more dependent we become on them and the more vulnerable we are as the alternatives become uncompetitive.

The resource boom of the last last decade should have made Australia strong but there’s a fly in the ointment, Barclay’s Bank Kieran Davies reports that Australian household debt is equal to 130% of Gross Domestic Product (GDP) this compares to an average of 78% average across the advanced world making us more vulnerable than most to another financial crisis.

So we’ve spent the boom on paying ourselves wages and salaries big enough to build the biggest houses in the world with ‘entertainment centres’ and a bathroom for every resident, double garages to hold the boat and the dual cab 4wd ‘trucks’. Enough left over to holidays to exotic destinations and the like — instead of spending our money on our country, on the infrastructure future generations will need to make us world competitive.

China is now the world’s largest economy. America will fight them for that position — but no matter what happens, China’s influence on the Australia will continue to grow.

Australia’s challenge will be to find the point of balance in our relationship between our greatest ally, America, and the country we cannot manage without — China.

Continue reading “Can we live without China?”

The China Enigma

Be not afraid of growing slowly; be afraid only of standing still

There is now no doubt, there is unquestionable evidence that the Premier of Western Australia, The Hon Colin Barnett, MEc. MLA. Minister for State Development; Science and the Hon Ken C. Baston, Minister for Food; Fisheries, are intent upon doing everything they can to secure more Chinese investment into West Australian agriculture. How they are going to do it?
They are going to hold an investment conference especially for the Chinese. Mr Barnett and Mr Baston are certainly not standing still:

Western Australia – China Agribusiness Cooperation Conference.
State Reception Centre, Kings Park, Perth
9 -11 April 2014

Premier Barnett with a hook for catching sharks.
Photo:WA Today.

Premier Colin Barnett is a passionate West Australian. There is also no doubt that Mr Barnett has determinedly used his Office, and the influence that goes with that Office, to secure major commitments from the Chinese to invest in West Australian industry, mainly into mining, but there have also been substantial Chinese investments in agriculture.

Mr Barnett has led delegations of business people from Western Australia to China to further cement relationships and to forge new ones.

I don’t think it would be unfair to call Colin Barnett a Chinaphile.

Premier Colin Barnett Southern China Airlines Gala Dinner — Premier Colin Barnett at Southern China Airlines Gala Dinner.
Photo: WA Tourism

There has always been a belief among the majority of West Australians that ‘Chinese’ investment in Western Australia in the past has been conditional upon the imprimatur, and investment of the Central Government of the People’s Republic of China.

In other words the Government of China is always involved somewhere in the deal as an equity partner. Mr Barnett must be aware of this and be unconcerned that a sovereign state is investing in and becoming an owner of, Australian freehold property.

As far as I am aware it has never been denied that the Chinese government will be a equity partner in any investment in Australia.

Recently Mr Barnett was critical of Australia’s foreign investment rules, claiming they were sending the wrong message to China. Mr Barnett said that the United States could invest more than $1 billion in Australia without being subject to Foreign Investment Review Board Rules, but it was different for China’s state owned enterprises where any level of investment from $1 up was subject to review.

Mr Barnett believed this caused resentment in China.

In July 2013 speaking from Zhejiang province in China Mt Barnett said he believed the Chinese were not seeking to own Australian land – they just wanted to protect their investment for food and have a secure relationship with Australia.

Yet the previous month, June 2013, the Queensland Country Life reported that Chinese investors had spent $757 million in the first quarter of 2013 buying land in Australia, with WA, according to Landmark – Harcourts, topping the charts with sales of $350 million. True or false? We may never know.

Well, whatever is the truth, what the Premier really believes will be revealed on April 9 2014. Continue reading “The China Enigma”

‘We’ll all be Rooned,’ said Hanrahan.

Australia is part of the Developed World and Australian agriculture has yet to answer the question as to whether it is capable of increasing food production to meet the projected global demands of the future. Are we capable of increasing food production by at least 40% and so help feed the world?

There is global consensus that by 2050 the world population will have grown from 6 billion to 9 billion. To feed the extra 3 billion people the world will have to increase food production by more than 40%. Eighty per cent of that increase will have to come from the Developed World.

There has to be some doubt whether we can. Terms of trade in agriculture are lousy and our debts are unmanageable. There has been and continues to be, a reduction in both federal and state funds for research and development (R & D) and in a later article we will tell the story behind some frightening figures on the spread of salinity in Western Australia and Australia. Continue reading “‘We’ll all be Rooned,’ said Hanrahan.”