Foreign Investment in North Australian agriculture
David Warriner speaks out on Foreign Investment
David Warriner
The reality is Northern Australia never has, and will not thrive without foreign investment,which is absolutely essential to take agriculture forward.
"It is a great thing!"
From almost 200 years ago there has been foreign investment successes and, there has been failures.
As somebody who has spoken to many current and potential foreign investors a few things are becoming very clear to me;
• There is certainly more interest than confidence;
• Usually the modern day foreign investor has no experience in agriculture or even in the relative supply chain;
• They are mostly wealthy individuals, private equity or sovereign wealth funds with a focus on financial fundamentals that are not beyond 10 years (1 cycle);
• Understandings & interpretations are rarely the same between cultures;
• There are now some investors who are dissatisfied and asking what happened; and
• News travels fast. They tell their friends!
What we really need to think about is how we stop the bad experiences. There should not be any if properties are bought at the right price, good management is sourced, and good strategy designed.
In earlier times when the investors had agricultural experience from another part of the world the understanding between them and Australian managers of the business was better. And in those times English was the first language on both sides. The cases here where English speaking investors are buying family businesses seems to be working. There has been plenty of press on this and the fact that family farmers are better connected to the land is very apparent in my opinion.
Now with non-English speaking investors we have an element of misunderstanding which is driving diminishing trust. Without trust no business can flourish in my opinion. You cannot ring-fence good managers in.
All land assets have their own unique opportunities and constraints, and this should be what determines the price. Not necessarily a plethora of benchmark valuations. Advisors and managers who can identify the unique constraints and opportunities of different properties need to be identified by the foreign investor.
