FEATURE O C T O B E R — N O V E M BER 2013
tively seeking Asian capital, as evidenced by this advertising. Landmark-Harcourts is one of several national Australian rural real estate firms that are setting up shop in Asia with the single objective of selling Australian farmland and real estate to whoever has the money. What makes this even more ironic is that Landmark is all that is left of what was originally the biggest farmer-owned co-operative in Australia. It was formed by West Australian farmers in 1914 as the Westralian Farmer’s Co-operative. Its main objective was to support regional farming operations, through the provision of services and merchandise to farmers, many of who were returning from the Great War. In 1924 alone over 9 million acres of land in Western Australia were acquired or set aside for soldiers returning home from the horrors of the trenches of Europe. This farmer-owned co-operative dealt in wool and livestock and during the Great Depression set up one of the first wheat pools in Australia in 1935. Landmark, now a faded and distant echo of the original Westralian Farmer’s Co-operative, seems today to be focused exclusively on chasing down the international funds that are changing the character of Australia’s agricultural property holdings. There are many who believe that this is the nature of international capitalism and the way that global efficiencies are created. However, this trend is also making landowners and the politicians who rely on their support uneasy. It’s no secret that farming in Australia today from horticulture, to livestock to crops is going through some times. Debts are high, land values are falling and banks are casting a jaundiced eye as debt-to-equity ratios inevitably change. The Australian national dairy industry is currently in trouble; of that there is no doubt. A mixture of poor seasons and low retail prices which are seeing supermarkets selling milk for less than bottled water and cola is eating away at the sustainability of the industry, at least as it is currently structured. It is a sad fact that the suicide rates amongst dairy farmers are becoming a matter of real concern. Accusations fly that politicians involved in electioneering (from all political parties it must be said) are more focused on kissing babies and photo opportunities than facing the real issues, including those confronting the Australian farmer. Prior to 2011 northern cattle producers from Queensland to Western Australia exported over half a million cattle every year to
Indonesia. All it took was one national television program showing animal cruelty in a backyard Indonesian abattoir, and what some would label a naive and inexperienced Australian government stopped trade with that market seemingly overnight. The Indonesian government punished Australia and many cattle producers went bankrupt. Now, nearly three years later with the price of beef skyrocketing in Indonesia the live trade is starting again but for many cattlemen and women in Australia, it’s simply too little, too late. Even with the value of the Australian dollar steadily falling from the heady days of A$1.10 to the greenback, it doesn’t look like anyone in farming (wheat farming especially) is going to make ends meet this year, let alone put something away to weather the tough times. Too many debts, and for many in Western Australia, the country’s main producer of agricultural exports, not enough rain. Put all of that together and mix it with the average age of Australian farmers which is now close to 60, with young blood not entering a tough industry, characterised by debt and those in control at boith the regional and national level should be getting very worried indeed. If you’re getting on in years and you want what time is left to be without the anxiety of farming, any buyer is better than no buyer at all. Who can argue with that? This is only one of the reasons that there is a marked lack of reluctance to sell to Asian investors, although it is quite disheartening to see third and fourth generation farmers mothballing equipment and padlocking paddocks. The truth of the matter is that most of them are left with little or no option due to the lack of support from Australian financial institutions and Government. Reports state that Landmark’s portfolio for the attention of Chinese investors is is overflowing. The organisation now has over 60 properties of various types listed. Not all of these properties are farms, reflecting the breadth of Asian interest in Australian property across the board. The questions most Australians ask is ‘does the federal government care?’ To the observer it certainly looks as if Canberra has other fish to fry. Australians are in the middle of the longest general election campaign on record and agriculture is not on the radar. Both political parties have used the ‘out of sight, out of mind, approach to the questions around the sustainability of Aus-
tralian agriculture and placed it in the — “too hard” basket. An aging demographic of farmers leading forced into retirement, Asian money looking for a home in an increasingly fluid international investment environment, profiteering, a willfully dismissive government or simply capitalism at work? Choose your poison. Whatever the reason it appears that the Australian agricultural sector is in very real danger of ‘buying the farm’, at least in its current form. Editors note: About a decade ago I was speaking to an grizzled older farmer while surveying a field of maize growing on one of the largest farms in South Africa. After some discussion about the state of farming during what was then one of the longest droughts in the recent history of the country he turned to me with a smile and said; “farmers, always complaining. There’s either not enough rain or too much’. Now whether or not you agree with those sentiments there seems to be something deeply wrong with the Australian agricultural sector, a malaise that transcends drought or the threat of flooding. The question of property ownership has never been more potentially divisive than when it touches on agricultural land. For many this industry is both the backbone of a country and the anchor point for a national psyche, one that in Australia values the concept of the ‘fair go’ and the mental construct of the rugged Australian ‘can do’ attitude, epitomised by the image of the Outback farmer, sheepdog by his side, wiping his brow after a long day coping with some of the world’s most trying conditions. The new Australian government would do well to pay close attention to the warning signs coming out of the agricultural industry - the attitude of a nation of very fickle voters may be more strongly in tune with these mental constructs than they realize and the perception of trouble in agricultural property ownership may spell trouble for a new government.
RODNEY PRESTIA is an Australian property expert who previously owned and operated one of the largest real estate agencies in Australia. He is currently the CEO of Dynamic Joy Investments. During his time as an Australian licensed real estate agent and accredited auctioneer, Prestia broke several records with regards to sales in the Sydney property market. He has built a business throughout Asia by doing one simple thing: telling the truth about the Australian property market – the facts, the trends, the growth areas, and locations of where to invest and to avoid.
67