* Australia opens far north for farming, eyes foreign
* Chinese investment remains controversial, subject to
* China, world's most populous country, desperate for food
By Maggie Lu YueYang
CANBERRA, July 25 A Chinese property
conglomerate is bidding for a 58-sq-mile (15,000-hectare)
farming project in the Australian outback as Canberra looks to
open the remote north for farming to tap booming demand for food
from Asia, especially China.
Shanghai Zhongfu Group is bidding for the Ord East Kimberley
Expansion project in Western Australia state, with plans to
develop agriculture business in the sub-tropical region, but may
face opposition from politicians increasingly concerned about
foreign investment in Australian farms.
"It's just a good business opportunity for us, as our boss
found it might be profitable," Zhongfu's vice president, Larry
Yan, told Reuters. "We have engaged local lawyers and experts to
work on this."
The Chinese bid for the Kimberley project comes as Australia
and China examine plans to allow Chinese investors to unlock
Australia's far north for agriculture.
China, the world's most populous country, does not grow
enough food to feed its 1.4 billion people, and central planners
have long worried that the lack of self-sufficiency leaves the
country vulnerable to sharp fluctuations in international prices
for soybeans, grains and other edible commodities.
Some Chinese companies have responded by attempting to
acquire land overseas to grow crops for export back to China, in
some cases sparking local unease over the threat of a Chinese
Australia is the driest inhabited continent, but its
tropical and sub-tropical northern regions have plenty of water
in areas which are largely undeveloped, remote and where there
is little infrastructure.
The Kimberley project would open new tracts of farmland to
irrigation from the waters of the Ord River and Lake Argyle,
which holds enough water to fill 21 Sydney Harbours.
Zhongfu had no agriculture projects in China and the
Kimberly project would be its first investment in Australia, Yan
said, declining to comment on details of the bid.
Local media have reported the project is likely to include a
A$400 million ($411 million) sugar mill and a
The Western Australian government's project director, Peter
Stubbs, said the Kimberley project needed investment of at least
A$500 million over six years.
"The strongest interest has been from investors interested
in sugar and cotton," Stubbs said, adding a decision on the
project was due in October.
China's top beverage maker, Wahaha Group, also plans to
invest in the agriculture sector in Western Australia, probably
to build dairy farms to sell milk powder back to China, a
spokesman for Wahaha told Reuters.
Australia outlined its ambition to become the food bowl for
Asia in its first draft National Food Plan last week.
BUYING UP THE FARM?
World food demand is expected to rise 77 percent by 2050,
and will double in Asia, the destination for 40 percent of
Australia's food exports, the plan said.
Last year, Australia and China set up a joint study on how
to attract Chinese investment into under-developed regions.
Commerce Minister Chen Deming is overseeing China's side of the
study, which is likely to be finalised later this year.
Any deals with Chinese firms, however, would need to
overcome political concerns about Chinese ownership of farmland,
and may have to win Foreign Investment Review Board (FIRB)
Opposition leader Tony Abbott raised the issue in Beijing
earlier this week, airing concerns about investment from
"It would rarely be in Australia's interests to allow a
foreign government or its agencies to control an Australian
business," Abbott said.
About 11 percent of Australian agricultural land was owned
by foreign investors at the end of 2010, government data shows,
and just A$17 million of investment from China and Hong Kong was
approved by FIRB in the year to June 30, 2011.
Far from "buying up the family farm", the amount of
foreign-owned farmland in Australia had grown only marginally
since the 1980s, Trade Minister Craig Emerson told a conference
in Sydney last week.
"If we start putting the walls up and we get big-headed and
think that Australia is the only place that China has to invest,
that would be disastrous," Emerson said.
($1 = 0.9739 Australian dollars)
(Additional reporting by James Grubel in Canberra, Jane Wardell
in Sydney and Lucy Hornby in Beijing; Editing by Nick Macfie)