Category: Dairy

Corporate farming, Dairy, Gina

Gina Rinehart invests in Queensland dairy operation to supply infant formula to China

Gina Rinehart

FTA agreement has definitely been of benefit to this Australian

Australia’s richest person, Gina Rinehart, is looking to invest up to half a billion dollars to produce infant milk formula for China.

The Hope Dairies project plans to establish Australia’s biggest dairy operation, by acquiring 5,000 hectares of farmland in Queensland’s South Burnett and building a processing plant in the nearby Mary Valley.

Hope Dairies is controlled by Ms Reinhart’s Hancock Prospecting Ltd and is a move to diversify beyond her huge mining interests.

Project spokesman Jason Morrison says the plan would see production start in late 2016.

“It’ll be a big thing – not just because it will revitalise the industry but it’ll inject a bit of hope into it as well and an enormous amount of export revenue for Australia.”

The appetite for infant formula in China is forecast to almost double over the next three years following the relaxation of the nation’s one-child policy.

“Australia’s reputation and the Queensland dairy reputation is incredible,” said Mr Morrison.

“And so we have this premium product, we have an avenue to get it there, we’re going to do the complete value adding in Australia.

“It’s processing, it’s canning, it’s exporting, right down to the marketing of it, so it’s a real integrated program and strategy.”

“Gina Rinehart is a firm believer in Australia…and this is a real ‘money where your mouth is’ situation.”

The dairy proposal is in addition to Ms Rinehart’s recent purchase of a 50 percent stake in two Western Australian cattle stations.

Mr Morrison confirmed the company has steadily bought suitable dairy farm land over the past 12 months but would not confirm exact numbers.

“I don’t want people to think it’s just about what we do, we’re going to be buying [milk] from the local industry as well.

“Local dairy farmers will have the ability to sell to us and we’re somewhat reliant on them as well.”

Audio: Gina Rinehart’s plan to develop Australia’s biggest dairy enterprise (ABC Rural)

ABC Rural understands Ms Rinehart and her Chinese business partners will sign a memorandum of understanding with the Queensland Government on Saturday to help facilitate the proposed development.

A spokesman for the Queensland Deputy Premier, Jeff Seeney, said in a statement that the project had the potential to deliver up to 350 construction jobs and over 450 operation jobs.

“Should it become a reality, this dairy enterprise will be a clear example of our government’s determination to work cooperatively with the private sector and local communities to grow Queensland jobs and revitalise the Mary Valley,” the statement said.

The Queensland Dairyfarmers’ Organisation (QDO) has welcomed news of the project, saying it’s the first major investment in the Queensland dairy industry since the late 1990s.

“The investment would restore dairy processing capacity which Queensland has lost over the last decade and a half,” QDO president Brian Tessmann said.

“China presents a real opportunity for our industry to form close partnerships to supply high-quality dairy products to their growing population, and in particular infant formula.

“This opportunity will provide much needed diversification for our Queensland dairy industry.

“We hope it will provide a range of opportunities for our existing Queensland dairy farming families, which have suffered greatly in recent years from natural and man-made disasters, including from the supermarket milk price war and now drought.

“We have lost over 130 farmers since the price war started,” he said.

Mr Tessmann says that Hope Dairies is a real show of confidence in the Queensland industry.

“It is clear that Chinese consumers value our high quality dairy products, which is in stark contrast to Australia, where the major supermarkets are happy to devalue our fresh milk as a discount marketing agent.”

1Bill, Dairy, FIRB

Tony Abbott tries to ease fears over China trade deal after Alan Jones tirade

Tony Abbott and Alan Jones at Randwick racecourse in Sydney in April.

Prime minister defends agreement, saying it means a better deal for Australian agriculture, in combative interview with radio host

Tony Abbott has moved to allay concerns about Australia “selling off the farm” to China as the countries prepare to sign a trade deal in Canberra on Monday.

The prime minister defended the benefits of the agreement to the Australian agricultural sector during a combative radio interview conducted hours before he announced he had finished negotiations with the Chinese president, Xi Jinping.

Abbott met with Xi on Monday morning and said the trade minister, Andrew Robb, and the Chinese commerce minister, Gao Hucheng, would sign a “declaration of intent” undertaking to prepare the legal texts in both languages for signature.

Xi is scheduled to address the federal parliament on Monday afternoon.

The conservative 2GB broadcaster Alan Jones told Abbott he did not have a mandate for the new trade deal and repeatedly raised concerns over the sale of Australian dairy farms to Chinese entities. A Tasmanian investor, Troy Harper, said last month Chinese interests would be among investors in 50 dairy farms in Victoria as part of a deal reported to be worth $400m.

After listing other prospective sales involving China, Jones told Abbott: “By this time next week who’s going to own little Tasmania? The public are very, very angry about this prime minister, I can tell you.”

Abbott said he understood people were “always anxious at what’s often referred to as selling off the farm” but “no one can buy land unless the person who currently owns the land wants to sell”.

“Presumably you only want to sell to an overseas buyer because the overseas buyer is offering you a better price than any Australian. That’s the first point,” Abbott said.

Jones replied: “Of course … but can Tony Abbott go and buy a farm in China? The answer’s no, prime minister … nor can he buy a coal mine, nor can he buy a steel mill.”

Abbott said: “Well, Alan, I’m no expert on land ownership arrangements in China but China is still run by the Communist party. I’m not sure that anyone is that able to own land in China on an individual basis.”

Jones also objected to the proposal to increase the threshold for Foreign Investment Review Board (FIRB) scrutiny of Chinese investments to those worth more than $1.087bn.

This change, allowing a greater level of investment to proceed without FIRB screening, is similar to provisions in Australia’s recently signed deals with South Korea and Japan. In those agreements, the Australian government retained the right to screen proposals for foreign investment in agricultural land worth more than $15m and agribusinesses worth more than $53m.

Abbott said the new high threshold for FIRB screening would not apply to agricultural land in the deal with China. He also reaffirmed his yet-to-be-implemented promise to introduce a public register of farmland ownership.

The prime minister said Australia’s efforts to strike the trade agreement with China had started 10 years ago. Asked why the full text of the deal was not yet public, Abbott said this was because it was “being negotiated”.

“It’s going to be signed but it won’t actually come into force until first of all it’s gone to the parliamentary committee on treaties, been tabled in the parliament, and almost certainly legislation for some aspects of it will have to be passed,” Abbott said.

“There’s a whole lot of due process that will now take place, but I promise you this Alan: This is better for Australian agriculture, it’s at least as good for our agriculture, as New Zealand got about six or seven years ago and their dairy exports to China have gone up from under a half a billion [dollars] to over $3bn.”

The trade minister, Andrew Robb, has said Australia’s agricultural, resources, energy and service industries would benefit from the deal.

The Australian reported the dairy industry would gain similar tariff reductions as contained in the New Zealand agreement, but it will not deliver benefits for sugar, rice, wheat and cotton sectors before a review in three years. That review is also expected to consider changes to Australia’s existing requirement that all investment proposals by Chinese state-owned entities be subject to FIRB scrutiny.

Labor’s trade spokeswoman, Penny Wong, said the government had used “weeks of choreographed leaks” about the contents of the free trade agreement (FTA) and it was time for Abbott to release the full text so Australians could judge the benefits.

“Labor is deeply concerned that key export sectors like sugar have been told to expect nothing from the deal,” she said.

“Mr Abbott has talked about a two-step FTA , the fact is, Australia can’t afford a second-rate FTA with China.”

Wong nominated Labor’s criteria for a good deal, including market access outcomes for Australian farmers and other exporters that were at least as good as the New Zealand deal.

Chinese companies operating in Australia should not be granted superior legal rights to those enjoyed by Australian companies, Wong said, while calling for the retention of migration safeguards to ensure Australians gained the first opportunities for jobs.