Allens has released today a report examining the views of foreign and domestic investors looking to invest in the Australian agri business sector. Joining me to discuss the report is Allens Partner Marcus Clark, Marcus thanks for your time.
Good to be with you
So Marcus firstly can you tell me about the report?
Sure the purpose of the report is really in the response to the Australian Government’s initiative of developing a White Paper on agricultural competitiveness and the key thing we wanted to do through this report was give voice to the investment community in terms of its interests in Australian agriculture and understanding how the government can respond to that interest.
And Marcus what did the report find about how investors view the Australian agri business sector?
Sure we surveyed 75 senior professionals in organisations ranging from sovereign wealth funds, hedge funds, private equity, more traditional corporate investors, and what we found was an overwhelming 99% of respondents were interested in investing in Australian agriculture and the interest was quite diverse, there was clearly a focus on our three principle agricultural commodities, crops, meat and dairy, but the interest was all the way from farm to plate as people say in terms of going from farm production intermediate areas of that chain of production right up to the consumer.
And Marcus what were some of the major findings of the report?
So we had a couple of areas that we particularly focussed on. One of the major findings was there was keen interest in maintaining the viability of Australian family farms, people saw family farms as offering the ability to leverage local knowledge, they offered the ability to maintain strong communities and they saw investment, particularly passive investment as overcoming some of the problems that family farms have had in Australia such as succession planning, lack of governance and over reliance on debt to fund expansion, so that was one area. The other area we looked at where do people see the government playing the most important role in terms of infrastructure and finally we wanted to understand people’s reaction to the regulation of foreign investment in the sector.
Now Marcus what do you see as some of the measures that can be taken to ensure the agri business sector is an attractive investment destination?
I think on the family farm issue we need to come up with tax policies that allow flexibility in how joint ventures can be formed between investors and farm operators. Stamp duty at the moment is a particularly penurious tax that discourages the formation of joint ventures. In terms of infrastructure the overwhelming focus was interestingly enough on R&D many of our investors through that built infrastructure in Australia was actually quite good in the sector and was one of the advantages of investing in Australia, people saw the role of government as being one to focus on R&D and some of the sort of the statements from some of our respondents particularly focussed on the ability of introducing national systems of traceability in relation to agricultural products.
And just finally Marcus how can listeners get a copy of the report?
It certainly sounds like there were a number of interesting findings in the report so Marcus thanks so much for joining us and running us through some of them.
Pleasure it’s well worth reading.
That was Marcus Clark a Partner in the M&A team at Allens. Now listeners if you have any questions for Marcus you can send them through either using the panel on your screen or via email to firstname.lastname@example.org.