Thursday, 18 April 2013

Farmer groups fan agriculture bad rep, says Tim Hornibrook

Tim Hornibrook, the joint chief executive of Macquarie Agricultural Funds Management, said most institutional investment in agriculture was coming from foreign investors who took a different view of the local industry from that taken by Australian farmers and their interest groups.

But Mr Hornibrook said there was also a lot of misinformation about foreign investment in Australia.

He said the collapse of the managed investment schemes in the wake of the global financial crisis and the recent decision to privatise listed farm and water rights investor PrimeAg had not helped perceptions of the industry.

"The real issues is that we have done such a poor job as an industry in promoting ourselves to sources of capital," he said."Ours is an industry that has almost as many representative bodies as it has farmers and many of them choose to promote the views of their members in a very negative way.

"When you talk to institutional investors in Australia about th merits of investing into agriculture, their response is that you are the same people that have been telling us for so long what a terrible sector it is.

"It is hard to argue with them."

Mr Hornibrook said that of the $1 trillion in funds available from the superannuation industry (excluding self-managed super funds), between $10 billion and $15bn should be finding its way into agriculture based on its contribution to the economy.

Yet of the 350 major super funds, just 10 had made investments in agriculture.

"So until such time as institutions in Australia change their view about agriculture, our source of capital is going to be from offshore and the competition for capital offshore is immense," Mr Hornibrook said.

"Pension funds (offshore) views are not clouded by our own negative perceptions but focused in which sector to invest in and which country.

"Australia has a stable political system, export-focused industry and productivity measures up well as far as these investors are concerned.

"These are the investors that we should be attracting - they are long-term investors, highly regulated.

"Rather than taking a xenophobic approach to foreign investment in this sector, we should try to understand who these institutions are and why they want to invest into this sector and particularly into Australia."
Original Article Here

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