Industry funds eye agriculture investment

15 June 2017
| By Mike |
image
image
expand image

Australia’s industry superannuation funds have turned their attention to agricultural investment, releasing a discussion paper which suggests that with the right incentives they would be prepared to direct funding to the area.

Industry Super Australia (ISA) has released the discussion paper authored by ISA chief economist, Dr Stephen Anthony who said it represented a response to calls for the superannuation sector to invest in local agriculture and, in doing so, support regional development.

However, the ISA discussion paper is urging change on the part of Government including around infrastructure, regulation, trade policy, and foreign investment rules.

Anthony said the groundwork needed to be laid before such investment could occur because institutional players had not always fared well in Australian agriculture.

“Past failures, poorly executed or short sighted, usually revealed on closer examination mitigating factors, if not a silver lining,” said Anthony. “With scale and the right settings, the fundamentals of relatively stable returns, capital appreciation from rising land values and renewable income cash flows are very attractive.”

The ISA economist said that, into the future, Australia was capable of positioning itself as the food bowl for Asia’s burgeoning middle class and that Australian superannuation funds were in a position to help take agriculture to the next level in global competitiveness.

“But to start, the funds will need reliable, independent data; agriculture-specific expertise; and revised national policy settings,” he said.

Anthony’s paper pointed to the fact that global investors were already rapidly accumulating strategic stakes in local agricultural holdings with Canadian and US funds investing over $1 billion in Australia since 2007 

“Australia is receiving ready-access to foreign capital and expertise; but our agricultural industry is being ‘cherry picked’ with quality assets falling into the hands of external investors,” he said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

11 months ago
Kevin Gorman

Super director remuneration ...

11 months 1 week ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

11 months 1 week ago

Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Co...

1 day 8 hours ago

Demand from institutional investors was the main driver of growth in Australia’s responsible investment (RI) market in 2023, as the industry continued to gain momentum....

1 day 8 hours ago

In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges....

1 day 9 hours ago