Rea­sons why su­per funds are wary of ag

Warwick Daily News - South West Queensland Rural Weekly - - News - — Natalie Kot­sios

IN­VEST­ING in agri­cul­ture is “not a nat­u­ral move” for Aus­tralian su­per­an­nu­a­tion funds, with gov­ern­ments fail­ing to pro­vide an en­vi­ron­ment in which agribusi­ness can grow.

That’s among the raft of rea­sons su­per­an­nu­a­tion funds have given a fed­eral par­lia­men­tary in­quiry as to why they are not in­vest­ing in lo­cal agri­cul­ture.

Sub­mis­sions to the House of Rep­re­sen­ta­tives agri­cul­ture com­mit­tee in­quiry also say a lack of in­vest­ment is due to farm­ing’s un­pre­dictable na­ture and a need for agribusi­nesses to be­come more com­pet­i­tive glob­ally.

While for­eign pen­sion funds are in­creas­ingly turn­ing their at­ten­tion to Aus­tralian agri­cul­ture, home­grown funds are still re­luc­tant to in­vest much of the $2.6 tril­lion they hold to­wards the es­ti­mated

$600 bil­lion in cap­i­tal the sec­tor needs to boost pro­duc­tion by 2050.

In­dus­try Su­per Aus­tralia – whose funds have in­vested about $1.6 bil­lion in agri­cul­ture-re­lated as­sets – said Aus­tralia lacked a “proper na­tional strate­gic pol­icy” aimed at mak­ing its agribusi­nesses glob­ally com­pet­i­tive.

In­dus­try Su­per Aus­tralia, in its in­quiry sub­mis­sion, said dereg­u­la­tion had un­der­mined do­mes­tic pro­duc­ers’ abil­ity to grow and in­stead let for­eign play­ers dom­i­nate sup­ply chains and value-adding, point­ing to meat pro­ces­sors Teys and JBS and dairy pro­ces­sors Fon­terra and Sa­puto as ex­am­ples.

“The lack of strate­gic fore­sight has re­sulted in lost op­por­tu­ni­ties for Aus­tralian pro­duc­ers and fund man­agers, and ur­gent re­form is needed to shift away from ide­o­log­i­cally driven poli­cies that have con­strained the sec­tor from reach­ing its full po­ten­tial,” ISA wrote.

ISA said Aus­tralia’s farm­ing con­di­tions were gen­er­ally tough and less pre­dictable than other coun­tries, mak­ing in­vest­ments riskier.

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