Australia yesterday approved the purchase by a Chinese-led consortium of a giant cotton farm, a decision certain to inflame the political debate over foreign ownership of farmland.
Australian Treasurer Wayne Swan approved the sale, for an undisclosed price, but set several conditions, including forcing the Chinese textile firm leading the purchase, Shandong Ruyi (山東如意), to sell down its stake in the Cubbie Station property to 51 percent from 80 percent within three years.
Swan also said Ruyi’s Australian partners, the family-owned Lempriere Pty Ltd, would be responsible for operating the Cubbie Group, including the marketing and sale of its cotton, which must be sold in line with international market practices.
Cubbie Station covers about 1,000km2 of southwestern Queens-land and has been in administration for three years after racking up more than US$300 million in debt during a prolonged drought.
Cubbie can grow up to 330,000 bales of cotton in a good year, as well as some wheat, barley, sorghum and corn. The station has entitlements to a massive 537,000 megaliters of water, or enough to fill Sydney Harbour.
The water allocations have raised political concerns that the sale to a foreign investor could undermine Australia’s chances of reforming water policy, and the sale has drawn anger from lawmakers who wanted the government to block the deal.
Ahead of the announcement, independent lawmaker Nick Xenophon called on Swan to block the Cubbie sale to protect the water flows into the Murray-Darling river system, which flows through Australia’s food bowl states.
“These important environmental assets shouldn’t be flogged off to a foreign company that has no connection to Australia, and no obligation to act in our interests,” Xenophon said.
However, Swan said the sale of Cubbie would not have an impact on water management.