Less than two months after buying debt-laden cotton farm Cubbie Station, the farm's new Chinese and Japanese owners are exploring interest in selling water back to the federal government, according to The Australian Financial Review.
The $232 million deal sparked much debate about foreign investment in Australia's agriculture sector, in part because of the huge water entitlements within the Murray Darling Basin system.
Australian wool trader Lempriere was in on the deal, along with Chinese-backed CS Agriculture and Japanese trading giant Itochu. Lempriere Capital managing director Tony McKenna spoke publicly on the sale for the first time this week, delivering a harsh rebuke of those who oppose foreign investment in Australia's farm sector.
“We have committed to consider the option of selling any excess entitlements into water buyback schemes,” Mr McKenna said, according to the AFR. “At this stage, seven weeks into our ownership of Cubbie, we are reviewing it. A hydrology study into the impact of the sale of part of Cubbie's water rights has been commissioned.”
Mr McKenna said a “noisy minority” who opposed foreign investment in Australian agriculture had slowed efforts to complete a deal for Cubbie, and alarmed Shandong Ruyi, the Chinese group backing CS Agriculture.
“It took some work explaining to Ruyi that the government was not against them just because a bill was before parliament opposing their purchase of Cubbie,” he said, according to the AFR. “there were times when it looked like it was all too hard. There were times when we were genuinely concerned that [the Foreign Investment Review Board] would not approve the acquisition. Chinese investors are worried about the FIRB process and whether they are welcome in Australia.”