Australia approves China-led purchase of giant cotton farm
By James Grubel ,Reuters
September 1, 2012, 12:04 am TWN
CANBERRA -- Australia on Friday 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.
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, 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 almost 1,000 sq km (390 sq miles) of southwestern Queensland 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.