China firm eyes controversial 58-sq-mile Australia farm project

Wed Jul 25, 2012 4:21am EDT
 
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By Maggie Lu YueYang

CANBERRA (Reuters) - A Chinese property conglomerate is bidding for a 58-sq-mile (15,000-hectare) farming project in the Australian outback as Canberra looks to open the remote north for farming to tap booming demand for food from Asia, especially China.

Shanghai Zhongfu Group is bidding for the Ord East Kimberley Expansion project in Western Australia state, with plans to develop agriculture business in the sub-tropical region, but may face opposition from politicians increasingly concerned about foreign investment in Australian farms.

"It's just a good business opportunity for us, as our boss found it might be profitable," Zhongfu's vice president, Larry Yan, told Reuters. "We have engaged local lawyers and experts to work on this."

The Chinese bid for the Kimberley project comes as Australia and China examine plans to allow Chinese investors to unlock Australia's far north for agriculture.

China, the world's most populous country, does not grow enough food to feed its 1.4 billion people, and central planners have long worried that the lack of self-sufficiency leaves the country vulnerable to sharp fluctuations in international prices for soybeans, grains and other edible commodities.

Some Chinese companies have responded by attempting to acquire land overseas to grow crops for export back to China, in some cases sparking local unease over the threat of a Chinese land-grab.

Australia is the driest inhabited continent, but its tropical and sub-tropical northern regions have plenty of water in areas which are largely undeveloped, remote and where there is little infrastructure.

The Kimberley project would open new tracts of farmland to irrigation from the waters of the Ord River and Lake Argyle, which holds enough water to fill 21 Sydney Harbours.   Continued...