WIDE OPEN SPACES U.S. RANCHERS HEAD FOR AUSTRALIA’S FAR NORTH

Press, Volume CVI, Issue 31167, 17 September 1966, Page 14

WIDE OPEN SPACES U.S. RANCHERS HEAD FOR AUSTRALIA’S FAR NORTH

(By the Melbourne correspondent of the “Financial Times ’> (Reprinted from the “Financial Timet” by arrangement >

American ranchers moving into Australia’s far northern cattle country have given a new focus to the controversy over ownership of the nation’s resources. In recent months 10 million acres of pastoral country in Cape York, the extreme northerly tip of the continent, have come under the control of American syndicates headed by millionaire oil men, ranchers and packers.

American interest in northern cattle stations gathered pace in the early 1960 s with the acquisition of several huge properties by International Packers of Chicago, in association with King Ranch of Texas. Estimates of the area owned or controlled by American interests approach 20 million acres in Queensland alone, and total probably 35 million acres when Northern Territory holdings are included.

Enormous Potential

Individual Americans have given a variety of reasons for their new interest in Australia. “I want to get back to the big frontier country; they are closing in on me,” one Arizona cattle man explained. But there is more than a sentimental desire for the open spaces behind the move westwards across the Pacific. The Americans have shrewdly assessed the enormous potential capacity of the backward northern pastoral country, available on 30-year to 50-year leaseholds at rentals that seem insignificant in relation to high-priced land in the United States. The American invasion coincides with the beginning of a pastoral revolution in the tropical north, where scientists have forecast fivefold to tenfold increases in carrying capacity with the introduction of new grazing techniques. With their experience and large capital resources to invest in bores, fencing and pasture improvement, the Americans are expected to give a new impetus to the forces of change.

American investment, andl

! new legumes recently [developed, should raise cattle i numbers in the peninsula I from 100,000 to 5 million head, according to Senator Malcolm Scott chairman of the Government parties’ national development committee. The pace and scope of the development programmes in hand suggest his forecast may well prove right.: More Work Done Every American who has bought holdings recently ini Cape York has done more i development work in six i j months than has been 1 achieved on these properties in their long previous history, according to Sir William Gunn, leading cattleman, Wool Board chairman, and Reserve Bank Board member, who introduced most of the Americans to the far north. It is, in fact, the heavy demands for development capital and the long wait for returns that have deterred many Australians from: exploiting the new oppor-; tunities in the north. Ameri-| cans have said they intend | to reinvest all their profits ; lin improvements. This is the ‘need of the north where beef production has risen far less over the past 20 years than in Australia as a whole. Some American cattle leaders believe the flow of money into Australian pastoral land will grow as political instability discourages further investment on its present! scale in South America.

The initiative in pastoral investment is far from being monopolised by the Americans. The British, with their long association with Australian land development, hold an easy lead among overseas rural investors, and large acquisitions in recent years by powerful wool broking houses indicate the impetus has not been lost. Australian Groups Australians, too, have been active in taking up northern holdings, both as individual farmers and as large corporate groups such as the Hooker group and the newly-formed Stanbroke Pastoral Holdings, headed by the leading life office, the Australian Mutual Provident Society, with Thomas Borthwick of Britain as one of its partners. In the scrub country of eastern central Queensland, Australian cattlemen are developing the largest single rural project in Australia, extending over 11 million acres. The initial difficulties of many of these farmers in financing their projects, however, illustrates the fact that development in much of the outback cattle country is a task for powerful corporations with strong resources to withstand

ithe strains of drought and

other adversities. Yet it is the denomination of the big companies with the inevitable frequency of absentee holders which has brought much of the criticism of overseas investment in the north. The criticism is coming not from Australian cattlemen’s leaders, who have in fact welcomed the new wave of American investment. Broadly 'the criticism is political in origin with its main focus in the Labour Party. ! Strangely the Federal Country Party leadership ■which has persistently warned Australians of the dangers of foreign ownership in the manufacturing and mining industries, has been quiet concerning the growing foreign interest in rural land. In relation to total Australian farmlands, the overseascontrolled areas are small, but the concentration on the promising northern beef country. and the increasing foreign hold on meatworks throughout Australia may yet attract more widespread political 'attention. There has been some rethinking lately about ioverseas land settlement schemes in Western Australia by the governing Liberal and Country coalition parties. The parties have recommended the Government to withdraw research rights over more than half of a 4} million acre area of mostly desolate land along the south coast, from a group of American, British. French and Australian investors. Apart from the purely poli-

tical aspects of the criticism of overseas control in the beef industry, there is an arguable case that it is on the foreigncontrolled absentee stations that erosion, denudation of native' plants and general deterioration of the country has reached it greatest magnitude. Reforms Advocated

Believing that foreign ownership has led to neglect and mismanagement. the Deputy Leader of the Labour Party. Mr Gough Whitlam, recently advocated two main reforms. He proposed greater Commonwealth control of capital inflow and a review by the State of the leases of foreign investors, who. he said, were interested only in making quick capital gains. Regardless of what political action may be taken, there is greater incentive today for cattle men to achieve a better performance than in the past. The rapidly growing market for manufacturing beef has given the northern graziers an assured outlet for their produce and the new road networks are ending their isolation. These are pointers to the increased investment and better management that are needed in the north.