Cynthia Dearin is Managing Director of Dearin & Associates, a consulting firm focused on investment and cultural ties with the Middle East and North Africa.

In the last five years the world has witnessed two major spikes in food prices, one in 2007-2008 and another in 2011. In October 2012, the Food and Agriculture Organization (FAO) reported a staggering 250% increase in the cereal price index from its 2002-2004 baseline.

This rapid escalation in the cost of food has had serious implications for many countries, particularly in the Middle East and North Africa (MENA) region, where imported food provides more than 50% of the population's caloric needs every year. As it grapples with the consequences of rapid modernisation, the MENA region is facing increased birthrates, rapidly expanding populations, and urban bias among policy makers leading to rural neglect and rural-urban migration.

Agricultural development has largely been neglected in the modernisation process, resulting in serious lags between national demands for food and the availability of domestic food sources. The region's heavy reliance on imported food has left it vulnerable to external price shocks.

Concern about the availability of food at affordable prices is one of the most salient features of the economic, social and political landscape across the region and there is evidence that food price increases have contributed to political unrest. This point was clearly illustrated by the dramatic events of the Arab Spring, the effects of which continue to be felt, particularly in countries like Egypt, but also in the resource-rich Gulf states.

As MENA states seek to ensure a safe, stable, affordable, food supply for their populations, some including the UAE and Qatar have looked abroad to develop a diversified production base in order to guarantee continuity of supply for customers back home. They have identified Australia as a country that can provide a solution, because we are known as a reliable producer of safe, 'green', high quality food, and regarded as a desirable destination for food security investment.

Consequently, recent years have seen significant investment in agricultural land across the country, including the well-reported acquisitions by Hassad Food (established by the Qatar Investment Authority), which owns 11 farms and a quarter of a million hectares.

Although foreign investment in agricultural land has traditionally been a significant force in the development of Australia's economy and industry bodies including the National Farmers' Federation (NFF) publicly support it, land acquisition by foreign investors, particularly those from the Middle East, has raised concern in some sectors of the Australian community.

Most of the anxiety appears to centre on foreign state-owned entities such as sovereign wealth funds buying up rural properties, though foreign investment has not been restricted to foreign state-owned entities and the range of buyers has included pension and other funds, private individuals and families and investment consortia.

Consequently, there have been calls from several quarters to reform Australia's regulation of foreign investment in the agricultural sector, on the premise that Australia should be 'selling the food and not the farm'. Given the existing heavy (but largely unremarked) presence of foreign interests in Australia's agribusiness sector, the anxiety over these new acquisitions is intriguing. To illustrate this point, let me give several examples.

The dairy sector has seen significant foreign investment since its deregulation in 2000. The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) estimates that about 50% of the milk processed in Australia is now processed by foreign owned firms. Japanese-owned Lion and New Zealand-owned Fonterra process about 45% of Australian milk, while French-owned Parmalat processes another 5%.

In the meat industry, major foreign owners include JBS (Brazil) and Nippon Meat Packers, and ABARES estimates that foreign-owned companies process over 40% of all Australia's red meat production. A similar picture emerges in the sugar industry. A Belgian firm, Finasucre, owns Bundaberg Sugar, Sucrogen (formerly CSR) is owned by the Malaysian firm Wilmar, and COFCO, a Chinese government corporation, owns Tully sugar. It is estimated that more than 60% of Australian sugar is now processed by foreign-owned companies.

The grains industry has also been the subject of significant investment by foreign companies, the most recent, high-profile example being the takeover of Graincorp by US firm Archer Daniels Midlands (ADM). The deal, which has been cleared by the Australian Competition and Consumer Commission but still requires the approval of the Foreign Investment Review Board, will be the largest acquisition ADM has undertaken in its 110-year history. ADM subsidiary Toepfer already runs grain-growing operations in Victoria, New South Wales and Queensland.

As far as land ownership is concerned, Australia's largest landholder, the iconic Australian Agricultural Company (AA Co), which owns 7.2 million hectares (approximately) or 1.1% of Australia and runs almost 500,000 cattle (2% of the total beef herd), is reportedly 60% owned by UK, US and Malaysian investors.

The clear picture that emerges from even this cursory analysis is of an agribusiness sector heavily influenced by foreign-owned entities. Yet this is rarely reported in the media or made the subject of public debate (though Graincorp's acquisition is a notable exception). Recent acquisitions by MENA investors, however, have caused something of a furore, though the grounds on which critics object to the acquisitions often appear to have little basis in fact. That's the subject of my next post.

Photo by Flickr user prashantsinghpawar.