Australian super funds leave agriculture sector to the foreigners

Australia's superannuation funds typically invest just 0.3% in agricultural investments, according to a survey of 114 superannuation funds.

The sector is, however, increasingly attracting foreign pension fund investments in farmland and farming businesses.

The survey results, commissioned by accounting group BDO and conducted by the University of Queensland Business School's commercial arm UniQuest, came after Federal Agriculture Minister Barnaby Joyce accused Australian superannuation and investment funds of failing to understand the agricultural sector.

"With attracting investment from super funds, I find some of the biggest arguments is trying to get the asset managers to understand the fundamentals of agriculture," Joyce told The Australian's Global Food Forum.

"They seem to understand how to wear RM Williams boots and they like photos of horses, but the understanding of what agriculture can actually do is probably not as precise as it should be."

However, the super funds have hit back, the Australian Financial Review noted as the Association of Superannuation Funds of Australia's chief executive Pauline Vamos saying agriculture had a difficult investment history.

"Australian super funds are very well aware of the difficult history of some agricultural vehicles, particularly under managed investment schemes," Vamos said.

"The highly unpredictable nature of returns in this sector has not necessarily aligned well with the goals of super funds which are looking for less volatile income streams. However, these investments may suit sovereign wealth funds whose goals are better aligned."