The fear of foreign investment is holding the Australian economy back

Nationals leader Warren Truss keeps an eagle eye on Treasurer Joe Hockey ... Source: News Limited

It fell to Treasurer Joe Hockey today to announce the decision to block a $3.4 billion takeover by American food conglomerate Archer Daniels Midland of Australia's largest publicly listed agricultural company, GrainCorp.

But make no mistake, this was a team call.

For the most part, the longstanding coalition between the Liberal and National parties works well to their mutual benefit.

But foreign investment in farming land is the constant thorn in their side.

By legislation, it is the Treasurer who has the ultimate call on all foreign investment decisions.

No doubt Hockey's natural inclination, as a true small "l" liberal, would have been to agree to the investment. He must have either realised himself, or been forcefully told by others, of the damage that would have been done to his fledgling government by the inevitable stoush that would have erupted with the Nationals if he approved the deal. Oh to have been a fly on the wall of that cabinet meeting.

Federal Agriculture minister Barnaby Joyce (those five words alone contain the key to today's decision) has, with obvious glee, taken to twitter to praise the decision.

But while clearly in the governments' political interest, there is scant evidence today's decision is actually in the "national interest", as claimed.

Australia has always been a capital hungry country. We rely on foreign investment to allow us to unlock the potential in our great natural resources of mining and agriculture. Doing so employs many Australians in the process and enables us to grow our living standards.

Hockey alluded to some competition concerns about allowing a foreign company to take over the stranglehold GrainCorp has on Australia's grain handling facilities. Farmers certainly fear a foreign company would be more ruthless about closing facilities and forcing up prices for the distribution of their grain.

But you don't have to be a foreigner to do that. Farmers may yet face facility closures and higher prices thanks to the near monopoly that GrainCorp has on ports and grain handling facilities.

Archer Daniels Midland was in fact offering to invest $200 million more in grains infrastructure as a sweetener to the deal.

If you're going to turn down that kind of money, Australians deserve a better explanation why.

Follow Jessica on Twitter: @Jess_Irvine

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