Australia will create a national register of foreign ownership of agricultural land, Prime Minister Julia Gillard said on Tuesday, following concerns about the sale of valuable farming assets.
Gillard said Australia welcomed foreign investment but the government also understood the need for more information to foster an informed public debate.
"The register will provide the community with a more comprehensive picture of the specific size and locations of foreign agricultural landholdings over and above what is currently available," she said.
Conservative politicians with rural constituencies have warned against selling valuable farming land to foreign investors, including from China, which is Australia's top trading partner.
But Gillard, in an address to farmers in Canberra, said foreign investment was "not a new thing" for Australia and nor was its extent overwhelming.
"It has helped build Australian agriculture over the last 200 years and it is important for the future as we seek to boost food production and food security," she said.
Eighty-nine percent of farmland was entirely Australian-owned and another six percent majority Australian-owned, a government-commissioned report found earlier this year.
Chinese investment is a sensitive issue in Australia, and the issue reared its head again last month when Canberra allowed the sale of the nation's giant Cubbie cotton station to a consortium led by a Chinese textile company.
Conservative Senator Barnaby Joyce described the Cubbie deal as "a loss of another section of our prime agricultural land to an overseas interest".
Research commissioned by the government and released in January found that foreign firms accounted for about half of the nation's wheat, dairy, sugar and red meat industries, following a flurry of takeovers in recent years.
But the Rural Industries Research and Development Corporation study also showed only 11 percent of farming land was foreign-owned, a level little changed in 30 years, and there was strong government oversight of offshore investment.
"Any measures that put further barriers in the way of foreign investors and reduce the flow of foreign capital into Australian agriculture would adversely affect the performance of the agricultural sector," it said in January.
Australia's agricultural industries export more than Aus$30 billion (US$31 billion) worth of food a year and demand is expected to skyrocket as Asia's middle class booms.