It found one per cent of Australia’s 135,648 agricultural businesses are wholly or partly foreign owned.

The report released on Wednesday also found 11.3 per cent of agricultural land – or 44 million hectares – was in foreign hands or by held by companies that had foreign investors.

The Northern Territory accounted for the largest proportion, with foreign investment in 23.5 per cent of its agricultural land.

The report also shows about 91 per cent of water entitlements for agriculture are Australian-owned.

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) report was commissioned by the federal government in 2010 following community concerns about foreign ownership of agricultural land and food production.

Assistant Treasurer Mark Arbib said on Wednesday foreign ownership levels as revealed by the report were similar to those in 1983-84.

“The current strong regulatory framework surrounding foreign investment in agriculture protects the national interest,” he said in a statement.

“Current policy settings are providing a considerable level of scrutiny of foreign investment proposals and operations of foreign-owned agribusinesses in Australia.”

Senator Arbib said putting more barriers in the way of foreign investors, or reductions in the flow of foreign capital into Australian agriculture, “would adversely affect the performance of the agricultural sector”.

The report said there was a real chance lower levels of foreign investment would lead to lower food production and higher food prices.

Agriculture Minister Simon Crean said the report confirmed foreign investment would continue to play an important part in the diversification of the food processing and agriculture value-adding industries.

“As new markets emerge in Asia, Australia is well positioned to play to its strengths and take advantage of the opportunities,” he said.

Approvals for foreign investment totalled $140 billion in 2009/10.