There are renewed calls for tighter limits on foreign investment in agricultural land, with new figures showing 4.6 million hectares of Australian land is now owned by overseas interests.

Nationals Senator Fiona Nash says the current "national interest" test is not strong enough, warning the consequences of selling prime land will be long-lasting.

"It's about time this country woke-up and had a proper debate about how we want the future of our agricultural land ownership to look in this nation," Senator Nash told reporters in Canberra.

"We are at risk of losing control of our agricultural productivity if we don't properly understand... how much foreign ownership we have of agricultural land in this nation, but then secondly to determine what is an appropriate level of foreign ownership."

According to a report by researchers at the Politecnico di Milan in Italy and the University of Virginia in the United States, almost 10 per cent of Australia's cultivated land is now foreign-owned.

That equates to 0.6 per cent of the total land mass of Australia.

The report shows that Australia is now among the top 10 countries when it comes to foreign ownership of agricultural land, based on the area of land involved.

"We're not up there with Congo and the Philippines and Indonesia, but we're getting up there," Nationals Senator Barnaby Joyce said.

The research shows that interests in China, Israel, the US, the United Kingdom and United Arab Emirates are among the biggest known purchasers of foreign land globally.

'Redefining sovereignty'

According to media reports today, a state-owned Chinese company is looking to buy wineries in South Australia's iconic Barossa Valley, to export the wine to the growing Chinese market.

Any purchase by the Chinese Cereals, Oil and Foodstuffs Corporation (COFCO) would require the approval of the Foreign Investment Review Board (FIRB) because the company is state-owned.

But Liberal Senator Bill Heffernan, who is currently chairing a parliamentary inquiry into the issue, is concerned the current national interest test is out of date.

"The Foreign Investment Review Board with the new chairman needs to redefine what are the rules and regulations about foreign investment," he said.

"We are actually redefining sovereignty, we're losing our revenue base, we are distorting the capital market, and we will distort the commodity market."

Investor loopholes

An interim report handed down by the parliamentary committee recommended the Government review the tax arrangements that apply to foreign ownership, with a view to closing potential loopholes that are not available to domestic investors.

Senator Nash says she welcomes foreign investment, but there needs to be more thorough scrutiny of the issue.

"There has been not one single rejection of foreign ownership of agricultural land by the FIRB. I believe the national interest test isn't strong enough."

There have been frequent public debates in Australia about an appropriate level of foreign investment, particularly as it relates to agricultural land.

In October last year, Agriculture Minister Joe Ludwig announced the Government would establish a foreign ownership register, to give a more accurate picture of how much land is held by overseas interests. The register is not yet in place.

The former head of Treasury, Ken Henry, last year delivered a strong defence of foreign investment in Australia, saying much of the debate surrounding the issue had been sidetracked by "myths".

"Very little - only a tiny proportion - of Australia's agricultural land is in foreign ownership, and so... concerns about foreign ownership of land - and especially agricultural land - in Australia have, I think, been greatly exaggerated," he said.