CHINA would invest billions of dollars to transform vast tracts of undeveloped land in northern Australia for farming, under a plan confirmed yesterday by the federal government.

But opponents said an ''Asia food bowl'' would come at the expense of giving Australians access to affordable, good-quality food.

Trade and Competitiveness Minister Craig Emerson confirmed that the government was undertaking a joint study with Beijing to examine the policy changes needed for a massive investment by Chinese agricultural interests.

Dr Emerson has denied that this means there are plans to ''buy up the farm'' and use imported labour to produce food for the voracious Chinese market, with its 1.3 billion citizens. ''It is designed to lift Australian food production for world markets,'' he said.

The revelation, in advance of an official report expected midyear, has caused some consternation in Canberra, where foreign ownership of Australian farmland is a hot-button issue.