AUSTRALIA'S foreign investment policy is among the slackest in the developed world.

China, Japan, Brazil and India all prohibit or restrict foreign ownership in agriculture.

And most other nations require notification of foreign sales, to monitor them.

This week, Western Australia's largest dairy farm, Ravenhill, was reportedly sold to a Chinese firm.

Rumours abound that Chinese investors are buying up dairy properties across Victoria and have plans to set up on-farm UHT processing plants.

And China's largest ultra-fine wool processor yesterday said it would develop a sheep flock on the Geelong-district property Larundel, bought last year for about $14 million.

Last week, the Federal Government released a report into foreign ownership here - and ruled out any policy changes.

Foreign investment in Australia is not tracked and approval is not needed for land purchases under $231 million.

Assistant Treasurer Mark Arbib said in releasing the report, the current foreign ownership levels of agricultural land and businesses were comparable with the levels of 1984.

The Weekly Times has reported more than $12 billion in Australian farm land and agribusiness was snapped up by overseas investors during the 12 months from November 2010 to November last year.

Last week it was reported that Chinese investors were eyeing off more than 100,000ha or $500 million of Australian farm land for a range of commodities.

Liberal Senator Bill Heffernan said Australia's foreign ownership policy stood in stark contrast to that of other countries and the Government's decision to leave Australia's policy unchanged was "ridiculous".

"We are one of the slackest countries with reporting and regulating foreign investment on the planet," Senator Heffernan said.

"We now have a reputation for it among the companies who make a living out of advising foreign investors where to invest.

"Those corporates will tell you it is (among) the advisers, who get a commission for bringing the money in, that we are seen as a soft entry point."

A 2008 US Government Accountability Office report on foreign investment analyses the foreign investment laws and policies of 10 countries and notes that most countries have strict, formal review processes.

Eight of the 10 countries analysed had formal foreign investment policies which reviewed potential purchases and almost all countries required notification of foreign investment, even if it didn't trigger a review.

In China, the Government must provide approval for any foreign transaction if it affects national economic security, involves a major industry or resulted in the transfer of famous trademarks or traditional Chinese brands.

In France, approval was required before investment could be made in "sensitive sectors" and failure to apply for approval was a criminal offence. Failure to notify the German Government of foreign investment was also seen as a criminal offence.

Meanwhile, foreign investment in some sectors, including certain types of agriculture, is prohibited in India and heavily restricted in Brazil.

The ABARES report references a study by the The Organisation for Economic Co-operation and Development, which found Australia was the 10th most restrictive for foreign direct investment out of the 34 OECD member countries.

But the study did not take into account the differing economies and values placed on sectors.