Senior federal government ministers say any proposal by Indonesia to buy Australian farmland for cattle grazing will be under joint venture arrangements.
The Indonesian government has expressed interest in acquiring a large tranche of pastoral land in northern Australia to breed cattle, but the proposal has worried some within the coalition ranks.
Before being made agriculture minister, Nationals MP Barnaby Joyce suggested such purchases may not be in the national interest but he's since softened his stance.
"These are certainly things that can be closely investigated to see if they're in our national interest," he told ABC Radio on Wednesday.
It comes as Prime Minister Tony Abbott sought to reassure Indonesia that the Foreign Review Investment Board was not designed to "lock up" Australia to prospective investors.
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The coalition government has vowed to introduce a national register of foreign-owned farming land, and to apply a national interest test to all proposals worth $15 million or more, down from a cap of $248 million.
Mr Joyce said he'd be happy to discuss any proposal that would take pressure off farming families in the north who are struggling due to dry conditions.
The government was exploring options around pastoral leases in northern Australia, and the possibility of joint-venture arrangements around land ownership.
"We've talked about joint venture arrangements with the Indonesians, which are a good idea," Mr Joyce said.
Indonesian government officials have said a shortage of suitable domestic grazing land and a growing demand for protein has forced the nation to look abroad for more acreage.
They're believed to be interested in acquiring between one and one and a half million hectares of land in northern Australia's cattle country.
Trade and Investment Minister Andrew Robb said Australia was skilled at breeding cattle, while Indonesia had proved adept at fattening stock.
Both countries could benefit by sharing their expertise, and Indonesia could learn much by working in partnership with the Australian cattle industry, he said.
"They want to see a lot of joint activity," he told Sky News.
"If they get to the point of buying any properties in Australia they should consider the joint venture, because their primary desire is to learn more about the industry."
Mr Robb hosed down fears about foreign land ownership, saying outsiders had been buying Australian farmland "since the year dot".
He said the Indonesian proposal being discussed would involve about 3000 grazing cattle, which was not much considering Australia managed tens of millions head of stock.
"We're not talking big licks of land," he said.
Relations between Australia and Indonesia were soured in 2011 when the then Labor government temporarily suspended live cattle exports due to concerns about the treatment of the animals in Indonesian abattoirs.
Although the ban was lifted months later, Indonesia reduced its annual cattle import quota from 660,000 head to 260,000.
The government hopes Indonesia's agreement to increase its import quota for the December quarter by an extra 53,000 animals could help set trade back on course.
