The discussion paper, if implemented, would see the creation of a national foreign-owned land register, and a reduction in the threshold from $244 million to $15m for Foreign Investment Review Board examination of foreign purchases of farming land.
"Currently the Federal Government could not tell us which state-owned companies own which sections of our land, or how much land they own, so I welcome the proposal for a land register which will take the guess work out of land ownership discussions," Mr Tehan said.
"I am also very pleased to hear of the proposal to expand the FIRB to ensure that one member of the Board actually has agricultural expertise."
Further proposals would see the creation of a register for foreign owned businesses, and FIRB review of foreign acquisition or part-acquistions of agribusiness valued at more than $53 million.
Mr Tehan said the proposed reform ideas would bring the investment regime for the family farm more in line with the rules around residential real estate, where all proposed foreign purchases are reviewed.
"Why shouldn't country communities be treated in exactly the same way as urban Australians?" he said.
"We don't want to scare the horses, but we want to make sure Australians and [their] government know what is occurring in their own country."
Mr Tehan, who campaigned heavily for the current Senate Inquiry into FIRB and the foreign investment regime, said the success of the proposals, which he hoped would be similar to the Coalition's final election policy, would be judged on transparency.
Of the 10,336 foreign investment applications (in all sectors) decided by FIRB in 2010-11, 99.59 per cent were approved.
An Australian Bureau of Statistics survey completed by about 11,000 agricultural businesses late last year estimated the level of foreign ownership of land was 11.3pc, similar to the results of a 1983-84 survey.
Nationals leader Warren Truss told the ABC on the weekend the survey was "patently flawed".
Ararat farmer Charlie de Fegley said he did not think farming foreign investment was hurting local communities.
Mr de Fegley, who runs a property about two kilometres from land purchased by the Qatar-owned Hassad Foods, said the local foreign investment had been a positive influence.
"The property they bought required quite a capital injection, and they've got the ability to do that," he said.
Victorian Farmers Federation president Peter Tuohey applauded the proposals, which he said closely reflected the policy decided by VFF members in April.
"While [the $15 million threshold] isn't as low as the $5 million mark VFF members have been calling for, it's still a step in the right direction," Mr Tuohey said.
The Federal Government recently announced its support for a foreign-owned land register.
Currently only Queensland has an equivalent register, with that record showing US, UK and European investors own most of the State's foreign-owned land.
Public submissions on the Coalition's discussion paper close on October 31.