Farm deal furore sours Chinese push

Brad ThompsonThe West Australian

A Chinese conglomerate's move to buy and lease WA farms as part of plans to set up a grain supply chain to China has turned sour as debate rages over the merits of foreign investment in agriculture.

Heilongjiang Feng Agricultural is locked in a Supreme Court dispute with a Wheatbelt farmer who alleges it failed to honour a contract to buy his farm for $8 million.

In a David and Goliath battle, Ian Tonkin and his wife Carolyn are taking on the company which is backed by China's biggest agricultural conglomerate, Beidahuang, and ultimately state-owned.

The Tonkins allege HFA signed a contract to buy their farm two years ago but they have not received a cent, despite more than a dozen written requests for payment to the group's legal team in WA.

They are seeking damages and more than $1 million in interest from HFA in addition to payment of the $8 million, according to a writ filed in the Supreme Court.

HFA and Vicstock Grain went on an initial $150 million spending spree which included the purchase of three farms, leasing a string of others and taking over a 16-year lease on land and a storage shed at Albany Port.

The Chinese interests leased the port site in March and said they planned to begin bulk grain exports from Albany to China early next year after a preliminary $10 million upgrade of the shed and a woodchip loader.

Albany Port Authority chief executive Brad Williamson said yesterday no work had started at the site but the port authority remained keen to help the Chinese where possible.

Mr Williamson met HFA director and Vicstock executive Harold Sim this month to discuss the port site. Mr Williamson confirmed the companies were trying to renegotiate the terms of the lease, which includes take or pay conditions.

The legal dispute with the Tonkins comes with the state of crops on the HFA-controlled farms raising eyebrows among local communities.

One experienced grain grower, who did not want to be named, said the crops were in poor condition compared to those on neighbouring properties.

"If this is corporate farming then heaven help us," he said.

"They will be lucky to grow enough grain to feed the chooks."

HFA spent $70.5 million buying farms comprising 36,500ha in areas with good access to Albany Port over six months from October last year.

HFA also leased farms and is understood to have offered supply contracts and concessional funding arrangements to a number of cash-strapped farmers in the region.

The spending spree, which sparked a Foreign Investment Review Board inquiry, began with the $29 million purchase of 23,336ha formerly owned by companies controlled by Dennis Joyce and his sons, which collapsed with debts of about $70 million.

The Tonkin farm adjoins Connemara, one of the former Joyce properties at Lake Varley near Hyden which HFA purchased through receivers.

The key players in the legal dispute - Mr Tonkin, Mr Sim and Mr Sim's lawyer Michael Swift - refused to comment.

Vicstock director Will Crozier, who played a key role in pulling the grain supply project together while battling cancer, could not be contacted yesterday.

There is growing tension in the Federal Government on the issue of foreign investment in agriculture, with new Agriculture Minister and Nationals MP Barnaby Joyce blasting Indonesia's plans to buy cattle country and opposing US company Archer Daniels Midland's bid for GrainCorp.

Treasurer Joe Hockey said in Bali yesterday that any decisions on foreign investment would be made on a case-by-case basis.

"We will have a methodical process for evaluating individual proposals and you can be rest assured that my decision will not be contrary to the national interest," Mr Hockey said.

If this is corporate farming then heaven help us." WA grain grower

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