US GrainCorp offer divides groups

Jo FulwoodCountryman

The offer from US-based food giant Archer Daniels Midlands to buy Eastern States giant GrainCorp has divided agricultural bodies, but the Pastoralists and Graziers Association has no doubt over where it stands.

Treasurer Joe Hockey said last week he would not be bullied into a decision, despite opposition to the sale from Nationals leader Warren Truss, and other National Party members.

PGA Western Graingrowers chairman John Snooke, who is an outspoken supporter of foreign investment into Australia's agricultural sector, believes it's now time to show the rest of the world Australia is open for business.

"The ramifications for WA are real if this (sale) is blocked," he said.

"The signal that the National Party is sending the global investment community is that Australia is not open for business unless it's on our terms."

Mr Snooke said the PGA had given evidence at the Senate inquiry into the sale, supporting the ADM bit for the NSW storage and handling company.

"We are absolutely supportive of the ADM deal. It brings new capital into a dilapidated network, and that new capital will make the GrainCorp network relevant for the Asian centaury," he said.

Mr Snooke said it would also introduce new expertise, with a different perspective.

"ADM specialises in value adding and strong linkages into global markets that the Australian producer needs to access," he said.

But, Mr Snooke said, the debate was a broader issue on foreign investment.

"We need to be facilitating foreign investment in agriculture, we can't isolate ourselves as a country and then expect to have trading partners all over the world," he said.

WAFarmers Grains President Kim Simpson said it was his understanding that most farming organisation in the Eastern States were opposed to the sale, which he believed represented grower opinion on the issue.

"While we don't necessarily oppose foreign investment, the Australian farmer must be the beneficiary of any foreign investment deal," he said.

Newly elected Nationals MP for the Victorian seat of Mallee, Andrew Broad, who held the position of Victorian Farmers Federation president before his election to Federal Parliament, is also critical of the ADM offer.

The federal seat of Mallee takes in much of the western Victorian grain belt.

Mr Broad believes Australian farmers will be the big losers in the $3.4 billion offer for the East Coast-based storage and handling company.

He said while GrainCorp had allocated $250 million for infrastructure upgrades in its forward projections, the ADM deal only included an extra $50 million for forward spending in this area.

"All they are offering to spend is an additional $50 million. $50 million goes nowhere, it might replace a few bunker elevators and a bit of tarp," he said.

Mr Broad said while he was not opposed to foreign investment, there needed be a greater long-term benefit to the Australian farmer before he would support the sale of GrainCorp to a foreign investor.

"If they're serious about this deal - where is the forward prospectus, showing the improvements that we will see for the grower?" he said.

"Where is the business case demonstrating the throughput to the port? Where is the information on how we are going to access better markets?"

Mr Broad warned the ADM take- over could see a rationalisation of storage sites, and an increase cost burden in transporting the grain using roads rather than rail.

He said there had been too many examples of foreign investment into Australian owned companies that had gone wrong for the Australian taxpayer.

"You've just got to look at Ford over here in Victoria," Mr Broad said.

"The government has been throwing huge dollars into that company and now it's being shut down."

The Treasurer is expected to make a final decision on the sale by December 17 after the release of a recommendation by the Foreign Investment Review Board.


Grain businesses *: Archer Daniels Midlands looking at Eastern States giant Graincorp; Cargill recently bought Joe White Malting plant at Forrestfield

Cattle stations *: Overseas interest but no confirmed sales in WA this year

Beef enterprises *: Harvey Beef owned by overseas investment fund and now in sights of Japan's S Foods

Farming enterprises *: Beidahuang (Chinese state-owned entity) owns and leases 80,000ha in Wheatbelt and port infrastructure at Albany

Fertilisers *: Louis Dreyfus finalising purchase of Ravensdown's WA assets, including storage and port facilities at Kwinana

Grain handling *: European agribusiness firm Bunge building storage and loading infrastructure at Bunbury

Dairy farms *: Undisclosed Chinese purchases of WA farms

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