Debt locks up major grain grower
WA's biggest grain grower John Nicoletti is $40 million in debt and cannot get finance to plant this year's crop as he joins the scores of farmers in the Wheatbelt at breaking point.
Colin Barnett will meet Mr Nicoletti and other farmers tomorrow when the Premier visits towns and shires in the region to gauge the despair among local communities.
They will meet at Moorine Rock Tennis Club in the eastern Wheatbelt near vacant farms where no crops will be planted this year.
Mr Nicoletti, who owns or leases more than 142,000ha across eight farms, said he could not buy fertiliser as he prepared for seeding.
His bank has threatened to cut off credit from tomorrow unless Mr Nicoletti agrees to put up his family's unrelated small business interests in towns throughout the Wheatbelt as security.
Mr Nicoletti said he had been backed into a corner and left with little choice but to agree to the bank's demands.
He is paying 9 per cent interest on his debt, which has exploded after a run of terrible harvests and falling land prices eroded his equity.
Speaking from his office in Merredin, the larger than life character who started his farming empire with a $200 loan said: "Unless I sign, she's all over, I am finished as of Friday. I feel terrible but all I can do is sign and hope."
Mr Nicoletti said it would cost him about $13 million to plant up to 60,000ha this year. He has already committed about a third of his expected crop in forward sales.
Many in the farming community had hoped Mr Nicoletti fell into a "too big to fail" category for the banks. It is feared a forced sale of his farms on an already flooded market would cause a dramatic fall in equity levels in the Wheatbelt.
The 59-year-old said he was more worried about other farmers than himself.
"If I was to go bust, what signal does that send to everyone else? I know farmers who are already selling any assets they have left to put in a crop this year. If my farms hit the market in one go, it would be an absolute catastrophe," he said.
One of his farms, Daisy Downs near Mullewa, has been on the market since February. Mr Nicoletti said there had been interest from Chinese buyers.
Sales of new farm machinery through his six John Deere dealerships in the Wheatbelt have come to a virtual standstill.
Mr Barnett will spend two days meeting farmers, businesses owners and grower groups in areas from Koorda through to Merredin and Kellerberrin. New Agriculture Minister Ken Baston will focus on Wheatbelt shires and towns further south in a similar crisis tour.
Mr Barnett said the visits would give them a first-hand understanding of the issues facing the hardest-hit communities.
The visits come as the Muntadgin Farming Alliance gathers support for a crisis meeting in Merredin on April 15.
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