ARCHER Daniels Midland (ADM) must be re-evaluating the success of its recent charm offensive.
An independent poll conducted for Fairfax Agricultural Media showed growers have what many would deem a healthy distrust in the US company seeking to take control of GrainCorp, and with it a near monopoly position on eastern grain port facilities.
The poll of 356 growers indicates most growers want the sale either blocked or allowed only to proceed with strict conditions on port access and market disclosure.
Few believe the company has a track record it can trust and fewer still are buying their promises it will pump big dollars into capital upgrades.
It suggests one of two things. Either ADM’s charm offensive tour has failed dismally or that it was working to boost trust from an even lower level than it could have imagined.
ADM will likely argue the results are based on only a small number of growers.
That’s true – it’s representative of about 1.6 per cent of grain players in the eastern States.
But that’s a big enough sample size to give the survey a confidence level of +/-5.2pc.
Based on that, ADM could argue as many as 10pc of growers believe the deal will be good for their farm or that as many as 18pc believe it’s likely it will come good on its spending promises – neither of which are ringing endorsements.
Equally, the results could be much worse.
Of course for ADM, grower approval isn’t a deal breaker.
Best estimates suggest grower shareholders account for just 10 per cent of GrainCorp shares so ADM’s not relying on grower approval to get it over the line.
Nor is grower approval essential for regulatory approval – the major hurdle still standing in the way of the $3.4 billion deal – even if many growers wish it was.
But if the Foreign Investment Review Board isn’t at least listening with interest to grower concerns about the deal as it weighs up whether it meets its national interest test, you’d question why – especially in the wake of Senate committee grillings which have left many wondering just how effective the Australian Competition and Consumer Commission’s own assessment of the deal was.
With an election in the wings, many growers will be watching closely to see how all parties weigh in on the prospective sale of Australia’s biggest listed agribusiness – and whether the party in power at the time of the decision lifts a finger to stop it.