Timing key for ADM bid

FIRST up: I’m in no way opposed to foreign investment in Australian agriculture.

As many within the industry have noted, we’ve taken the current capital-raising model as far as we can, and we’re in desperate need of new sources of funds.

In time and done correctly, the proposed sale of GrainCorp to American grains giant Archer Daniels Midland (ADM) can be a real positive for our industry, but the current state of flux is not the time to rush a deal through.

Virtually all farmers in Victoria have said they feel there needs to be some sort of regulatory framework in place regarding the ports and ensuring no company is in a position to exert a de facto monopoly on port access.

This feeling is applicable no matter who runs our bulk handling assets, but a lack of certainty regarding future government policy on regulation of the ports means we should delay a final decision on ADM’s takeover bid.

The business sector opposes this, saying government should not intervene on shareholder decision, but given GrainCorp’s position in the market its sale impacts far more than those with a financial stake in the business.

ADM has made it clear it will abide by the laws regarding the GrainCorp business, but it's our job to make sure the appropriate checks and balances are in place.

Currently, it appears those pushing the sale are telling the farming sector to rely on the well known altruism of big business to look after producers’ interests.

I’m not one of those that think growers and agribusiness are automatically diametrically opposed on every issue, but equally, it would be naïve to advocate handing over a business like GrainCorp merely on a handshake and ADM’s verbal promise to try really, really hard.

GrainCorp is such a strategic business, with its domination of east coast receival and port assets and Government seems so indecisive regarding its position on port access that it appears most growers want to see any takeover deal delayed until they know what sort of framework ADM will be working in.

There’s definitely a lot of upside in having a company that has publicly declared its focus on capital expenditure and improving site efficiency in charge, but it is not something that should be rushed through while the nation is in election mode and focused elsewhere.

StockLand
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READER COMMENTS

Dickytiger
16/08/2013 8:05:08 AM

Why is this your business, or that of anyone who does not own the company? Doesn't private property mean anything?
torobrook
16/08/2013 1:09:34 PM

Dead right Dicktiger.The xenophobic and the woolly headed do not understand that this is completely a matter for the shareholders of Grain Corp and no one else. Not even those Nat. and Lib. politicians and farmers still thinking in the 1930s. They havent got a clue as to what private property means. Always looking for some centrally planned intervention.
ecnerwal
16/08/2013 2:05:34 PM

Gregor Heard, I compliment you on the maturity of this article. Even in USA, the so called bastion of free enterprise, no Trader has a monopoly the size of GrainCorp on exports. ADM can't believe their luck that Aust might even consider giving any trader such control over its grain exports. I have sympathy for GrainCorp shareholders who are caught in the middle of this fiasco. It arises because of inadequate planning and foresight at the time of wheat market deregulation. If there had been foresight, damage to shareholders could have been avoided. Now it is inevitable in fixing the mess.
torobrook
16/08/2013 6:46:04 PM

ecnerwal,instead of throwing alarm and fear mongering about -explain exactly what you mean by your assertions.Theres no monopoly in USA .Doesnt have to be- plenty of players big and small.Open your eyes-Aust. has a plethora of exporters .Grain Corp (ADM)is and wont be the only one.What is this fiasco that shareholders are caught in.What sort of planning and foresight -explain yourself.What damage to shareholders - me thinks they are happy- but please illustrate the damage.What mess.Seems pretty straight forward to me.More hollow thinking consumed with prejudice.
ecnerwal
17/08/2013 5:34:24 AM

Toro, until I read your last line I thought you just might be truly interested in an open, honest discussion for the good of your industry.
A matter of opinionA selection of editorials from around the Fairfax Agricultural Media group covering the issues of the week.

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