AGRICULTURE and Water Minister Barnaby Joyce has rejected suggestions his calls for increased superannuation contributions to local agricultural investments conflicts with his warnings against corporatising the WA farmer-owned grains co-op CBH.
Mr Joyce pushed a strong message at the ABARES conference in Canberra last week about the "paradox" between strong foreign interest in Australian agriculture and the dearth of local contributions from superannuation funds.
He said of about $2 trillion invested in super funds, only 0.3 per cent was in agriculture and the maximum exposure of any fund to farming was just 1pc.
"I've had a look at some of these funds in my discussions with asset managers and this issue I find perplexing," he said.
"I wonder if agriculture was a better or worse investment than being overweighted in coal shares.
"We have to make sure that we create a culture where investment in the agricultural portfolio is just as logical as an investment in the iron ore portfolio, or the coal portfolio, or the infrastructure portfolio."
Mr Joyce said the scenario was a "paradox that we really need to deal with and we really need to get on top of".
Speaking to national media following his ABARES address, Mr Joyce reaffirmed his views on CBH potentially altering its structure and the associated pitfalls.
He said co-operatives saw a short-term financial gain in corporatisation "and that's fair enough - and they get that short-term gain".
"They get a share, they sell their share and then someone else owns the company," he said.
"And then that other person when they own the company, of course, has a duty of stewardship to their shareholders and therefore they drive the price up, on the price of their asset, and the return they get for their capital.
"And then the farmers charge in to see me and they say 'this is totally unfair' and I say 'well mate you sold the share - you bought the risk'."
Mr Joyce said he found it peculiar that Australian agriculture was a venue for foreign investment but not for domestic super funds.
"I truly believe the Australian people want more than 0.3pc of their superannuation invested in agricultural assets and when you discuss it, they're quite shocked by the fact their super fund has such little hold on Australian agricultural assets," he said.
"Any Australian super fund should have the capacity to go on the share market and see what shares are available and also get out there and create agricultural vehicles between themselves."
Shadow Agriculture Minister Joel Fitzgibbon has described Mr Joyce's warning on CBH corporatisation as "extraordinary".
Mr Fitzgibbon said the only interpretation possible of the Deputy Prime Minister's comments on CBH was: "you will choose the corporate structure I prefer or you will get no assistance from this government."
"That in my view is a first and it's extraordinary," Mr Fitzgibbon said.