AUSTRALIAN Agricultural Contracts Ltd (AACL) is taking measures to distance itself from the perception it provides a managed investment scheme (MIS) to graingrowers, following last week’s admission that it was struggling to raise funds for new participants in this year’s Grain Co-Production (GCP) program.
AACL product services general manager Matt Rigg sent a letter to AACL customers last week warning them of recent developments that had impacted on AACL’s ability to raise capital for this year’s GCP scheme.
These events included a prolonged delay to a product ruling from the ATO and recent revelations that MIS operators Timbercorp Limited and Great Southern Limited had been placed into administration.
Mr Rigg said these issues resulted in considerable uncertainty in the market place over the future of agricultural MISs.
“Although AACL’s grain co-production operates in the non-forestry sector and with a completely different business model to those failed structures, we are nonetheless caught up in this industry uncertainty,” he said.
“As a consequence, we are currently unable to determine what impact this will have on our fund raising and our capacity to meet farmer demand.”
The ATO ruling was issued last Thursday, meaning AACL’s fund raising venture for this season’s crop must be completed by May 31.
Mr Rigg said the late ruling gave the AACL an unreasonably tight timeframe to work to.
In the 2008 harvest, AACL had 170 clients that produced 320,000 tonnes of wheat and barley.
It anticipates having 250 clients this year and requires about $30m of investor capital to reach its targeted crop.