Grain growers say there’s a critical lack of investment in grain storage, and the sale of GrainCorp won’t necessarily fix it. They’ve fronted a Senate inquiry into the $3.5 billion offer by US giant Archer Daniels Midland to buy Australia’s largest grain handler.
The Senate inquiry has heard from farmers both for and against the sale, but the common message was concern about investment.
The Senators, particularly Heffernan and Nash, attacked the competition watchdog, the ACCC, for not digging deep enough into ADM’s dealings overseas when adjudicating on GrainCorp’s sale.
Liberal Senator Bill Heffernan says ADM, with a global grain turnover of close to $90 billion, is facing inquiries over not paying tax, and price fixing with the other grain giant, Cargill, in Canada.
But the same Senators gave and easier run to grain growers, among them Andrew Weidemann of Victoria, who supports the sale, but worries about ACCC’s lack of understanding the grain market.
“Australia needs international investment. But what we see is a more efficient supply chain.
“There are only five exporters out of Australia of significant quantity and we are not seeing the benefit of proper deregulation yet.”
Mr Weidemann says there’s no transparency over what grain is in storage up the supply chain.
Ron Greentree, of Mungindi in NSW, one of Australia’s largest grain growers, told the Senate inquiry he supports the sale.
“I don’t believe ADM is a white knight, but we need more investment in storage and handling.”
He says he thinks there’s an opportunity for multinational food companies to invest in food manufacturing in Australia, citing Cargill’s global deal with McDonald’s, to supply flour for the buns and beef for patties.
But the chair of the inquiry, Senator Heffernan, says the relationship between ADM and Cargills will be “too cosy”, as it is overseas. So if ADM has a deal with Cargill as a joint venture on flour production, with Allied Mills and breadmaker Goodman Fielder – with its relationship with Coles’ generic bread – that’s also “too cosy” and won’t benefit grain growers, he says.
(Source – http://www.blackseagrain.net/about-ukragroconsult/news-bsg/grain-growers-worry-about-lack-of-investment)