Australia: NSW Farmers Association calling for inquiry into sale of GrainCorp to ADM

The NSW Farmers Association is calling for a federal inquiry into the sale of east coast grain handler GrainCorp to US giant Archer Daniels Midland (ADM), World-grain.com reported on April, 29.

GrainCorp handles over three-quarters of the grain grown in eastern Australia and directly sells half of the wheat exported from NSW.

GrainCorp directors have accepted a takeover bid from Archer Daniels Midland of A$3.4 billion dollars, after rejecting lesser offers from the American company.

ADM says if the offer proceeds the deal with help "connect Australia's growers with growing global demand for crops and food, particularly in Asia and the Middle East".

ADM has a Sydney office which services Australia, the Pacific and South East Asia.

They operate in 140 countries.

They produce a range of specialty food and feed ingredients made from corn, soy, wheat and cocoa.

They own a stake in Wilmar International Limited, a big Asian processing business and operates palm plantations, crushing facilities for various types of oilseeds, vegetable oil refineries and packaging facilities, plants that produce oleo chemicals, soy proteins and fertilisers, and multiple wheat and rice milling facilities.

The question for growers is will ownership by ADM benefit the Australian industry in any way?

Grains analyst Paul Jenz isn't worried. He thinks it will be business as usual if ADM complete the sale.

The Grains Research and Development Corporation says it's a lost opportunity to form a big Australian company that could operate on the world stage.

Mark Hoskinson, chair of the NSW Farmers grains committee, and a farmer near West Wyalong, says growers are worried about ADM's plans for up-country storage and transport infrastructure.

He says port access is also a worry if one foreign company owns seven out of eight ports on the east coast.

He wants a Federal Government inquiry to explore the issue and put a code of conduct in place to guarantee competition in the sector.

"Ports can become a bottleneck or choke point, so we talked to Cargill about open access to ports owned by AWB (when they took AWB over). With GrainCorp having such a large footprint, we (are concerned about a monopoly of the grain trade."

Mark Hoskinson says ADM is considering signing up to a code of conduct to ensure open access by competitors to the ports.

02 May, 2013