Farmers welcome Senate’s calls for greater scrutiny on ADM

NSW Farmers has welcomed the Senate Rural and Regional Affairs Committee’s recommendation that further scrutiny be placed on the proposed takeover of Australia’s largest agribusiness GrainCorp by the American corporate Archer Daniels Midland (ADM).

NSW Farmers grains spokesperson Daniel Cooper has commended the committee for bringing the debate back to the key issue - whether the sale will be in the best interest of farmers and the national interest.

“Farmers are concerned about the long term implications of the sale on the market for their crop,” said Mr Cooper.

“The sale of GrainCorp would immediately remove Toepfer, which is 80 percent owned by ADM, out of the market for Australian grain, reducing the competitive tension in an already concentrated market place.

“The sale will also potentially give ADM a majority share in one of Australia’s largest individual end users of grain - Allied Mills - which is currently a joint venture between GrainCorp and another giant American agribusiness Cargill.

“Growers are already aware that GrainCorp’s use of its monopoly grain storage and handling infrastructure impedes a competitive market for their grain. 

“The Senate Committee has highlighted ADM’s history of anti-competitive behaviour and how it would leave growers vulnerable because of its dominant market position,” he said.

Mr Cooper said NSW Farmers believed the Australian Competition and Consumer Commission (ACCC) wrongly believed the sale was not likely to lessen competition for farmers’ grain.

He said the ACCC decision showed a lack of familiarity with the grains market and under estimated the impact of the integration of the grain food value chain and the proposed weakening of access arrangements to GrainCorp’s export grain terminals.

“We welcome the Senate committee’s call for the ACCC to reopen its investigation into the sale with a greater emphasis on the cross-ownership arrangements that would result from the sale,” Mr Cooper said.

“The committee’s call for the ACCC to also commission independent advice from experts in the grain value chain should also be acted upon.

“The Foreign Investment Review Board should heed the wisdom of the committee in taking advantage of the evidence it has received over ADM’s history of collusive behaviour and tax avoidance.

“To ensure the transparency that is required for public confidence in any recommendation that FIRB provides to the Treasurer, FIRB should explicitly provide an explanation of how this information informed its decision making process,” concluded Mr Cooper.

In July 2013, more than 300 farmers at NSW Farmers Annual Conference unanimously resolved to call for the blocking of the sale of GrainCorp to ADM on the basis that it was not in the interest of farmers or Australia’s national interest.

 

Contact: Veneta Chapple

Phone: 0429 990 218

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