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Australia's East Coast Farmers Join Forces Against ADM Takeover

21 August 2013

AUSTRALIA - State farming bodies on Australia’s east coast highlighted today the importance of a competitive grain market if agriculture was to remain a key driver for economic growth in Australia.

NSW Farmers Association, AgForce and Victorian Farmers Federation warned that allowing giant American agribusiness Archer Daniels Midlands (ADM) to purchase GrainCorp was likely to entrench the high concentration of grain handling assets and marketing in eastern Australia’s grain market.

Chair of NSW Farmers Grains Committee Daniel Cooper said: “GrainCorp operates like a regional monopoly across the grain growing regions of eastern Australia with a formidable footprint that impacts on our grain market all the way from the farm gate to the flour miller and the port.”

“This market power is unlikely to be wound back once control is given to the third largest balance sheet in global agriculture.”

AgForce Grains President Wayne Newton said Queensland grain growers were not surprised that ADM saw the acquisition of GrainCorp as an excellent opportunity given the absence of rules necessary to underpin a competitive market for the grains industry.

“GrainCorp has a massive advantage over other grain traders as a result of its operation of the core essential infrastructure that serves as the backbone of the market,” Mr Newton said.

“This will be exacerbated if ADM is allowed to buy GrainCorp when no rules require competitive access to upcountry silos and the regulation maintaining third party access to ports is in the process of being
substantially weakened.”

VFF Grains President Brett Hosking said: “The sale would give ADM influence on 90 per cent of grain
exports from eastern Australia through control of GrainCorp’s port terminals.

“At the same time control of GrainCorp’s upcountry facilities would also provide ADM with an advantage in the market by knowing the quantity and quality of the majority of the east coast crop, including that owned by farmers and other traders.

“VFF is calling upon the Government to ensure the ADM takeover does not diminish competition in the east coast grain trade’

“The more we look at what ADM is putting on the table, the more we are concerned that the sale of GrainCorp to ADM will bring no tangible benefit to growers, in terms of higher grain prices, or the future of Australia.” said Mr Cooper.

"Therefore we are united in calling upon both sides of politics to not stand idle on their vision to ensure a competitive grains market."

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