Press Release

SOCIALIST FARM ORGANISATIONS WRONG AGAIN

2013-11-21

The Federal Treasurer, Joe Hockey, should ignore the advice of State Farm Organisations (SFOs) like the Victorian Farmers Federation and the New South Wales Farmers Association, who reject the Archer Daniels Midland takeover offer for Grain Corp.

 

This is not the first but the third occasion in five years that the SFO’s have sought to influence the coalition to implement ruinous agricultural policy disguised as the national interest.

 

Throughout the early 2000’s these same farm organisations were in a toxic partnership with the former, government backed, monopoly export wheat buyer AWB.

 

They were instrumental in persuading the last coalition government to go to the 2008 election supporting monopoly wheat buying, a decision so damaging to Australia’s reputation as a country intolerant of corruption and so injurious to wheat farmers’ prospects that one of the first acts of the Labor Government was to replace the regulated system with a free-market.

 

Five years later the grain industry has made great advances including aggressive buying competition for our product, improved liquidity as cash buyers win market share, new markets, better integration with overseas supply chains, more options and better net farm gate returns for farmers.

 

None of these advances were anticipated by these farm organizations.  They declared that as a “last-resort buyer” of wheat was no longer present farmers would be stuck with vast quantities of unsold wheat.

 

In reality the biggest problem confronting the grain industry has been to manage the logistics so that we could satisfy the previously unrecognised demand.

 

The logistics shortcomings that became evident as a result of deregulation are correctly attributable to decades of government intervention, characterised by malinvestment and underinvestment.

 

And this is where the SFO’s once again have demonstrated their unlimited capacity for ruin.

 

Last year they campaigned to have the redundant powers of the Wheat Export Authority retained and its jurisdiction expanded so that the Bulk Handlers conduct of business could be micromanaged by politicians with the able assistance of the farm organisations. 

 

Their intention was to re-regulate the wheat industry by stealth.   Amazingly the SFO’s enjoyed the support of the Liberal Party at the highest levels.

 

Once again it was left to Labor and the Greens to further reform in the wheat industry. 

 

That these farm organisations are nothing but determined to implement their re-regulation agendas can be seen in their opposition to the ADM takeover. 

 

As a reward for pledging their fidelity to the AWB these SFOs were provided with status and recognition; however the price for this privileged position was they were not allowed to address a single problem with the administration of the system - even when fraud, corruption and numerous other excesses were occurring right underneath their noses. 

 

But now they are hypersensitive to imagined foreign threats, monopoly exploitation where the ACCC formally states no monopoly exists and perverse corporate behavior which in earlier times they overlooked. 

 

Such is the SFO’s desperation they now claim that ADM will deliberately devalue their investment by systematically reducing the efficiency of their new business acquisition. 

 

In the real world, a management that attempts this feat will soon lose control of the company to its competitors.

 

On the other hand the SFO’s seem completely unconcerned with the destruction of shareholder value in Grain Corp, 10% of whose shares are owned by farmers. 

 

This destruction is certain to occur if the farm organisations advice to reject the takeover or vindictively regulate ADM is followed.

 

As Australia’s persistent current account deficit shows Australian business is dependent on foreign investment.

 

Last time we looked agriculture was part or Australia’s business scene.

 

Unless some one in the government has some ideas on how to run an industry in a capitalist system without capital then Mr Hockey should not allow the Liberals to be fooled for the third time in five years on a matter critical to the national interest.

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