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The Forum > Article Comments > The foreign takeover of GrainCorp can Joe Hockey demand conditions? > Comments

The foreign takeover of GrainCorp can Joe Hockey demand conditions? : Comments

By David Richardson, published 11/11/2013

GrainCorp made a healthy 14.4 per cent rate of return on equity in 2012 or a 21.5 per cent return before tax

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ACCC and FIRB management should publicly reveal all impact and consequences for Australia concerning impact of over 90% of north Queensland beef export industry now foreign owned and controlled, especially in conjunction with profit being made and declared in overseas countries.
Therein is a lesson on socio-economic consequences re similar foreign control of wheat exports.

Does Minister Hockey deny a fish and beef supply and demand link?

There is something very fishy going on in more ways than one.
Australian farmers are being paid about A.$2 per kilo for Australian produced beef, while overseas consumers of that beef pay A.$50 to A.$100 per kilo without that high value. Blood and boone is also selling for huge money now ocean linked guano supply is running out.

How can it be that Australian taxpayers have developed the Australian beef industry to continually benefit Australia, and then such industry export control is sold to overseas investors?

Major media and/or government is suppressing the devastation of ocean fish protein - supply collapse. Alternative essential food supply is now being bought up by foreign investors in the know.

Mr Hockey and Mr Abbott should be challenged to put forward their knowledge of the beef fish supply links and economics, especially viable sustainability and future cost of beef to Australian consumers.

Look at the price of fish these days, quality beef too.

Australian food and fibre producers and business and people should be allowed to hear about seafood sustainability collapse, in order to realise new supply and control and export revenue opportunities FOR AUSTRALIA.
Posted by JF Aus, Monday, 11 November 2013 7:47:41 AM
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Joe Hockey has said repeatedly that 'his decision' on the ADM acquisition of Graincorp will be governed by what is in the (Australian) national interest. That being the case, how can such a takeover be approved; handing over virtually all of our East Coast grain handling, storage and port facilities to overseas interests is obviously not in the national interest.

Our Asian neighbours, particularly China, must shake their heads in bewilderment that a country would allow its fundamental assets to be taken over by offshore interests: as mentioned earlier we already have decimated our beef cattle industry, we seem hell bent on flogging off our dairy products processing capability and now we are considering giving away our capacity to store, handle and ship our grain crop.

Being "open for business" doesn't mean that you flog everything, including that which is bolted down.
Posted by wantok, Monday, 11 November 2013 8:39:38 AM
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Well, in a word, no! Not without creating a precedent, that will then apply to all other foreign investment.
This is now only a problem, because some rather obtuse and recalcitrant ideologues, wanted to privatize the wheat board; for healthier competition, was the catch cry.
Before it was privatized, the board could set a floor under the sell price, meaning farmers were never ever just price takers, and or could be virtually forced sell at farm gate prices, lower than the cost of production.
Joe can roar and thunder, but we have a free trade agreement, and the entity that is in the American investor's cross-hairs, is a private corporation!
End of story.
Rhrosty
Posted by Rhrosty, Monday, 11 November 2013 11:14:02 AM
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Out gathering evidence of fish depletion and impact in the Pacific Islands I take photos of dinner plates without fish, and those plates are usually covered with rice or potato only.

If fish is available the plates are half covered with fish and half with rice.

In other words it can be said that rice consumption has increased up to 100% generally speaking, because affordable fish supply collapse is general. Key word - affordable.

In Aust I eat a lot of grain to cut down buying 3 meals a day. Likely other people are doing similar, so grain consumption has surely increased, because of ocean seafood devastation.
What does the FIRB know of these links?

This is not the time to be selling control of food and fibre.

Food security is not just about running out of food, it's also very much about supply of available food at affordable cost. The latter is already a critically serious problem associated with malnutrition affecting many people, whether they know it or not.
Many of our children go to school without lunch.

Beef and fish and grain supply and availability and affordability are linked. The quality produce is already being exported.

It's not that loss of food security means everybody will suddenly go hungry.

Loss of food sustainability in Australia is already well underway.
It will likely continue to go unchecked by Hon Hockey.
Incredible.
Posted by JF Aus, Monday, 11 November 2013 12:40:03 PM
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One has to question why the takeover of GrainCorp by ADM would be in the national interest, given that:

. GrainCorp is a thriving business and definitely not in need of any foreign investment;

. it is definitely not in the farmers' interests, as they would be effectively captive clients and would be expected to be exploited by much higher charges;

. GrainCorp would gain very little, if any, expertise from the takeover;

. ADM would be buying a going concern, that it could exploit easily (especially given its unscrupulous record), regardless of what token conditions are imposed by the Government;

. ADM has a corrupt past, as outlined by Henry Ergas in today's The Australian:

" This company was at the centre of the lysine price-fixing conspiracy ( see http://en.wikipedia.org/wiki/Lysine_price-fixing_conspiracy ) , which inflicted enormous harm on farmers worldwide and resulted in record fines and criminal convictions against three of ADM's most senior executives. Most recently, it has been tangled in corruption allegations, with its latest quarterly report doubling the provision it has made for penalties arising from probes by US government agencies.

And Washington's free-market Cato Institute has characterised ADM as a rent-seeker "drunk on tax dollars" that, thanks to massive investments in ethanol, has derived 30 per cent to 40 per cent of its profits from taxpayers. As well as distracting the company from its core business, that has made it highly vulnerable to sovereign risk.

Little wonder, then, that it is willing to pay top dollar for GrainCorp, whose international reputation and trading networks would help restore ADM's standing in grain markets."

With regard to supposed free trade, the US is not slow at making exclusions, e.g. the virtual ban on sugar imports.

Apart perhaps from offending GrainCorp shareholders, it is difficult to see how the Treasurer would be acting contrary to the national interest by not approving the takeover.
Posted by Raycom, Monday, 11 November 2013 2:33:42 PM
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