Truss slams Graincorp deal

The deputy Prime Minister is opposed to the ADM takeover over of Graincorp

Deputy Prime Minister Warren Truss says Australia must control its food security and selling GrainCorp would give control of ports and handling facilities to a US firm.

Mr Truss says both sides of politics want agriculture to be a key part of the nation's future, but it would be very difficult for Australia to make decisions for the sector to prosper without owning any of the supply chain.

"It's very important for Australia to maintain control of its own food security that we have control of our own destiny in what is an important pillar of our national economy," he told ABC Television.

The government is considering whether to approve a $3.4 billion offer for GrainCorp, Australia's largest grains handler, from US grain giant Archer Daniels Midland.

The Australian Competition and Consumer Commission approved the deal in June.

Last week, Treasurer Joe Hockey said the government needed more time to consider all relevant issues and advice from the Foreign Investment Review Board before making a decision. That will now be made on December 17.

The Nationals oppose the sale, which would place most of Australia's grain infrastructure in foreign hands.

Mr Truss said this meant decisions on the Australian grains industry would ultimately be made in foreign boardrooms.

"On top of that, GrainCorp is the largest listed agribusiness in Australia and if we lose this business to foreign ownership, then we will lose the potential to have an international-standard agribusiness trading around the world," he said.

Mr Truss said he was confident Mr Hockey was aware of the issues in this deal.

"Certainly the Nationals' views on the issue are well known," he said.

"People feel very strongly about the issue. It is certainly an important one. But it's not just Nationals, there are Liberals also."

Opposition trade spokeswoman Penny Wong said Australia was a capital-hungry economy that relied on foreign investment to create jobs and business opportunities, and to lift growth.

"If we are serious about becoming the food bowl of Asia, we have to front up to the reality and necessity of foreign investment in our agricultural sector," she said in a speech to the Chifley Research Centre in Sydney.

Senator Wong said it was inconceivable that Australia would be able to develop production to fully tap into the growing consumer markets of Asia without foreign investment.

She said Labor recognised that national-interest considerations were key, "but issues that could properly be dealt with through other means - for example through the Australian competition and regulatory framework, FIRB conditions or corporate regulation - should not be used as a pretext to oppose foreign investment", she said.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles