LETTERS
Why it matters who owns Australia's GrainCorp

News Weekly, December 7, 2013

Sir,

Australia has little left to hold its farming communities together. The takeover of its grain handling by a foreign company will put one more nail in the struggling agricultural industry.

GrainCorp is an Australian-owned company. When farmers have issues with its operations and policies, they can call the directors and raise their concerns.

If shareholders have serious concerns, they can easily attend the GrainCorp annual general meeting, which will deal only with GrainCorp business. They can even do a Stephen Mayne.

If GrainCorp is taken over by the U.S. corporation Archer Daniels Midland (ADM), the story changes dramatically.

ADM annual general meetings are held in the United States. Australia’s GrainCorp would make up just 4 per cent of its business and would seldom rate a mention.

ADM is headquartered in the U.S. and is owned — or more accurately, controlled — by a complex trust structure. This trust is dominated by two families, and it is not possible to hold ADM shares directly.

Australian farmers will be unable to access or to call the ADM directors, and it would be extremely difficult and costly to attend AGMs.

Australian farmers will be at the mercy of a U.S.-based grain-trader with a history of ongoing corruption and price fixing (see Patrick J. Byrne’s report in News Weekly, November 23, 2013).

Nor will Australian grain farmers have the choice of selling their crop to a competitor grain-trading company if ADM is allowed to take monopoly control of key bulk storages and port export facilities.

GrainCorp is currently owned by Australians, mostly grain farmers and “mum and dad” investors.

Currently, it appears that there is no taxation script to provide relief for shareholders from capital gains tax if GrainCorp is sold to ADM, which is owned by a complex trust structure.

Question: if federal Treasurer Joe Hockey approves the ADM takeover bid for GrainCorp, will this force shareholders into paying hefty capital gains when they sell their shares?

Geoff and Pat Mills,
Youarang, Vic.