A U.S.-based company is in position to purchase the last standing Australian agribusiness giant. U.S.-owned company Archer Daniels Midland (ADM) is pushing hard to take over Grain Corp. The acquisition is in review. Australian senators are questioning the acquisition, partially because many constituents oppose another foreign entity buying the last major domestically owned and operated agribusiness.
On the surface, the acquisition appears to be a straightforward global business arrangement. However, it is something that Australians should be paying close attention to because it could have a powerful impact on the future of our country — perhaps even more powerful than the election.
Not only does ADM work closely with agribusiness giants such as Monsanto and DuPont – companies that are causing friction between the United States and Russia – but also ADM has a shady history of price-fixing. Based in the United States, it is doubtful that the company would have the best interests of Australians at heart.
Food Production in the Asian Century
One of former Prime Minister Gillard’s initiatives was to position Australia as a benefactor of the Asian Century. Extensive work has brought the countries closer together diplomatically and established our industries as the premier provider of resources such as metals and food.
As Asia continues to grow, the population will purchase imported foods on a more frequent basis. With Australia’s booming export business, the nation is an excellent position to provide both grains and finished goods to these countries.
Ripe for the Picking
Australia is one of the largest exporters of wheat in the world. In 2010, the country provided nearly 12% of the world’s wheat. Global agribusinesses, such as ADM, see Australia as an irresistible opportunity to grow and expand their global portfolios and serve themselves a second helping of the benefits of the Asian Century.
In 2010, Agrium, a Canadian company, acquired Australian Wheat Board (AWB). Agrium then sold AWB to Cargill, another U.S. company with a less-than-stellar reputation and close ties to Monsanto. In 2009, ABB Grain was acquired by Viterra, which was then later acquired by GlencoreXstrata. Once they leave the homeland, Australian companies end up as the property of anybody with enough money.
Losing Opportunity through Globalisation
Effectively, the acquisitions and sales limit Australia’s ability to reap the full benefits of the Asian Century. Even before the food boom takes off, the country sold companies that would have contributed billions of dollars to the economy in the next couple of decades. While the acquired businesses will still be contributing to the economy, the profits will be going to offshore companies that do not have Australia’s best interests at heart.
With the cosy relationship each of these companies enjoys with agribusiness giants such as DuPont and Monsanto, there is an underlying concern that Australia could become entangled in growing global discontent over genetically modified foods, the decline of wild bees, and other problems brought on by minimally regulated global agribusiness.
In the last month, there have been two particularly worrisome headlines. The first was the discovery of genetically engineered wheat in the state of Oregon in the United States, which is harming the United States wheat exports. The second was Vladimir Putin’s strong words (indicating an inevitable world war over resources) to President Obama regarding the declining of the bee population.
By allowing Grain Corp to become a portfolio item for yet another foreign agribusiness giant, Australia will further erode its ability to capitalise on the Asian century, and place itself in danger of being wrapped up in the nasty politics of food.
Australia can do better than this. Our senators are alarmed and posing tough questions to ADM. Ultimately, it is up to the Treasury to approve this acquisition. With so much at stake, Australia would be wise to reject the sale and retain its last domestically owned and operated agribusiness. Rejecting the sale would protect our exports position in the Asian century, and limit exposure to the inevitable negative fallout global agribusiness will face in the near future.
Anna K. Journalist – Anna is an experienced journalist with a flair for researching Australian current affairs. With her nose always in research and her pen always in action, Anna expresses her interest in the Australia news market through blogging and daily research. Anna has over a decade of experience in journalism, graduating with a major in Journalism and a minor in Communications with honors. For copywriting services and more, visit www.expresswriterteam.com