THIS WEEK is a countdown to fairness of foreign-owned companies to farmers — Australian farmers in a week that includes Australia Day.
Agalert will bring a series of stories, facts and political responses to this issue through the week.
While the issue is centred on whether Singaporean giant Wilmar will offer a fair deal to sugar cane farmers, the issue affects all farmers.
The beef, sheep (meat and wool), grains, oilseeds, fruit and vegetable processing sectors in Australia are all largely foreign-owned.
Most have bought existing facilities developed by Australian companies and farmer co-ops.
Their investment is not largely to build new facilities, but to control markets and eventually pricing and premium branding profits.
This is the test — one that the Foreign Investment Review Board (or certainly their chairman merchant banker, Brian Wilson) has studiously avoided analysing in any depth.
Are the foreign owners just using their market power (globally and in Australia) as political lobbying muscle to increase the proportion of Australian agriculture that goes to the processor and marketer — and reduce the proportion going to growers.
Some have tried and been caught-out to date.
Wilmar is the most blatant in trashing decades of fair split of processing and marketing between farmers, processors and marketers to a system that fully favours them (in less than transparent transactions across to low-tax Singapore).
This is the pitch put to foreign investors to jump into the Australian market — FIRB is so weak and the follow-up by Federal and State Treasuries so poor that you will get away with switching the revenue and profit share for: Australian farmers to your multi-national low tax offshore place of choice.
Wilmar put this exactly to an investor seminar in Singapore and Malaysia in 2014.
Investors from Indonesia, Malaysia and Singapore complaining that Wilmar has spent too much, especially the $2 billion on Sucrogen (ex CSR) and Proserpine mills and associated sugar assets were told clearly that Wilmar had a plan to reduce payments to farmers and lift their processing and marketing share of revenues ‘as they had done in the palm oil sector’.
So, farmers across all sectors where processing and marketing is dominated by monopolistic and, usually, foreign corporates need to watch this week’s Wilmar countdown.
Why this week?
Although they have had more than a year to allow farmers a choice of who markets their sugar, Wilmar is still holding-out one week before the January 31 deadline.
That’s effectively the last day that an agreement can be finalised that gives cane farmers the time to forward sell their crop for the 2017 harvest.
Probably it could slip a week or two, but that’d be on a wing and a prayer.
So that means Wilmar needs to have agreed to a marketing choice by this Friday to allow the lawyers and legislators time to get their contracts and agreements legalled.
And all the politicians who have spoken in favour of farmers (that’s everyone except the ALP government in Brisbane for reasons that are bizarre given Wilmar’s unionised workforce is next in the firing line) now need to change words to ACTION.
Agalert will be keeping on the pressure hour-by-hour, day-by-day in this critical week for Queensland farmers.