National pride !

A mixed reaction to the decision by Treasurer Joe Hockey to nix the takeover of Graincorp by American agricultural giant Archer Daniel Midlands ( ADM ).  Commercial interests - and Graincorp itself - see it as a retrograde step that will deprive Australia of a huge injection of money to expand and modernise our agricultural industry.   Farmers mostly see it as keeping the Australian contribution  to the world grain market free of foreign control.

Both sides of the argument have valid points.    Australia would certainly gain if the " economy of scale " principle increased our grain harvest, and that would require more agricultural land to be developed and brought into production.   ADM has the deep pockets to make that happen.   The proceeds of the sale of Graincorp would represent a massive injection of funds to compliment ADM's expertise and create market expansion.

The fly in the ointment is the loss of local control.    The pundits assure us we are looking at a world that is rapidly moving beyond the capacity of the food supply and the future holds the spectre of world famine. Grain is one of the basic foodfstuffs of this world and countries like Australia will be critical in using it's immense agricultural space in meeting that demand.   It irks many people to think that control of that world commodity could be made in the board room of a foreign country.

We can probably have the best of both worlds - if takeover evolves into a shared financial interest.  Few farmers would object if ADM became a shareholder in Graincorp - provided that holding did not exceed forty-nine percent.   That would be a matter of retaining local control of any industry that the nation sees as critical to it's sovereign interest - and which would be protected by legislation.

Australians are sensitive to acquisitions of brand names we claim to be national icons.  Names like Vegemite and Arnotts biscuits moving into foreign hands provoked a storm of protest.   It should be a matter of national pride that we have developed products that have moved onto the world stage by nature of their pinnacle of success.

Relinquishing control of an entire manufacturing industry goes a long way further than the ownership of a mere product brand and what happens in the world market place has a bearing on how this nation earns it's income.    Making sure that our grain harvest remains under Australian control was the right decision !