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Archer Daniels Midland offer has union backing

An offer by American food giant Archer Daniels Midland for GrainCorp has divided the Coalition.

November 19, 2013 4:22am

The union leader representing workers at foreign takeover target GrainCorp has given his backing to the sale, saying if Treasurer Joe Hockey is rolled on the buyout it would create ‘‘massive’’ sovereign risk for Australia.

Australian Workers Union boss Paul Howes said he was concerned about reports that Prime Minister Tony Abbott did not support the bid for GrainCorp, which Mr Hockey will rule on by December 17.

The offer from American food giant Archer Daniels Midland has created deep divisions in the Coalition, with the Nationals and some rural Liberals strongly opposed to the sale.

Coalition figures say Mr Abbott is inclined to say no to the purchase of Australia’s largest agribusiness, or make conditions so onerous as to make it unviable, The West Australian reported on Friday.

But Mr Howes said without foreign investment, Australia’s agribusiness would ‘‘never become the food bowl for Asia that we talk about’’.

‘‘What concerns me is that if the National party wins in this fight against Joe Hockey over ADM and GrainCorp, is that there will be a massive sovereign risk for our nation in terms of our agribusiness sector,’’ he said.

But Western Australian Liberal senator Dean Smith, like others in the nation’s biggest wheat-growing state, is backing the ADM bid.

‘‘This deal ... ticks a lot of boxes for the 21st century,’’ he told parliament on Thursday.

Australia was a big exporting country and needed the ‘‘absolute best infrastructure’’ and best global connectivity.

‘‘We need competition — this is the absolute imperative that underscores everything.’’

Senator Smith said debate about foreign investment should not be used as a Trojan horse by those seeking to reverse the benefits of deregulating the wheat export market.

He rejected claims by opponents of the sale that GrainCorp operated a grains handling and export monopoly on the east coast.

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