Against the Grain

Professor Henry Ergas is an excellent commentator on economic matters. He began his column in The Australian on Remembrance Day with what he described as an “heretical thought”. This was that Australian farmers aren’t idiots. If they’re concerned about the proposed acquisition of GrainCorp by Archer Daniels Midland, their fears shouldn’t be dismissed as ”hysterical rants”.

As he says, ADM is no poster child for global “agribusiness”’, to use that trendy word being thrown around these days.

It has been involved in a price-fixing conspiracy which resulted in record fines and criminal convictions for executives. There are allegations that it has been engaged in corrupt practices. The Cato Institute says ADM is a rent-seeker “drunk on tax dollars” from its very big investments  in ethanol.

Nevertheless, Professor Ergas believes the Treasurer should approve the sale. He argues that GrainCorp’s network of ”up-country silos” now faces serious competitive threats. He says that…