Graincorp and ADM bid – understanding a coalition Govt
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Libs vs Nats: GrainCorp stoush shows cracks run deep in the Coalition
Socrates once observed that no-one could be a statesman if they were entirely ignorant of the problem of wheat. Once again wheat – or, more precisely, grain handling and the sale of GrainCorp – is drawing attention to the fact that the Liberal-National Party coalition is not a single entity united in its approach to policy.
Australia’s 44th parliament has only just convened and we are already being reminded that the Abbott government is not a majority government but a Liberal-led minority government. Tony Abbott is in power with the support of a party whose history, ideology and support base are different from that of the Liberal Party.
With 58 seats, the Liberal Party does not have the numbers to govern in its own right. It needs nearly all of the 22 votes that National Party leader Warren Truss can deliver to guarantee passage of its legislation.
Farmers vs graziers
The National Party is largely agrarian in orientation, with its origins in a belief that neither of the two city-based parties can truly understand or represent the interests of rural Australia. In 1920, the first leader of the party in the Commonwealth parliament, William McWilliams, pledged independence from both parties. But that commitment was short-lived.
The politics of rural Australia can be crudely divided between “farmers” and “graziers”, united to some extent by their dislike of the trade union movement. The terms don’t indicate their current agricultural pursuits but are indicative of the historical origins of their attitudes and values.
“Farmers” are the descendants of the smaller farmers who entered the industry following the land reforms of the mid-19th century which were initiated by city-based politicians with a romanticised view of the virtues of establishing a yeoman agriculture. Farmers are stereotyped as public school-educated and rugby league players who are more likely to vote for the National Party.
“Graziers”, in contrast, are the ideological descendants of the squattocracy) and can be stereotyped as private-school educated, players of rugby union and (often) Liberal Party supporters.
Graziers have traditionally been free traders while farmers have been more inclined to welcome government intervention in the marketing of agricultural products.
During the 1950s, the policy aspirations of the then Country Party fitted comfortably with the more paternalistic policies of the Liberal Party which saw high levels of government intervention across the economy.
Over the past 90 years, the Nationals have been prepared to take a stand on issues of concern to their constituency, voting against their coalition partners on more than one occasion. Cracks in the Coalition have frequently reflected the division between the increasingly “dry” economic policies of the Liberals and the tendency of the Nationals to favour government intervention in areas of importance to their constituency.
Contemporary debates such as the sale of GrainCorp, the development of coal seam gas and foreign ownership of farm land all bump up against agrarian notions of the appropriate use of land.
The Nationals have contributed their share of maverick politicians who have been popular and populist advocates of what is known in Australian as “country-mindedness” – a belief in the special nature of agricultural activity and the virtues of country life.
These mavericks have generally become subdued once in the Cabinet. But we have yet to see if Barnaby Joyce will follow this pattern.
As agriculture minister and deputy leader of the National Party, Joyce is already making his views very clear on the bid by American agri-business giant Archer Daniels Midland (ADM) to take over the grain handling company GrainCorp. He is staunchly and vocally opposed to the deal, putting him at odds with treasurer Joe Hockey.
Grain marketing is a particularly sensitive area for the National Party, with an historical preference for collective marketing arrangements and a suspicion of “middle men”.
The export single desk, held for nearly six decades by the Australian Wheat Board and then its disgraced privatised successor AWB Limited, was something of an article of faith for the Nationals – but not so for their Coalition partners. When the Wheat Board was privatised in 1999, the two parties were clearly at odds.
ADM’s A$3 billion bid for GrainCorp is likely once again to highlight the difference between the Coalition partners around issues of the marketing of and trading in primary products. Treasurer Joe Hockey will decide by December 17 whether the deal can proceed on national interest grounds.
Bridging the gap
Foreign investment in agricultural land is another area in which Hockey is likely to encounter opposition from his National Party colleagues. Abbott’s election night pledge that “Australia is open for business” is potentially shaky if the Nationals get their way and agricultural land purchases are subject to much lower thresholds for Foreign Investment Review Board scrutiny.
Past Coalition governments have weathered these policy differences and much of the success of the alliance can be credited to leaders of the Nationals such as Tim Fischer and John Anderson who have not been ideologically too distant from their Liberal colleagues and have taken a pragmatic approach to policy.
Abbott’s natural conservatism and historic associations with Democratic Labor Party figures and thinking may assist in bridging the gap between the more economically liberal of his party colleagues and the position of the Nationals.
Life under a Liberal-led minority government may not be as chaotic as the 43rd parliament, but it may well be just as interesting.
Linda Botterill does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.