Foreign and Australian companies jockey for stake in Australia's $100bn agricultural industry WHITE GOLD: SADA president David Basham on his Mt Compass dairy farm, Goonamurra. THE battle for control of the Australian food and agricultural industry has reached a critical stage as foreign and Australian companies vie for ownership control and profits in the $100 billion a year sector. At stake is the prized Asian market as Australia is increasingly viewed as an ideal location to capitalise on the looming opportunities in coming decades. The Chinese market for Australian food and fibre has already doubled in the past three years, rising from $3.5 billion in 2009-10 to $7.2 billion in 2012-13. Growing Asian demand has sparked the fierce bidding war between Canadian, Japanese, New Zealand and Australian companies for dairy producer Warrnambool Cheese and Butter, pushing its share price up from $3.50 a share in January to $8.50 this week. The foreign ownership of Australian food and agricultural companies has drawn a sharp debate in some quarters, including the $3.4 billion bid by the United States owned Archer Daniels Midland for east coast grain handler GrainCorp. Opinion is starkly divided about whether investment in Australia's agribusiness companies is in the public interest as the Federal Government prepares to decide by Christmas whether the proposed GrainCorp takeover is in the public interest. Amid fears that key Australian industries will be dictated to by boardrooms in Shanghai, Tokyo, New York, Toronto and London, the handling and marketing of virtually every rural industry is already dominated by foreign owners and the battle has largely been lost. Foreign companies handle and market between 30 and 90 per cent of the produce in most rural industries, repatriating large amounts of money to overseas parents, all without barely a murmor, yet throwing up several important issues for the nation. While Australian debate has focused on foreign land ownership, it has bypassed the potentially more important debate about who controls Australian industries and how the profits are shared. While many bemoan the lack of a plan for the Australian agribusiness sector, the pressure is mounting for industries to either develop national champions or new structures to help build prosperity and ensure farmers secure a larger share of the profits. While the battle rages, the South Australian dairy sector has taken a unique view of the world by launching SADA Fresh milk in the elusive quest to secure a better future for farmers. South Australian Dairyfarmers' Association chief executive Ken Lyons said he is not sure dairy farmers will ever be price makers, but he is confident that the advent of SADA Fresh will give them more control. Mr Lyons believes that SADA Fresh, especially when a few more dairy products are added to the label, will have a powerful ability to support the SA milk industry. ``We won't solve all our problems, but this is a significant step towards a better future, although it is a different future than the old model of large dairy companies such as Murray Goulburn, Bega Cheese and Warrnambool Cheese & Butter," he said. Mr Lyons said the SADA attempt to improve the profit equation in favour of farmers has implications for all agriculture, especially if consumers continue to show strong support for farmers and regionally produced food. ``There is a definite swing in the community for local and fresh food as we have seen with Spring Gully Foods this year and now Coles is supporting Australian grown fruit and vegetables because consumers are telling them they want to support farmers and local food," he said. ``In my model, we will see more niche state and regional dairy brands offering an increasing range of regional produce. ``The South Australian industry has been moving down this path for a decade or more and has built-up to 41 dairy processors, including the highest concentration of small dairy processors in Australia. Mr Lyons said South Australia has done very well with boutique dairy processors such as B.-d Farm Paris Creek, Fleurieu Milk & Yoghurt Company, the Alexandrina Cheese Company and Tweedvale Milk. ``We hope to help them expand further through support from the SADA Fresh fund that we are developing from our milk royalties," he said. ``The opportunities are quite exciting, we just need capital and partners and an entrepreneurial approach to get it right. We will provide a framework and nurturing environment for farmers and their organisations to move into. Mr Lyons describes the new SADA Fresh model as a terrific confidence booster for the industry and hopes it will help encourage a new spirit of innovation and entrepreneurship among farmers and other rural industries. The SADA Fresh move is a belated step in the wake of major international companies quickly stepping into the breach left vacant by the rapid privatisation of many former statutory and co-operative farm companies including AWB and ABB Grain in the past 20 years. The flood of international companies snaring a large stake of the food and agriculture sector includes multinational giants JBS, Glencore, Cargill, Sumitomo, Bunge, Noble Resources, Wilmar, Louis Dreyfus, Gavilon, Agrium, Marubeni and Mitsui. Whether it is beef processing, feedlotting, dairy processing, flour milling, sugar processing, oilseed crushing or malt processing, overseas companies are dominant. It has raised the critical question of how to ensure farmers receive a competitive international price when a sector is monopolised by overseas companies. Agriculture Minister Barnaby Joyce has said that he would like Australians to own Australian assets as much as possible because it will be in the nation's best long-term interests. The catalyst for SADA Fresh came through a series of circumstances starting about 15 months ago at a meeting organised by Family First MP Robert Brokenshire in Parliament House. A crucial turn in his quest came when Mr Brokenshire wrote to Richard Goyder, the managing director of Wesfarmers, parent company of Coles, requesting a meeting to discuss the supermarket company's decision to sell milk for just $1 a litre. Mr Goyder subsequently met Mr Brokenshire in his Parliament House office in Adelaide and said Coles would be prepared to look at opportunities for joint operations. After more than 12 months of careful planning between Coles and the SA Dairyfarmers' Association, one of the year's cleverest food product launches, SADA Fresh milk was on the market. It offered a new concept for the marketing of farmers products and the chance to provide a better future for the hard-pressed industry through the novel concept to help recoup 20 cents a litre for an industry fund to help improve the viability of farming. Importantly, it helps return some of the money from the food chain to farmers, rather than all the profits going to big company shareholders, as is so often the case.