Nicoletti looks to offload farmland

03 Jan, 2013 03:00 AM
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WA's biggest grain grower John Nicoletti is positioning himself to sell up to 81,000 hectares.
WA's biggest grain grower John Nicoletti is positioning himself to sell up to 81,000 hectares.

WA'S biggest grain grower, John Nicoletti, is positioning himself to sell up to 81,000 hectares of his 142,000ha (owned and leased) landholding in a potential deal that could fetch tens of millions of dollars.

Like a number of large scale grain enterprises recently sold in WA, including the highly publicised string of Joyce properties near Lake King in the eastern Wheatbelt, the bulk of Mr Nicoletti's hectares are expected to be snapped up by Beijing-based buyers looking to create secure food supply chains for China.

Mr Nicoletti is best known as the State's largest grain grower, whose investments include the owning and running of four substantially sized farms at Bullfinch, Moorine Rock, Westonia and Mullewa, as well as a leased broadacre property at Marvel Loch and three more in the Esperance region.

But according to Mr Nicoletti, it could all be up for sale for the right price.

When Farm Weekly spoke with him at the start of the week, Mr Nicoletti confirmed the potential sales but due to a number of signed confidentiality clauses, couldn't name the interested buyers.

"We are in initial talks with various people at the moment including a Chinese company and the Qatar Government," he said.

"And a number of them are very keen."

Mr Nicoletti also confirmed it was him who had actively sought to sell off his farms in the face of the State's rural debt crisis.

"Whether something will definitely come of our talks is yet to be seen but there's just not enough money in the farming game anymore," he said.

"Politicians and big businesses in this country are more than happy to place a higher value on motor cars and luxury items than food.

"People are quite happy to pay exorbitant prices for fancy jewellery but refuse to do the same thing for one of life's very few necessities - food."

Mr Nicoletti pointed to the iron ore industry as an example.

"The price of iron ore has again sky-rocketed in the last month," he said.

"And by comparison sheep prices have come down by about $50 a head."

In 2012/13 Mr Nicoletti ran 35,000 sheep and planted 53,000ha of crop across his eight WA farms.

"I'm happy to get rid of the lot and retire," Mr Nicoletti said.

"I've entered these negotiations still demonstrating a return on capital, which nobody talks about anymore."

But there was no denying a severe lack of water due to unpredictable winter and spring weather patterns had Mr Nicoletti facing financial pressure like the majority of the State's grain growers.

"Australia is an export country," he said.

"We're a manufacturer and producer of fine food when we have the water.

"It's little wonder so many eastern Wheatbelt growers have their backs against the wall.

"Unfortunately, sometimes we don't get enough rainfall to grow a lot of grain but when we do, especially in marginal country, it's of very good quality and it still gives us a pretty good return on investment."

After listening to local rural media commentary over a number of years and speaking with a range of potential sale agents Mr Nicoletti realised just how serious the Chinese were in their bid to secure WA farmland and decided to "put up his hand" for a bite of the action.

"I can't rely on my 73 or 74 neighbours to buy me out because I don't think they could," he said.

"We're all in the same boat.

"They're subject to the same input costs and unreliable weather as me."

Mr Nicoletti told Farm Weekly he was confident the potential investment by a foreign entity into such a large WA landholding could only be a good thing.

But he did wonder how the potential buyer would manage its staff.

"What happens with the leased country will depend on what kind of role the buying company wants me to play in the future I guess," Mr Nicoletti said.

"I'm not ruling out some type of hands-on involvement in the deal down the line.

"Knowing my luck, the new buyer will have 10 brilliant seasons and say, I don't know what that Nicoletti bloke was whingeing about."

Although it was tipped a Chinese entity would more than likely snap up the land offering, the Qatar Government had also taken part in serious and ongoing discussions with the Nicoletti family.

In April last year Qatar-based company, Hassad Food, purchased 15,000ha at Jerramungup to bring its total Australian landholding to 200,000ha.

But without a foreign ownership register, it was extremely difficult to find out how much WA land was in fact owned by Chinese or Middle East property and agricultural entities.

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READER COMMENTS

Rex Davis
3/01/2013 8:05:52 AM, on Queensland Country Life

Why do we have to sell more of Australia to the Chinese?
Bushfire Blonde
3/01/2013 8:56:23 AM, on Queensland Country Life

Well if our "friends " in the RBA lowered the base Interest rate to that of most of our international competitors, it would be a considerable help to debt-laden rural producers. And if our "friends " in the Federal Government got rid of the tax on wages in the form of the Compulsory Superannuation on wages (instead of endeavouring to increase it from the present 9pc to 14pc), it would be a considerable help in employing assistance in our rural businesses. And if our "friends" in the MLA got rid of the compulsory NLIS, there would be considerable savings to the livestock industries.
Dunart
3/01/2013 9:22:01 AM, on Farm Weekly

Time for foreign language classes.
andrew
3/01/2013 9:39:51 AM, on The Land

The Australian Govt should buy back this land from Nicoletti.
johnirrigator
3/01/2013 9:59:44 AM, on Farm Weekly

GO Green/GO hungry? "new slogan" GO Chinese/Go Hungry in our own country.
Dunart
3/01/2013 10:28:31 AM, on Farm Weekly

How about free trade on our buy side, Andrew. Just some regulation changes needed, no govt funds needed. Let's start with the same free trade regulations. We have when we sell!
dg
3/01/2013 11:42:53 AM, on The Land

Brilliant idea from the buyers, they can produce food and sell it to themselves for below market prices with the grain grown and shipped directly to the owners. This will take out a huge chunk of demand from the open market and likely push prices down for everyone else. Final thought. Why do we need to sell the land, why not put in place long term leases.
Still have family farm-Just.
3/01/2013 11:51:56 AM, on Farm Weekly

This should be a wakeup call for all in WA. John is a pretty successful operator, if he is selling up what hope is there for the average farm? Will someone please buy my sheep for something close to cost of production, the banks don't want to wait for the supposed bright future in agriculture. Even with off farm income added in, the figures are grim with the current value of livestock. Year of the Farmer was a joke on us. I dont want to be a miner that lives in the city but what else is there? Or is it part of an evil plan to get me off the land my family has caretaken since 1892.
Crackalackin
3/01/2013 12:01:35 PM, on Farm Weekly

No way shoud it be allowed to be sold to foreign 'investors' AND - why shoudl the Aust Govt buy the land from Nicoletti ? Why - like every other farmer - shouldn't he have to sell it the best way he can - to an Australian buyer.
Jack
3/01/2013 5:06:37 PM, on Stock Journal

The Australian government needs to put a ban on foreign investment in Australian land. Does China allow Aussies to buy productive agricultural land in China? Australia needs to retain ownership of our land. We've just about lost manufacturing and mining. We can't afford to lose agriculture too.
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