Strange beasts, these rural managed
investment scheme companies. Here’s Timbercorp pouring millions into a joint
venture to take over Chiquita Brands South Pacific, but Timbercorp managing
director Robert Hance reckons the Australian banana industry is a dud – in
fact, it’s so uncompetitive that it’s not worth bundling into an MIS structure
and flogging off to punters who are primarily concerned about getting an
instant tax deduction.

Being a rather sceptical soul when it comes
to the MIS industry, I would have thought the more dubious a crop, the more
likely it would find itself going the MIS route, but that’s not what
Timbercorp’s Robert Hance told Alan Kohler in an interview for Eureka Report. When
Kohler asked Hance if he planned to parcel up Chiquita’s banana or blueberry
farms for investors, Hance replied:

”Certainly we’d look at that. Bananas? I think, no. I don’t
think bananas are something we’d look at because we don’t see that Australia is
competitive as a banana grower but certainly in the berry side of things and
mushrooms — that would be looked at down the track.”

By the sound of that, it looks like Hance might be betting that
the Australian banana industry might be about to lose at least some of the
protection it enjoys on the basis of quarantine. Bananas could be landed now
from the Philippines for a fraction of
the $12 to $15 a kilo being paid in the shops, but they’re being kept out by
the banana industry’s claims of disease risk – a risk the appropriate authority
has had difficulty justifying.

So does Hance know something? The MIS companies do get close to
government through their energetic lobbying…

In any event, the interview confirmed my suspicion that a large
part of the Chiquita bid is about obtaining new pickings for the MIS process.
As the Austrade website says: “While Chiquita is often referred to as a supplier of bananas, its
horticultural fresh produce is far more extensive. Not only is Chiquita a
leading producer of an array of produce from its farms located in Queensland,
New South Wales, Victoria, South Australia and Western Australia, the company
is also a leading Australia-wide processor, wholesaler and distributor of fresh
produce, dried fruit & nut and fruit juices.”

It looks like a nice plan for further
vertical integration of the MIS crops –
another bite at the cherry, so to speak – with those farms in five
states ripe for tax-plan packaging. Except for the bananas – they must be duds.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey