AUSTRALIAN Grain Growers Co-op will voluntarily cease trading at the end of the month, following a strategic planning session earlier this year which analysed the future of the organisation.
Formed in 2010, and serving more than 2000 Australian growers and 500 members throughout its time, the AGG board made the decision for a voluntary wind up after seven years, after consulting with industry specialists and former members.
AGG chairperson Richard Konzag said the co-op fulfilled its initial purpose, helping growers through the market deregulation transition.
Mr Konzag said the board was proud of its achievements, but recognised changes in market conditions, such as cash markets, pools and alternative supply chain markets, along with declining membership numbers, were impacting the organisation.
He said a number of members joined when AGG managed the durum grain purchasing for San Remo.
But when AGG ceased managing the account, a number of members were not delivering the required tonnages to continue their membership.
“If growers didn’t meet the criteria, they would no longer qualify to maintain a membership,” he said.
Present members have already received a wind up pack from BRI Ferrier, which requires members and shareholders to vote on the board’s voluntary wind up decision.
Provided AGG secures a 75 per cent majority vote from responding members, Mr Konzag said shareholders should receive some funds returned to them.
But if less than 75pc of votes support the boards decision, it is likely the wind up will proceed to a court level, which could result in a zero return for members and shareholders.
“It is important the growers consider their vote and have a good think about why the board has put the voluntary wind up forward,” Mr Konzag said.
“As sad as it is to see AGG finish up, I think the timing is right and hopefully the vote will reflect that.”
Mr Konzag said the grain market had changed since deregulation came into effect, with additional “players in the market”, and more options for growers such as cash trading outside the normal supply chain.
He said while there were plenty of options, it also presented more risk, and growers would need to be careful who they traded with, and establish trust with new connections.
The remaining operational AGG programs will be managed by trading group Plum Grove, and are expected to finish according to their mandates.
Mr Konzag said the windup was unrelated to Plum Grove, who would continue to operate as per normal.
Member votes are required to be returned by June 28.
The wind up will be handled by insolvency firm BRI Ferrier, and the co-op is expected to cease trading on June 30.