Grain Producers Australia concerned merger will impact future of Australia's plant breeding programs

Grain Producers Australia has raised a number of concerns about the proposed acquisition of WA-based plant breeding company Intergrain by Adelaide-based rival Australian Grain Technologies.

In September, Intergrain announced it was in search of a new strategic partner for its wheat program.

This followed Monsanto's decision to walk away from its 26 per cent equity in the company.

After Monsanto's departure, Intergrain became a partnership between the Western Australian state government and the grower-funded Grains Research and Development Corporation.

Australian Grain Technologies and Intergrain have begun formal negotiations on the deal and the two companies say it will strengthen Australian-focused cereal breeding.

Andrew Weidemann, chairman of Grain Producers Australia said he was concerned about the future of Australia's seed breeding business.

"They are two really key breeding companies for Australian farmers and potentially, we have concerns around the ongoing competitive nature for Australian agriculture for the grains they're producing in their breeding programs," he said.

"Over the last decade or more we've seen the breeding programs slowing unwind across Australia.

"I think when privatisation occurred, the seed breeding programs — not just wheat, but all grains — there were more than 100 companies actually providing seed in various forms to the Australian farmers and we're now down to about two."

While Grain Producers Australia has concerns about the acquisition proposal, Mr Weidemann does acknowledge there may well be positives from the deal.

"We also see opportunity in regards to creating a bigger balance sheet for the companies to operate," he said.

"It's really about getting it right [and] making sure that everybody that's producing grain is getting good varieties that are in tune with the market.

"[It's about] understanding what the market wants in terms of the development of these varieties.

"We've got to work out, through industry, a way around ensuring the breeding programs are really attuned to the market place, as well trying to make sure they are sustainable in the environment right across Australia.

"One of the things that we personally like about the breeding program out of WA is that they are quite hardy varieties that are being bred and we have benefitted from those over here on the east coast."