Few agribusiness schemes pay out

A survey of agribusiness schemes has shown only eight of the 140 projects in the past two years has paid a return while only 29 projects were on target to pay an above forecast return in the next few years.

The survey, conducted byAustralian Agribusiness Group, approached 46 agribusiness responsible entries that look after 140 projects in a variety of crops.

AAG research manager Tim Lee says a large number of projects, especially timber, were in the gestation phase and it was too early for them to make returns.

The three projects that have paid higher than forecast returns included Palandri’s US wine project, Blaxland’s Old Mundulla wine scheme and Margaret River Watershed Premium Wine project.

Four schemes have paid a lower than forecast return to investors. These were Palandri’s two Margaret river wine projects, Australian Pastoral Investments cattle project and Blaxland’s Cowra Crossing wine scheme.

“The data for projects that have not yet paid returns to their investors was dominated by the timber industry,” Lee says.

“A total of 66 per cent of the projects that haven’t paid returns were timber, 17 per cent olives, 10 per cent wine grapes and 6 per cent other agribusiness schemes.”

The returns to investors from all these projects ranged from 10 to 16 per cent.

Lee says it is hard to draw any hard conclusions from this first survey as 30 per cent of responsible entities did not reply.

“The responsible entities who did not to return the survey were responsible for 93 projects or more than 71 per cent of the surveyed projects,” he says.

Lee says the big test for agribusiness schemes will be in the next two to five years when most horticultural projects come on line and many timber projects are harvested.

AAG plans to produce the agribusiness returns survey annually.