Tougher standards for agribusiness

A leading agribusiness researcher is hoping to improve the image of the industry by setting tougher research standards.

PIR Agribusiness Research executive manager Tim Bennett says the research process “is getting tighter and we are assessing risk better”.

“We are looking at the upside of a project, as well as the downside, and comparing that with our benchmarks,” he says.

“We also publish what benchmarks are in our reports on a project, so investors can make comparisons.”

PIR has also introduced a rating system for its agribusiness reports, with investment-grade being the goal that promoters are aiming for.

Last year, PIR reviewed between 80 and 90 projects, but only 20 made investment-grade.

“We publish the benchmarks to give promoters of schemes some idea of what to work towards to achieve an investment rating,” Bennett says.

Agribusiness projects suffered a considerable downturn last year due to the ATO’s campaign against tax-driven schemes.

While there are no accurate figures, Bennett says many of last year’s schemes failed to achieve minimum subscriptions or, at best, raised only half of the required capital.

“Part of the issue facing agribusiness concerns is the sustainability of the project and the commissions paid to promoters and advisers,” he says.

“We will see a drop in the number of schemes launched this year, but this will be temporary.”