Australia’s oldest company and biggest landholder Australian Agricultural Company has made a bold play to grow cotton on the entire 15,000ha of land to be leased under the State Government’s Ord River expansion next month.
The leading beef producer has been pushing aggressively to diversify its cattle-dependent operations to soften recent blows from a higher exchange rate and troubles in the live cattle trade.
Sources close to the $500 million WA and Federal government-funded project confirmed AACo was one of three remaining proponents in the running for a 25-year-plus lease on the taxpayer-owned Ord land.
Its proposal is to grow cotton, according to the sources, with a private Chinese bidder planning to grow sugar and an Australia backed venture proposing to plant sandalwood.
Sandalwood producer TFS, the dominant grower in Ord stage one, is understood not to be bidding, with growers in Kununurra questioning the suitability of land marked for expansion to grow the scented incense wood.
AACo boss David Farley has history in the industry as the former managing director of Colly Cotton and a former chief executive of US cotton-growing cooperative Calcot. The development came last week as Nationals Leader Brendon Grylls mounted a fresh defence of the $500 million project, after its “food bowl” status was undermined by news the first crops would not be traditional food.
Shadow agriculture spokesman Paul Papalia said taxpayers were right to be concerned about return on investment, given the much-touted food bowl idea had “disappeared”.
Mr Grylls said the expansion, which will double the Ord’s irrigated land to 28,000ha, was simply the starting point for a project that could eventually push into the Northern Territory and cover more than 100,000ha.
Two weeks ago senior Government officials said the State would lose about $100 million on leasing the land.