AACL Grain Co-Production 2011 Project


AACL Grain Co-Production 2011 Project
Cash Rebate	3.0%
Closing Date	CLOSED
Minimum Investment	$24,000 (ex GST)
Term of Project	Approx. 5 years
Research		Adviser Edge
ATO Product Ruling	2011/8

AACL is Australia's largest grain production enterprise, investing almost $200m with farmers to grow crops since 2005.

AACL's unique product known as Grain Co-Production, works to contract crops in many different locations. Each investor’s investment units are spread across various locations. The produce from each location is then pooled each season to minimise the risk versus growing grain in one or a small number of locations. This feature has meant that in spite of poor and varied weather conditions throughout Australia, AACL expects that 2010 season investors will receive a positive return.



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Australia is a major source of quality wheat, barley and canola to international markets. Australia’s reputation for quality grain, economic and political stability and proximity to key markets, provides an excellent opportunity for grain investment. International demand for Australia's grain continues to grow unabated, driving grain prices to record highs.

The 2011 Project provides investors with the opportunity to access returns from the Australian soft commodity sector without needing to provide the land, equipment, inputs and expertise.

2011 GRAIN CO-PRODUCTION PROJECT

AACL is currently preparing the 2011 Grain Co-Production Project (Project) in readiness for the retail investor market and aims to raise $10 million to supplement the $57 million already secured for the new season.

AACL will place a minimum of $57 million with farmers in 2011. Work has commenced to contract an estimated 350,000 tonnes for the new season including an expansion into Central Queensland to further diversify geographical risk. The 2011 product offering by AACL has been fine-tuned to deliver an improved balance of risk and return for investors and farmers.

2011 FEATURES

Access to a Major Australian Industry
The Project provides investors with direct access to the grains industry, one of Australia’s most established and significant agricultural industries.

Diversified Crops and Locations
Each season the Project provides investors with diversification of crops (i.e. wheat, barley and canola) and diversification of growing regions and farmers.

Short Term Investment Timeframe
The Project is different to almost every other agribusiness investment opportunity in that it aims to provide investors with a return each year, commencing year 1, whilst their investment period is for four seasons only.

Domestic & Export Markets
Mature and established domestic and international markets exist within the grain industry in order to sell wheat, barley and canola giving investors a degree of certainty in regards to sale and payment for their produce.

Independent Research
Each Project undergoes an independent research report by Australia's leading agricultural research company, Adviser Edge. The 2010 and 2009 Projects were both rated 4 ¼ stars (out of 5). Adviser Edge has been engaged to review the 2011 Project and their report is expected to be finalised in early April.

Key Differences Between AACL Grain Co-Production Project And Other Agricultural Managed Investment Schemes

Short term investment timeframe	Provides investors with annual revenues from crop sales, commencing in year 1, whilst the investment period is for four seasons only -shortest investment period in the sector and annual cash flow.
Diversification of farmers and locations	For the 2011 season, up to 300 farmers from across Australia are expected to be contracted to grow grain for investors -substantial diversification benefits.
Bi-annual cash-flow for the Project Manager	AACLFM receives cash-flow from management fees at planting and harvest each year. The short term nature of growing grain means that the cash-flow of the Projects is regular and the Project Manager is not operating for long periods of time (often years with most MIS Projects) without income -regular investor and manager income.
No capital expenditure or tied up capital	Experienced farmers are sourced to provide the land, equipment, inputs and expertise to produce the crops in the Project and so there is no tie up of capital for either the investors or the Project Manager in items such as land, equipment etc. Also, Australia has an established grain handling, storage and transportation system which requires no tie up of capital from the investor or the Project Manager -no capital investment required.
Mature domestic and international markets for the sale of the Grain	Mature and established domestic and international markets exist within the grain industry in order to sell wheat, barley and canola, giving investors a degree of certainty in regards to the processes surrounding the sale and payment for their Grain -strong existing established markets.
No market distortions by the grain grown in the Projects	The Australian Grain-belt is restricted to rainfall zones and as such, the majority of available land to produce grain is currently being utilised. The Project will only grow wheat, barley and canola on established properties with established farmers and is not expected to grow any more grain than is already currently grown by farmers - no market distortion.
No “tax advantage” over traditional farmers	Investors receive the same tax deductions the traditional farmer does for the costs of planting and there is no financial engineering of either tax benefit or investor return -no tax leakage.
No reliance on water allocations or licenses	The majority of wheat, barley and canola crops grown in Australia are grown on non-irrigated land. The majority of the Crops in the Project will also be grown on non-irrigated land and as such will not have any reliance on water allocations or require access to water entitlements -not dependent on irrigated water.
Partnership with existing producers in a form of sharefarming	Experienced professional farmers are sourced to provide the land, equipment, inputs and expertise to produce the crops in the Project. The farmers share in the upside returns of the crops with investors, thus all parties interests are aligned - alignment of interests between investors and farmers.
High utilisation of investors’ capital in the Project	Approximately 95% of the funds utilised in the Project are utilised for actual Project expenses to grow, harvest, deliver, store and sell the crops -industry best practice.

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