The South Australian grains industry is hoping the proposed plant protein project, announced to significant fanfare last year, will go ahead in some format in spite of the federal government pulling its $113 million contribution to the $378 million project.
Federal industry minister Ed Husic confirmed the government was set to walk away from its pledge last week, saying the project no longer met the guidelines required for funding.
It leaves the plans for the plant in tatters.
However there is some hope the project, set up as a joint venture between the federal and state governments and three private businesses, Australian Plant Protein (APP), TFI and AGT Foods, could still proceed in a lesser capacity after the SA government, which was to contribute $65 million, confirmed it remained committed to further negotiations.
"Our best case scenario would be that the South Australian government will work with the businesses and try and get something up and running," said Grain Producers South Australia chief executive Brad Perry.
"The SA government has written to us officially to let us know they will continue to investigate the viability of the project with two of the three original partners, with one set to drop out," he said.
The identity of those looking to proceed is unknown.
APP and TFI declined to comment on the matter while AGT Foods have been contacted.
Mr Perry said news the federal government was pulling out of the project, which would have been one of the largest of its type in the world and a key market for SA pulse producers was a blow for croppers in the state.
"It is genuinely disappointing, transformational is a word that is bandied about a lot, but something of this scale really had the scope to position SA as a world leader in the plant protein space, which would be great for our pulse sector."
"There are always complexities when dealing with multiple private businesses and we often see government funding allocated under one government withdrawn by the next but we feel it would have been far better to sit down with the partners and work out what they needed to change to get the project happening rather than just pull out."
National farm leaders echoed Mr Perry's sentiments.
"It is really disappointing to see government pulling money out of a project that would have been a real boost to the ag industry in SA," said new National Farmers Federation president David Jochinke.
"We obviously don't know all the specifics of the deal but in this case if the plans didn't meet the guidelines you'd think rather than tearing up the deal the government would work with the parties to work within the required guidelines and get this project, which would be a boost not only for SA farmers but for the entire state of SA, off the ground," he said.
Barry Large, Grain Producers Australia chairman, said the government had missed a golden opportunity to demonstrate its agricultural credentials.
"We keep hearing from the government how they are pro-agriculture, but then in their actions you see things like the proposed biosecurity tax that the farm lobby will have to wear or removing its support from a project like this and it points the other way," he said.
"Obviously this is a major project and the government wants to be sure its funding is spent wisely but surely if it was considered worthy of funding in the first place there can be some work to get things back on track in terms of the eligibility criteria and get the plant built."
Hopes were that the facility would make high value plant protein isolate with faba beans one of the major feed stocks.
Other businesses in South Australia such as Integra Foods, a part of Australian Grain Export have made investment in the plant protein production space, with Integra setting up a dry fractionating plant to extract the protein, a different method to the one used at APP's existing facility in Horsham, Victoria.
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