Working in Partnership with Glencore
In addition to providing farmers with income protection through up front, non-recourse funding, participating in GCP is also a commitment to participating in AACL's grain marketing.
Deregulation in the Australian grains industry and increased volatility in the international grain markets has meant that having facilities to actively hedge grain and provide access to markets, both domestically and internationally, is more important than ever.
GCP grain is managed by experienced grain marketers at AACL in partnership with the trading team at Glencore Grain Pty Ltd (Glencore). AACL and Glencore work together to achieve the marketing objective of ensuring the best possible return to farmers and investors.
The teams work together to achieve the following key objectives:
- Secure a commercially acceptable return to investors in the GCP Projects.
- Deliver a satisfactory performance payment to GCP contracted farmers to the extent that this can be achieved by the management of price.
At seeding time, and depending on the circumstances, part of a farmer’s final income result for the season may be sourced from investors in the form of non-recourse payments and part may be sourced from revenue earned by AACL through the marketing of GCP grain. Farmers that have a net income result that is higher than the Target Value amount, as set out in their GCP contract, will qualify for a Farmer Performance Payment. These payments are distributed from grain marketing revenue earned by AACL Pty Ltd as the GCP Project Manager.
Due to the unique nature of GCP and its objectives for its stakeholders, GCP’s grain marketing program cannot be compared to cash price opportunities or to a traditional pooling product provided by other grain marketers. This is explained in the table below.
