VFF debt: Board advises Grains Group it’s cashing out what’s left of deed poll fund

The Victorian Farmers Federation has written to the executive of the Grains Group advising them of its intentions.

The Victorian Farmers Federation will cash out millions of dollars left in its Grains Group’s deed poll fund to pay down bank debt and money owing to the Australian Dairy Farmers lobby group.

Last May the VFF liquidated its Grains Group’s $9.87 million deed poll share portfolio to cut its borrowings from about $8 million to $4 million.

In a letter sent to the executive of the Grains Group earlier this month, the VFF board stated it intended to use the remaining money as it saw fit.

As of early last year, $5.02 million was left in the fund – expected to earn $225,833 in interest payments annually.

“The VFF intends to utilise the relevant funds in and towards the requirements of the VFF from time to time, as directed by the board, provided always that such utilisation is consistent with the VFF’s purposes,” the letter said.

“This will be no different to how VFF utilises its other property.”

VFF president Emma Germano said the state farming organisation still had considerable liabilities.

“When we liquidated the share portfolio, a portion was used to pay down debt, but the VFF still has a lot of debt so it will be used to restructure debt, and of course we have the ADF liability, among others, that we may need to use the cash for,” Ms Germano said.

The ADF in February had announced it would take legal action to recover $500,000 in unpaid membership fees from the VFF.

The VFF has been actively restructuring to remain financially viable as it fights dwindling member numbers. In 2022-23 it slashed its staffing costs by almost one million dollars and more recently given notice to six national commodity groups it was handing in its membership to save at least $600,000.

The Grains Group has responded to the VFF’s letter, stating on Monday it did not agree with the VFF board’s decision and that it had breached the deed poll agreement again, which states the group must approve the use of any funds by the VFF.

The VFF’s letter outlines that the deed poll arrangements are not legally binding, but it has invited the Grains Group to respond to the VFF’s proposed use of the funds.