Agriculture Minister Barnaby Joyce has backed the "national interest" argument against a $3.4 billion foreign takeover of Australia's largest grains handler, saying it could have driven down local wheat prices and hurt farmers.
Treasurer Joe Hockey rejected a buyout of GrainCorp by US commodities trader Archer Daniels Midland (ADM) in a move that shocked markets and has drawn political and agriculture-sector criticism.
But Mr Joyce said the domestic success of ADM's takeover, which would have transferred 90 per cent of Australia's receival sites to the offshore giant, depended on the trade of Australian grain.
"They could easily sweat out our assets and not even use them and by so doing exploit the grain grower at the farm gate, driving the price down," the minister told ABC TV on Monday.
GrainCorp's share price slipped 22 cents on Friday following Mr Hockey's ruling, and lost a further two cents on Monday, coinciding with the resignation of CEO Alison Watkins, who stepped aside citing the government's "unexpected" ruling.
Mr Joyce dismissed criticism that the government's rejection of ADM would deter future foreign investment.
"We are open for business, but we are not selling the shop," he said.
There were many confusing factors to be considered in the ADM deal, he said.
The trader generates a large portion of its revenue by using subsidised US wheat, he added.
"That means they have to be mindful of the farm politics of the United States and ... that will be making sure that prime markets are delivered to their farmers by their American company."
Mr Joyce said Australian growers had the potential to develop a prime market and achieve top prices.
GrainCorp has said it was relying on foreign capital to grow its business.
Mr Joyce pointed to the company's 2012 annual report and refused to believe GrainCorp had "got to the end of the line".
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