Grain stocks information debate remains unsettled

A meeting held in Canberra last week saw grains industry representatives meet with senior policy officials from the office of Agriculture and Water Resources Minister Barnaby Joyce to discuss the unresolved issue which has lingered over the past decade, following deregulation of the AWB wheat export single desk.

Pastoralists and Graziers Association of WA grains committee spokesperson John Snooke said the gathering included representatives from Grain Producers Australia (GPA) and GrainGrowers.

But he said the talks failed to resolve his group’s fears that Mr Joyce was considering legislating to force bulk grain handlers like farmer owned CBH in WA to release grain stocks information to the market, against their will.

“We’re very disappointed but not surprised,” he said.

“The meeting in Canberra was disappointing in that they could not justify their reasons for regulation or legislation.

“They have no number to justify what it may mean, at a farm gate level, for a grower.

“No work has been done in that space and essentially Minister Joyce has decided that making the market transparent for everyone will increase farm gate prices but we strongly disagree.”

Mr Snooke said essentially the WA grain export industry would be giving away its market position, if full grain stocks disclosure was mandated on a public platform.

“We think that puts our grain export industry in WA in a precarious position,” he said.

“Most grower groups are on board but those with expertise in the WA market, who sit between the farmers and the grain marketers – the marketing consultants – they do not want this.

“They see it as a piece of supply side information that, if it’s given too much weight, will force growers to make poor selling decisions.”

Mr Snooke said PGA was talking to grain marketing consultants who had “credibility” on the grain stocks topic and planned to bring them together with CBH to now put forward a position paper for the federal minister to consider, outlining why mandating stocks information would disadvantage the WA grains industry, as a whole.

“The minister’s office has given us a concession that they’ll consider any position put to them and we have to do that because WAFarmers have sold out the WA grains industry,” he said.

“Their policy is based on fear and emotion, not logic.

“I’m going to criticise them strongly because they’ve dismissed the CBH Growers Advisory Council which represents growers and sits below the CBH board.

“WAFarmers are claiming they have a better understanding of this issue than the Growers Advisory Council which supports grain delivery information being released, but that’s completely different to a public platform that displays stocks information all year round.

“The Growers Advisory Council can probably claim to be the one organisation in WA that represents growers completely and has done a very good job on this issue but WAFarmers has dismissed them, as a representative body.”

Mr Snooke said turning around Mr Joyce’s view that public disclosure of grain stocks information would benefit WA growers would be “very, very difficult”.

“All we have up our sleeves is to put an alternative position to him, from WA, which will be happening in coming weeks,” he said.

“I don’t think it needs to go to a third umpire.

“What needs to be respected is the fact growers generate the information and growers should then be asked if the information should be made public or not but that hasn’t been done.

“It’s private information – it’s not public information – and it’s not for the minister’s office or GPA or GrainGrowers or WAFarmers to say this information should be made public.

“The growers have generated this information.”

But WAFarmers Grains Committee chair Duncan Young said Mr Snooke was wrong and the information wasn’t private and Australian growers deserved an open and transparent market, like the rest of the world has to make better-informed selling choices.

“We’d prefer the bulk grain handlers do it voluntarily and CBH, via LoadNet, have offered to make a fair bit of the stocks information available to growers this harvest,” he said.

“We applaud CBH – that’s a very good move – and we think others may follow suit.

“But it’s all about levelling the playing field.

“Grain marketers already get that information and the only ones who don’t are the growers.

“In a deregulated market, you want an open and transparent system and that’s all we’re asking for so it’s simple.”

Mr Young said the stocks information that his group and others were asking be released wasn’t private data.

“As soon as the grain is delivered it’s not your information anymore and it’s not done on an individual basis – that’s where PGA is muddying the waters,” he said.

“This is aggregated, by port zone and grade, by overall commodities so there’s no personal information there at all and that’s what John Snooke and the PGA fail to understand.

“That information is already supplied by the grain handlers to the marketers and the only ones who don’t get that information is the farmers.

“Everywhere else in the world it’s an open and transparent market so why should Australia be any different to the rest of the world?”

GrainGrowers General Manager David McKeon said GPA was taking the lead on managing the grain stocks information policy issue but stressed the grower groups supported each other and wanted the system to work on a voluntary basis, for bulk handlers to release the data.

In 2014, the Wheat Industry Advisory Taskforce - having investigated the value of releasing wheat stocks information in the deregulated market - recommended a voluntary scheme be established.

That Taskforce also recommended about $3.4 million held in a special Wheat Industry Special Account - originally left over from the windup of Wheat Exports Australia in 2012, now held by the Grains Research and Development Corporation - be used to operate a voluntary grain stocks reporting system.

That review process also led to a pilot reporting program being run by the Australian Export Grains Innovation Centre (AEGIC).

A spokesperson for Mr Joyce recently said the minister had expressed his disappointment that the pilot had to be discontinued because not all bulk handling companies supported it.

“The government would always prefer for industry to reach agreement amongst themselves to develop improved arrangements to provide transparency and support decision-making, but is prepared to consider taking a constructive role where that will help drive greater returns at the farm gate,” the spokesperson said.

Grain Producers Australia (GPA) Chair Andrew Weidemann said a push to make grain stocks information reporting mandatory was due to the refusal of bulk grain handling companies voluntarily release their data, during the recent pilot program.

Mr Weidemann says the reporting should include; the total aggregated stocks by grain type, grade and port zone including the total committed v’s uncommitted volumes.

Mr Young said in WA the grain stocks information should be released by grade, port zone and commodity which was “the easiest and simplest way”

“We’re a majority export state – almost 100 per cent at 96pc – so that’s all we need in WA in terms of market information being released,” he said.

“Maybe they need a few different things in the east but they can come up with some variations to suit them.”

Mr Young said he’d ideally like to see the stocks information released weekly which was plausible given the availability of technology.

Asked if Mr Joyce had made the right call by backing the majority of grower groups that wanted grain stocks information released to improve market transparency he said “yes”

“But we’d prefer it wasn’t through regulation,” he said.

“Our first preference is for a voluntary system and regulation is a last resort but if that’s the only option, perhaps that’s what needs to happen.”

Mr Snooke said essentially in WA there has been no demand for the stocks information to be released.

“Since deregulation nobody has been asking for this information because most people realise that making it public disadvantages our export industry and that’s essentially what CBH is saying,” he said.

“They’ve not yet seen any clear benefit demonstrated to them as to why they should make the information public and we fully support where CBH is at.

“CBH is giving out some delivery information which is a good thing and it’s a decision they’ve made but to then go one step further and make the information public, we support them not doing that and hope they fight it, for the benefit of the broader industry and in WA.”

But Mr Young said an open and transparent marketing system relied on the release of stocks information.

“We’ve been in a deregulated market for a while now and believe this is an area that has lacked proper oversight,” he said.

“I can’t argue that you’re going to get another dollar for having that information but at the same time you’re probably not doing yourself justice by sitting in a room blindfolded, which we are at the moment, in a sense.

“Right now growers are the only part in the supply chain that doesn’t have that information.”

Mr Young said the CBH board had developed a better grasp on the grain stocks issue in recent times and had to be congratulated for making the right steps forward, to release more information to growers, this harvest.