Grain Pool of WA (GPWA) canola and lupin marketing manager Rob Dickie said industry was working with Federal Government to manage the situation.
Diplomatic efforts are also under way to inform Japan¹s government that management practices were being put into place to prevent further detections of contamination.
Mr Dickie said after three violations a country could be banned from exporting to Japan.
³We have had four now from Australian canola so we are in deep trouble,² Mr Dickie said.
He said Japan was GPWA¹s largest canola market and while there had been no violations through the CHB storage and handling system, three exporters had been caught ‹ one twice ‹with fenitrothion in Australian canola since May.
Mr Dickie said that as part of a competitive strategy, GPWA provided declarations and test results before shipping canola to Japan.
In May last year Japan introduced a ³positive list system² for 799 different chemicals in agricultural foods such as grain, vegetables, fruits, nuts, honey, water, seed and animal foods.
Of the 799 chemicals, 762 have never been tested before.
Some of the MRLs have a much lower maximum level of acceptable residue while in other cases they are higher than tested in Australia through the National Residue Survey (NRS).
Mr Dickie said Japan¹s new MRL list was also picking up its own producers, with some of their pumpkins and strawberries testing positive.
He said Japan¹s government was ultra food safety conscious and wanted to protect the integrity of food for its 128 million inhabitants.
CBH Better Farm IQ manager Dave Jeffries said the NRS only tested for 7pc of the 799 chemicals on Japan¹s new positive list and it was time for the WA industry to consider its options on chemical residue management into the future.
CBH had identified groups of high-risk chemicals and had employed external resources for advice and had implemented a risk management strategy.
Mr Jeffries said there were several options to adopt in face of Japan¹s new MRL list, which included doing nothing, tightening legislation, relying on exporters, relying on bulk handlers or a to have a proactive industry approach, which was preferable.
He said it was much cheaper to test a small batch of grain from a farmer who had accidentally contaminated some grain than test the entire crop.
³It needs cooperation which is a low cost easy way to implement the solution but it does require a change in the way the WA agriculture industry deals with off label chemical applications,² he said.
Mr Jeffries said some farmers had already contacted him when becoming aware of a possible contamination.
³A proactive industry approach works,² he said.
Mr Jeffries said doing nothing was not an option and neither was relying on bulk handlers or exporters to ensure there were no further cases of contamination in export markets.
He said a Canadian exporter was responsible for two of the four recent fenitrothion violations of Australian canola to Japan.
³What motivation do they (exporters) have to protect and manage the integrity of the WA supply chain?² he asked.
Mr Jeffries said Japan had paid the domestic premium cash price of $500 a tonne on the back of last year¹s drought.
³Although they have decreased the demand of Australian canola this year they were prepared to pay values well above Canadian values to secure some of the WA canola,² Mr Dickie said.
³We are there as an alternate supplier to Canada because Japan does not like to rely on a single supplier.²
Mr Dickie estimated the cash price for canola would not be as high as the magical $500/t but more likely in the vicinity of $410/t-$450/t.