Higher prices support free trade

27 Feb, 2002 10:00 PM

STRONG Victorian grain prices during the 2001/2002 harvest were testimony to the successful deregulation of barley and canola, producer Chris Kellock told PGA members at their annual convention last week.

Criticising the long lag of Australian grains industries to embrace free markets, Mr Kellock said the price gains enjoyed by Victorian farmers spoke for themselves.

Comparing Victoria with other neighboring states, he showed Victorian malt barley cash prices lingered around $19.50 per tonne higher than New South Wales and $12.72 per tonne above South Australia.

Victorian harvest cash prices also compared favourably against estimated pool returns (EPS) with the best cash prices falling about $5.00/t under pool price, compared with NSW, which had a price gap of more than $20 between pool and cash options.

Victorian feed cash prices were about $20 ahead of estimated pool returns, and above export parity for most of the year, compared with SA, which was below.

Mr Kellock said farmers living near borers were forced to watch their Victorian neighbours reap the benefits of deregulation, while their hands remained tied by single desk.

He said the Victorian system proved to be superior to others because it gave growers more forward price options with higher forward prices, as well as more cash buyers.

"It is the borders that have made a mockery of this out of date system," he said.

Multigrain contracts proved to be a popular forward selling option for barley with feed priced at $195/t and $240/t for malt at port.

Asked to speak at the PGA conference about risk management in modern agriculture, Mr Kellock said competition offered by a deregulated system was the best way to ensure viability on the international market in coming years.

He said a lot of people were reluctant to change because they felt comfortable in the current system.

He said the change over to deregulation was locked into political processes but hoped the positive results experienced by Victoria would speed up the process elsewhere.

"At the government level there is not a lot of informed debate," he said.

He commended PGA for its forward thinking approach and urged the adoption of deregulated grain industry.


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