AUSTRALIA's grain industry will fall behind overseas competitors unless it has an international body to promote it, Australian Export Grains Innovation Centre (AEGIC) economic and business manager Ross Kingwell has warned.
Mr Kingwell spoke at last week's Innovation Generation conference about global competitors in the grains industry.
He said Australia was facing increased competition as Russia and Ukraine, in the Black Sea region, entered markets that were traditionally held by Australia.
Russia has 76,000 agricultural enterprises, but the large collective farms which are a hangover from the Soviet Union kolkhoz or state farms produce about 70 per cent of the nation's grain.
Last year, Russia produced 102 million tonnes of grains and Ukraine 65mt.
The two countries make up almost 30pc of the global wheat trade, compared to Australia's 10-14pc.
"The Black Sea region is blessed with fertile soils, a mostly favourable climate, cheap labour and is modernising the supply chain which means the cost of production will be further reduced," Mr Kingwell said.
"High shipping costs are also no longer a competitive advantage for Australia due to decreasing rates and increasingly fuel efficient ships."
He said as Australia was not a dominant force in market share and was not a low cost supplier, it would need to heavily promote its premium quality grain.
"Our grains are positioned in the premium high end and it is important that we don't move to the back of the queue to fill leftover markets," he said.
Australia should look to countries such as the United States and Canada and model organisations such as the US Wheat Associates and the Canadian International Grains Institute (CIGI) to promote and market Australian grain overseas.
He said CIGI was funded in several ways; through a voluntary private levy, federal government funding, and by Canadian trade members and offered a range of paid-for services.
"These organisations are supported by government and industry and are representing the interests of Canadian and US grain growers and their industries," Mr Kingwell said.
"There is no Australian equivalent for Australian growers. You could argue that this was the role of AWB prior to deregulation but there is no singular organisation that captures the promotion and interests of Australian grain growers."
He said grain traders including CBH, GrainCorp and Glencore were trying to promote Australian wheat but were limited in resources and some were pulling back on this investment.
"For the multinationals, Australian wheat is just one of their markets and you're in the business of trading grain and making sure your customers get access to grains at a good price which can be in conflict to what Australia is offering.
"Anecdotally, our international customers also want an independent interaction rather than a trader."
Mr Kingwell said an organisation that promotes Australian grain "doesn't need to cost a lot" and could use resources that were already available, such as federal government Austrade representatives.
"Although Austrade represents the wider Australian industry they don't necessarily have great expertise in representing the grains sector," he said,
"Given the size and importance of this industry to Australia, there is a place for such a body to promote it and it is not solely a government, farmers' or traders' responsibility, all parties need to have a response to this organisational competition from other countries."
Grains Research Development Corporation or even AEGIC could be considered for the role.
"Strategically, AEGIC is a likely organisation to be considered for this with a clear mandate from industry," he said.
Mr Kingwell said it was important for Australia to get on the front foot as Argentina was an emerging competitor in the southern hemisphere.
"Argentina removed its wheat export tax last year and there has already been a response by wheat growers to increase wheat plantings," Mr Kingwell said "Unlike Russia, Ukraine and Canada, Argentina is a southern hemisphere competitor, which means the volume of wheat becomes available at a similar time to us.
"In previous years the strategy was to get our grain to port as quickly as possible. That strategy, although valid, is going to be somewhat challenged by the availability of Argentine wheat."
He said satellite countries in Eastern Europe also saw agriculture as a growth sector and were committing resources to the sector and improving logistics.
Mr Kingwell said Australian farmers should "continue to do what they do well".
This included staying informed of market developments, new technologies, innovations and farm practice and issues that could affect their operations.
Farmers also need to use their political muscle to ensure their organisations, political representatives and the government introduces policies that worked to their consistent advantage.
Despite increased global competition, Mr Kingwell said the additional grain being grown was good for global food stocks.
"There is a growing demand for grain to ensure food security. Without this additional supply, we would be in a much more perilous position in terms of global food security," he said.
