GRAIN growers in WA’s drought stricken north east Wheatbelt are considering sueing farm and financial advisers over the huge losses they suffered on their forward grain contracts this season.
The move was foreshadowed exclusively in Farm Weekly last week when an affected farmer wrote in to express his desire to rally others in similar positions to consider the legal action.
It has tacit support from WA-Farmers, which recently developed a register for growers interested in joining a class action designed to help them recuperate the many hundreds of thousands of dollars lost on washed-out contracts.
After a promising start to the season, many growers entered into forward contracts in an attempt to capture record high grain prices and recuperate lost revenue from the 2006 drought that devastated the majority of WA’s grain growing regions.
However, continued dry condit-ions ravaged production in many farming locations, not just the north east Wheatbelt.
At the same time, grain prices continued climbing at an alarming rate on the back of dwindling world supplies.
As a result, individual farmers suffered some horrendous losses, with reports of growers writing out cheques for up to $450,000, $600,000 and $1 million to solve the problem and finalise their washed-out contracts.
It is understood the WA growers behind the class action are angry that they were not properly advised on the risks involved by so-called risk management advisers and will wait two or three weeks before deciding if they will continue with their case, depending on the level of response to the registry.
The growers are angry because they feel let down and believe that apart from keeping them informed, there were many pre-emptive actions their advisers could have taken to ease the financial loss.
The growers have contacted lawyers and after discussions and advice believe they have a good case for negligence compensation.
The final decision will be based on the amount of money lost on contracts and the number of growers interested in participating in the action.
Approaches have also been made to several legal firms to parti-cipate in the case on a neutral cost basis with legal firms expected to take a slice of the final settlement if the case proves successful, or not charge a cent if the case was lost.
If successful, the local class action could also form part of a national movement, with a similar group of disgruntled farmers in SA and Victoria also investigating their legal options through a similar call to arms among the farming community.
WAFarmers president Trevor De Landgrafft said that WAFarmers had established a register where farmers could provide contacts and details of their contracts.
Mr De Landgrafft said forward grain contracts were a two-way street, and both farmers and their agricultural advisers needed to take responsibility.
WAFarmers grains section president Derek Clauson said agricultural advisers should be responsible for the advice they are giving producers.
“They are being rewarded for their advice and therefore should take responsibility for what they are telling their clients,” Mr Clauson said.
“When you get advice from a professional you expect it to be reliable.”
The Australian Association of Agricultural Consultants of WA (AAAC), formed to provide assistance to the profession and to protection the public, declined to comment.