Barnaby faces backlash on wheat report

27 Dec, 2013 08:45 AM
Agriculture Minister Barnaby Joyce said he supports all six recommendations in the Taskforce report into stocks information.
I also want to know why the federal government waited until Christmas Eve to release the report ...
Agriculture Minister Barnaby Joyce said he supports all six recommendations in the Taskforce report into stocks information.

AFTER ‘burying’ the release of the Wheat Industry Advisory Taskforce findings on Christmas Eve, Minister for Agriculture Barnaby Joyce now faces a backlash from grain growers concerned by the “half-baked” report.

The Victorian Farmers Federation (VFF) and Western Australian Pastoralists and Graziers Association (PGA) have come out swinging in response to both the government’s adoption of Taskforce reporting recommendations and the timing of their release.

Mr Joyce announced on Tuesday he supported all six recommendations in the Taskforce report into stocks information, including monthly stocks disclosure by port zone.

The Taskforce found while there was no market failure in the current levels of wheat stocks information, there would be benefit in improving access to the information.

“I have asked my department to work with industry to implement the recommendations,” Mr Joyce said.

A key recommendation of the report was to identify an independent provider to publish monthly wheat stock information, including total wheat stocks by port zone and the individual volumes of the top three grades in each zone.

Mr Joyce said this would give industry members better stocks information to develop production, marketing and technical strategies, but growers in the west reacted angrily to his support for monthly reporting.

PGA Western Grain Growers chairman John Snooke said the proposed move to monthly reporting “mimics” aspects of the failed wheat single desk system, and could have a significant adverse effect on the competitiveness of West Australian grain farmers, who export 95 per cent of their wheat.

Long-time supporter of the west’s grain industry WA Liberal senator Dean Smith said a voluntary approach to stocks information would be welcomed “at face value”, but warned “anything that has intended or unintended consequences that diminish competition in wheat exports will be challenged by wheat farmers and their political representatives”.

In turn, VFF Grains Group president Brett Hosking said the group had long argued there is a severe lack of transparency on wheat stocks and inventory data, which has hindered real competition in the supply chain.

Mr Hosking said: “As everyone knows, information is power”.

“The lack of information on what wheat is in storage and along the supply chain is driving up transaction costs and reducing returns to growers.”

He said the Taskforce had fallen well short of growers’ expectations.

“The Taskforce delivered six recommendations that fail to ensure we have a fully transparent marketplace for trading up to $5 billion of wheat each year,” Mr Hosking said.

“I also want to know why the federal government waited until Christmas Eve to release the Taskforce’s report, which is dated December 6.”

He urged Minister Joyce to go beyond the taskforce’s recommendations and deliver real transparency to the market.

“The taskforce has recommended monthly reporting of only the top three grades of wheat, but this will create a meaningless mess of numbers,” Mr Hosking said.

“Is the Taskforce seriously suggesting that we only get stock information on just the top three grades of wheat, when there are dozens of grades out there?

“Wheat is priced, traded, and exported across every individual grade, not just the top three grades.

“Anyone who’s done Marketing 101 knows that price is a function of supply and demand, and stocks information is the key determinant of supply.

“We need full disclosure. Not a half-baked set of numbers,” Mr Hosking said.

Mr Hosking said the VFF vehemently disagreed with the taskforce’s finding that “market failure cannot be established”.

“That’s just wrong,” he said. “Market failure is defined as one party having better access to information than others in the marketplace.

“Without full disclosure of stocks, market failure will continue to plague the nation’s grain growers,” he said.

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WA Grower
27/12/2013 11:47:41 AM

reckon east coast growers should also have to release their on farm stocks info. fairs fair eh
27/12/2013 1:01:20 PM

Whatever your view on the topic of stocks information, the final report is generally very poor and lacks the robustness required to provide the competing needs of stakeholders with any real strategic direction.
Rob Moore
27/12/2013 4:31:07 PM

Why should the grain traders have wheat "stocks" reported to them and make their manipulations easier- AUDA will have them mandatorily report ALL contracts - Price Specs and Quantity and anyone in Australia will be able to log in and "Lock in" on a first in basis .True COMPETITION will ensue and the AUDA Single Desk Listing Site - will have all the detail that anyone could ever need without this nonsense above. Total TRANSPARENCY and EQUAL ACCESS for all! What could be simpler or Fairer? Get Barnaby moving on PPP Bill- forget these other silly games that are red herrings like superM codes etc
27/12/2013 6:46:32 PM

It is not hard for the handful of Bulk handlers to work out the harvest size and stock holdings at harvest and beyond as grain goes out of their silos. Why should those 3 or 4 major parties have a monopoly on that information to the detriment of all others including growers? I say report all stock in major bulk handlers silos at harvest with an additional estimate of grain harvested and held on farm and in smaller private commercial silos. Then update that data by deducting exports & domestic consumption on at least monthly basis. No need to separate categories. Just give totals by State.
27/12/2013 6:51:41 PM

Reading this report there is only a handful of growers, represented by PGA WA with a couple of hundred members maximum, who want stock info withheld. All others want it released. Clearly the Minister must go with the majority. But please Barnaby, give out totals of all grain and not just a few categories. There is no reason why just CBH, GrainCorp and Glencore (plus Emerald and Bunge) should have all that data to the exclusion of others.
28/12/2013 6:35:46 AM

No entity has any right to disclose stock information without the Growers approval. Will we see grain accumulators release stock info? i think not. how will significant on farm storage be dealt with? My suppliers will not disclose farm input stock info- why should I disclose production? Time to pull your head in Barnaby!!!
28/12/2013 10:11:26 AM

WA G - wakey wakey 'ol son. If the east coast needs to report their on farm storage shouldn't the WA growers do likewise? I'm not agin U I'm with U. But a common rule for everyone please? All grades should be listed. Just as a recommended minimum selling price should also be listed with a common reference point eg FOB. It seems to be working well for manufacturers as a starting price reference point. So can't see a reason why it can't work for farmers provided they work co-operatively. That I fear is probably the sticking point.
30/12/2013 5:43:28 AM

Smithy, CBH OPS store grain on behalf of growers, they do not own it . As the grower owns it prior to transfer to an Trading entity why should anyone have access to this info without grower approval. I am a WA Grower and also have on farm storage_ I will definitely not be disclosing info on this.
30/12/2013 6:26:03 AM

So X you think it is OK for the trader holding your grain in their silo to have total exclusive access to every detail of your grain but it is not OK for that data to be aggregated to be made public with no mention of your specifics, so that the market can operate openly and honestly for you and all others? Marvelous, just flaming marvelous!
30/12/2013 6:32:27 AM

Mr Snooke, please tell us how much worse it would be, for aggregate totals of all grain stocks to be made public as against all growers private stock details being held exclusively, by the very traders who are expert at using data, only they have, to manipulate markets in their favor?
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