OUTDATED railways are strangling farmgate profits for east coast growers, and action is needed now to lower supply chain costs.
While most people agree increased investment in rail is the best bet, significant improvement appears a long way off yet.
Hume MP Angus Taylor co-authored a report for the ANZ Bank called Greener Pastures: The Global Soft Commodity Opportunity in 2012, before entering parliament.
Mr Taylor said east coast growers "should aspire to knock about 40 per cent" off the current supply chain cost for grain.
"We need to replicate the bulk systems of the mining industry," he said.
"Of course grain is different because it is a seasonal commodity, but we can learn a lot from those systems."
Ignoring the middle
Exporters have pumped cash into grain supply chains since market de-regulation - but their investments have focused on the extremities of the system, resulting in both new and improved ports and some up-country infrastructure.
The rail lines left in the middle are old, slow and expensive.
GrainCorp's estimated "broad average" supply chain cost is about $85 a tonne and rail can comprise up to half of that cost.
NSW's branch line system, which receives grain from up-country facilities, has improved little since Federation.
The Australian Export Grains Innovation Centre 2014 supply chain report found a "high percentage of the Australian grain rail freight moves on lower-efficiency lines with 16-tonne to 19t axle-load capacities, compared with Canadian and US loads of more than 23t.
Higher axle loads mean heavier wagons on a rail line.
Heavier wagons move more grain, which boosts efficiency and lowers supply chain costs.
"From a farmer's perspective, it is embarrassing that we have a Third World supply chain in the year 2014," NSW Farmers grains committee chairman Dan Cooper said.
Canadian grain travels $23/t cheaper than on Australia's east cost network. GrainCorp, which is limited by the rail network's capacity, has 15 train sets each with 40 wagons delivering a total potential rail haul of 4 million tonnes.
GrainCorp spokesman Angus Trigg said most trains carried 20 per cent less than their potential maximum when travelling on poor quality branch lines.
The federal government has promised an inland rail line to finally link Brisbane and Melbourne ports, and Mr Taylor said the scheme was a good starting point.
"It would create new options for growers, but the (project's viability) won't just depend on grain - but it will be a useful part of it," he said.
However, NSW Farmers said the inland rail would be a long way off, and the State government needed to "step up and invest" in branch lines now.
"Lower farmgate prices will occur only if government invests to improve branch lines," Mr Cooper said.
"The status quo is unsustainable. On average, a third of the value of wheat is spent on supply chain costs, and half (of that) goes to rail."
A user-pays model
GrainCorp was investing to increase the efficiency of its up-country storage through its $200 million Project Regeneration, but the benefit to farmers would be limited unless rail was beefed up as well.
"Grain trains that travel at 30 kilometres an hour, half loaded, down a branch line are not tenable," he said.
"Rail is key. You need to haul large tonnages to port. The only way to move that quantity efficiently is by rail."
Mr Trigg said immediate efficiency gains could be had if the NSW government invested in up-country loading sites.
"A lot of rail sidings were built a long time ago and are too short, which means modern trains have to be broken up and shunted off to other sites down the track to be loaded, which costs time and money," he said.
"Sidings need to reflect the length of a 40-wagon train so we can have better loading rates.
"That could deliver some real efficiencies quite quickly."
The NSW government Freight and Port Strategy released late last year predicted the State's freight volumes would double by 2031 and all key corridors would struggle to meet demand "unless action is taken".
Road carries two-thirds of the 400 million tonne freight load, and rail could be a key to spread the burden and boost efficiency.
Agricultural produce makes up 20pc of total freight movement.
Mr Cooper said a user-pays model would "incentivise private enterprise to co-invest with government in the rail network, which would help get it up to the level it should be".