PGA calls for deregulation on canola

30 Jan, 2002 10:00 PM

THE Pastoralists and Graziers Association has called for WA's canola industry to be deregulated after canola cheques were slashed $20-$30/t when AgraCorp shut off its cash price early into harvest this year.

This forced WA canola growers to deliver to the pool.

PGA western grain growers committee policy director Damian Capp said growers consistently lost $20-30/t and up to $50/t, dependant on the export parity of the day.

"The upper end of pool estimate ranged between $390-410/t, while at times the export parity was up to $440/t," Mr Capp said.

He acknowledged growers could have locked into AgraCorp's high cash prices earlier in the growing season, which reached $444/t (delivered port) mid-August, $433/t in September and $409/t November.

"But Agracorp are only able to take a percentage of the expected canola crop and trade it for cash," he said.

"If we were deregulated there would be no limit to the cash market because there would be more canola buyers."

During harvest Mr Capp said at one Cooperative Bulk Handling Albany zone receival site he spoke to two farmers at the same bin, one had received $409/t, whilst the other with the same quality grain received $370/t because he had to deliver to the pool.

He said growers needed more options.

According to Mr Capp, the canola price disparity highlighted the shortcomings of compulsory pooling.

"If the agent, or in this case statutory authority, marketing the pool makes the wrong decision, everyone gets it wrong and takes a discounted price," Mr Capp said.

"Canola has never been a prescribed grain in Vic where there are multiple exporters competing for supplies and offer growers many different contracting options."

AgraCorp general manager Alan Dagg defended the scathing attack against canola pooling.

Mr Dagg said AgraCorp was a trading company, but still bought a considerable quantity of canola for cash.

"The domestic market in WA is very small, which limits the cash price opportunities," he said.

"And AgraCorp was not the only one out with cash prices."

Growers were urged not to lose sight of the fact that the pool provided an excellent service across the whole state.

Of the other cash prices available, Mr Dagg said they were close to Perth only, whilst AgraCorp's were statewide.

He said AgraCorp had cash prices through out the year up until the end and he suspected the amount of canola sold for cash to other buyers at the same time relatively small.

"The pool has built up a large customer base which needs security of supply and consistent quality, which will deliver premiums, and growers shouldn't loose site of that," Mr Dagg said.

In addition, the service was always there for growers to deliver to, which was not the case for other private buyers.

WAFarmers grain section president Peter Wahlsten bolstered Mr Dagg's case but said the grain council would look at the issue if prompted by growers, who were backed with the facts.

He said this year was difficult because the canola crop was abnormally low (about .4mt compared to 1mt in 1999/00).

"It all depends on the size of the market and the Victorians get more (better prices) because they have a larger market.

"Generally pools have worked well.

"Pool estimates are conservative at the start and generally end up greater than the cash price."

Mr Wahlsten admitted there were "a couple of anomalies" with the canola market, but warned against the use of the eastern states as a comparison.

"People who put canola in the pool, I think they will do pretty well still," he said.

As both lupins and canola are "prescribed" grains by regulation, not legislation like barley, for lupins and canola to be deregulated WA Agriculture minister Kim Chance would only have to make a decision and put the case to parliament for discussion.

If unopposed it was be passed as law.

The minister was unavailable for comment when Farm Weekly went to print.



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