GGA looks west to build national grains body

26 Feb, 2010 10:23 AM
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THE Grain Growers Association (GGA) is looking to expand its WA membership base and play a leading role in the provision of industry services for the deregulated Australian wheat export market.

GGA CEO, Peter Flottmann, was in Perth last week and spoke to Farm Weekly about the motives behind his company’s expansion plans.

Mr Flottmann said the GGA was seen by WA graingrowers as an eastern states organisation born out of Sydney-based grain handler and marketer, GrainCorp.

However, he said that perception was out of touch with the new direction the not-for-profit organisation was now heading.

“The perception in WA is that we are still joined at the hip with GrainCorp – but we are not,” he said.

“We still have equity in the company but we are absolutely independent.

“Our membership grew on GrainCorp’s expansion out of NSW into Victoria and Queensland but we have a membership model that is challenging us at the moment.

“We are trying to build a membership based on the provision of services to our members; not just growers but also others in the supply chain.

“What’s confusing things a little bit is the business model we are growing out of into the one we want to be.

“Membership in our current structure is important to us but only if it leads to members using the services that our underlying companies provide, otherwise it doesn’t deliver any value for us.”

Financially the GGA is in a strong position with 17,000 members, all grain growers. However, it only has about 50 members in WA.

Mr Flottmann said the GGA operated nationally, irrespective of where its membership base was located.

“Our broader role as per our constitution is to do things that broaden the interests of agriculture, the grains industry and our members and that includes WA growers,” he said.

“We’d like to have more members in WA but again only if those members are clients of commercial services that we operate.

“That’s the ideal outcome for us. To accumulate numbers for the sake of it does not do a lot for members and does not do a lot for the GGA per se.”

Mr Flottmann said the grains industry was passing through a critical settling-in period after wheat export deregulation that presented valuable opportunities for the GGA.

He said during that transition the industry needed to work out what it wanted, how it would operate and what functions it will perform.

“It’s fair to say there’s no silver bullet to any of that,” he said.

“There have been calls for a new entity to provide what we call industry soft services and the US Wheat Associates (USWA) model is one model that has been put forward to adopt.

“These are services that most parts of the industry acknowledge are important but no one wants to pay for them.

“It’s difficult for the industry to make that transition because historically those functions were performed under the monopoly regime.

“It was easier for AWB to amities those costs across a national pooling arrangement, whereas now those costs are a lot more transparent and the exporters are trying to make and create competitive points of difference in their own right.

“While there’s a lack of agreement on which services should be pre-competitive, the transition to providing broader industry support functions is always going to be a bit difficult.

“The question is being raised as to who is doing these services in the industry and some are already being done.

“The GGA is one company in that space and we are doing these things already in many respects but perhaps that’s not recognised at a public level.”

The GGA’s acquisition of the Kondinin Group last year has also been designed to help build the company’s brand and identity in WA, along with its other subsidiaries, BRI Australia and Agrecon.

BRI Australia provides research, training and laboratory services for the grain, flour milling, processing and baking industries.

Mr Flottmann said BRI was active in WA, working with the Agriculture and Food Department.

Wheat classification was an industry good function that has been picked up by BRI on behalf of the Grains Research and Development Corporation.

“They tended commercially for that business,” Mr Flottmann said.

“The GGA is actually funding BRI at arms’ length along with the GRDC to perform that task and we will be keen to see if remains a regular feature.

“There’s recognition at a number of levels that off-shore market development and technical service provision needs to be done.

“The question is, will it get done adequately within individual exporters businesses or do we need another support mechanism to make that happen?”

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