OLD battlelines are being re-drawn by feisty and familiar foes over a new push to try and force federal regulations onto the Australian grains industry.
Agriculture Minister Barnaby Joyce has expressed sympathy towards a fresh move by national grain farming leaders - if they largely articulate a unified position - to use federal red tape to make grain stocks information reporting compulsory.
The merits of reporting stocks data has been a long-standing battleground since bulk wheat exports were first deregulated by former Agriculture Minister Tony Burke in 2008, in response to the AWB wheat for weapons corruption scandal.
But varied views exist on whether publicly revealing that information can deliver the promised broad industry benefits, with grower groups believing it improves farm-gate returns and bulk grain handlers disagreeing.
That fragmentation has continued to stifle the progress and implementation of a robust and credible stocks reporting scheme for close to a decade.
In 2014, the Wheat Industry Advisory Taskforce - having investigated the value of releasing wheat stocks information in the deregulated market - recommended a voluntary scheme be established.
That Taskforce also recommended about $3.4 million held in a special Wheat Industry Special Account - originally left over from the windup of Wheat Exports Australia in 2012, now held by the Grains Research and Development Corporation - be used to operate a voluntary grain stocks reporting system.
That review process also led to a pilot reporting program being run by the Australian Export Grains Innovation Centre (AEGIC).
But Grain Producers Australia (GPA) Chair Andrew Weidemann said the latest move to push Mr Joyce for new legislation to make grain stocks information reporting mandatory was sparked by the refusal of bulk grain handling companies (BHCs) to voluntarily release their data, during the recent pilot program.
He said the two federal representative groups GPA and GrainGrowers were now in ongoing talks with Mr Joyce on how to resolve the issue.
“We’re in agreeance with GrainGrowers that it needs to happen and the only way it could work is to make it mandatory to release the stocks information,” he said.
“The process has basically drawn to a halt because the bulk handers are not prepared to give up their stocks information.
“This was something that should have been designed and implemented at the point of deregulation in 2008 so that we had transparency in the supply chain and bulk handling companies didn’t have an advantage over all the other traders.
“The minister is waiting for a response from us on the details but we want to ensure it happens sooner rather than later, so we need to get onto it.”
In a recent member update, Mr Weidemann said GPA believed grain stocks information should be mandatorily reported, on a weekly basis, and supported by legislation - or another mechanism to achieve the equivalent reporting outcomes.
He said the reporting should include; the total aggregated stocks by grain type, grade and port zone including the total committed v’s uncommitted volumes.
Mr Weidemann said GPA was prepared to support annual reporting of on-farm stocks reporting, as currently conducted in ABS surveys and released in January-February each year.
“However, it is important not to be unduly diverted by the on-farm stocks impact in this matter because on-farm stocks is a relatively small component of national stocks,” he said.
“GPA believes that better stocks reporting will lead to an increase in grower returns and an overall reduction in risks to growers, from having improved grain stocks transparency and reporting greater competition will create more transparent price signals.”
Pastoralists and Graziers Association promise a fight
Pastoralists and Graziers Association of WA grains committee spokesperson John Snooke said he “strongly disagreed” with Mr Weidemann who failed to understand grain stocks data was private information.
“If they go down the regulation path on this issue there will be a fight,” he said.
“We’ve been invited to discuss this issue with some federal Liberal members in WA who also have serious concerns about re-regulating the wheat industry.
“I see this as a repeat of 2012 when the same groups on the east coast tried to retain the WEA and expand its functions to include jobs like grain stocks reporting.
“But in WA we believe making stocks reporting compulsory would be detrimental to our industry.
“It is private information and it can’t be forced from growers.”
When the last big battle over wheat exports regulations erupted in 2012, the PGA was also a central force pushing the issue which threatened to de-stabilise the Coalition amid threats by some Liberals to cross the floor and vote against Nationals’ colleagues, as the final legislative vestiges of the single desk were removed.
Mr Snooke said the PGA was holding talks to reach a consensus position with the WAFarmers grains committee, believing hardly any growers in WA would be prepared to give up their stocks information voluntarily.
He said 99pc of growers also trusted and backed CBH’s position opposing the release of stocks information.
“We won’t give up on this,” he said.
“We feel the issue of grain stocks information was resolved in 2012 when the levy-funded WEA was dissolved and underlying legislation on accrediting wheat exporters was finally removed.”
Mr Snooke said the Australian grains industry shouldn’t be looking towards government to solve “petty arguments” and warned against “re-opening this can of worms”.
He said if talks with WAFarmers failed to reach an agreement opposing a legislated mandatory system of grain stocks reporting, it would not change the PGA’s argument or position, based on principle.
But Mr Weidemann said the PGA didn’t fully understand the context of where GPA was coming from.
He said the dairy industry was a prime example of the “perils” associated with not understanding proper pricing signals and lack of price transparency in the supply chain.
“Supply and demand is one thing but what we’re doing is looking to ensure we get better returns through proper competition, around pricing,” he said.
“The bulk handlers will go off their tits and will play all sorts of tricks – like trying to get growers who don’t understand the issue to talk about it publicly – but it has been looked at by a panel of experts and the minister is comfortable with it.
“It’s a work in progress but we’re going back to the minister with all of the details he’s asked for, in another sit down.
“The minister has been very supportive of what we’re trying to do.”
Barnaby Joyce unhappy with pilot protest, by bulk grain handlers
A spokesperson for Mr Joyce said the minister supported greater market transparency in the grains industry, to benefit all supply chain levels, and had recently discussed the issue of grain stocks information with grain grower representatives.
“There are surplus funds previously collected from wheat exporters available for projects that benefit the industry,” the spokesperson said.
“With the Minister’s approval, this could be used for stocks reporting purposes.
"A small amount of funding was provided for the voluntary stocks reporting pilot.
“The minister expressed his disappointment that the pilot had to be discontinued because not all bulk handling companies supported it.
“The government would always prefer for industry to reach agreement amongst themselves to develop improved arrangements to provide transparency and support decision-making, but is prepared to consider taking a constructive role where that will help drive greater returns at the farm gate.”
GrainGrowers spokesperson Dave McKeon said it was important any grain stocks reporting scheme delivered real value and benefit to growers which meant timely, frequent and comprehensive information.
Mr McKeon said once there was a clear net benefit, “then we need to look closely at the costs involved as growers will ultimately bear the cost burden”.
He said GrainGrowers believed the right stocks reporting scheme could help make a more level playing field in the grains market but it would require all bulk handlers and traders to participate to get real value from a scheme.
“Grain stocks information is just one of the many industry good activities that require consideration and certainty through sustainable funding models,” he said.
“GrainGrowers efforts are currently focussed on the development of the Australian grains industry strategy, and it’s important we as an industry get this right.
“The strategy will determine what industry good services and information is required to grow the industry and once that’s in place, we can talk with the trade about the details of a stocks information scheme.”
Bulk grain handlers oppose releasing stocks information
GrainCorp corporate affairs director Angus Trigg said it was unclear what benefit was being sought through mandatory stocks disclosure and no clear case had been made as to any compelling benefit it would deliver for growers or Australian agribusinesses.
“In fact, further disclosure risks giving a big free kick to global buyers by reducing pricing tension – this would have the effect of lowering bids,” he said.
“There is clearly sufficient information already available, as demonstrated by the large number of bids posted every day for grain in our network.”
A CBH spokesperson said the WA farmer owned co-operative had made its position on the disclosure of stock information clear over the years.
“CBH is a co-operative focused on creating and returning value to the grain growers of Western Australia - with this focus in mind, we are yet to be convinced of the benefit to growers from advising buyers of the stocks in the CBH network,” a statement said.
“In short, we have not been made aware of any new evidence that suggests Western Australian growers, in a 90 per cent export-focussed market, will realise value from the disclosure of stock information to the global market.”
GrainCorp managing director Mark Palmquist recently expressed a lack of enthusiasm about releasing increased amounts of his company’s stocks information.
“It is difficult to give volume outlooks without prejudicing our own commercial information,” he said.