Mixed views on grain stocks disclosure

The CBH grain stocks information survey was conducted online over October and November, with results released in the company’s internal newsletter late last month.

In the survey CBH growers were asked if they supported, opposed or were undecided on whether CBH should be required to provide grain stocks information publicly.

According to CBH more than 700 growers completed the survey with 83pc of respondents opposing the idea and 9pc supporting it, while 8pc were undecided.

Following the release of the results, the Pastoralists and Graziers Association of WA (PGA) last week issued a statement backing the survey’s findings, saying it was an “emphatic rejection for a proposed mandatory grain stocks reporting scheme”.

PGA Grain Committee chairman Gary McGill said the overwhelming response to the grower survey made it clear that such a proposal was not supported by the vast majority of WA grain producers.

Mr McGill said exposing delivery information to world markets would take away a significant marketing advantage from WA growers.

“When this issue came to the fore, the PGA was the first and only organisation in WA to recognise that such a proposal would be detrimental to export orientated WA grain producers and therefore the PGA made a strategic decision to vigorously oppose this bad policy initiative,” Mr McGill said.

“One of the marketing advantages that we have in WA is that the market has to guess a little bit about what the stocks are in WA, we’ve got the advantage so why not keep it?

“Since deregulation of the export wheat industry in 2008, the PGA Grains Committee has applied itself to ensuring that the export grain industry remains as free as possible from unnecessary regulation and as such, has resisted the proposition that the reporting of grain stocks held by bulk handling companies be mandated.”

Mr McGill said while mandatory stocks disclosure in the Eastern States could be advantageous, it was important to recognise the different market circumstances in WA.

“The Eastern States are essentially split between domestic and export markets and so there would be a fair amount of grain stocks floating around through various private grain handling facilities, as well as the bulk handling companies,” he said

“They (Eastern States growers) would allege as growers they’re having some difficulty in making what they would call good marketing decisions throughout the year because they don’t know what stocks are sitting in storage around their State – in WA it’s very different.

“As an export State we’re yet to see the economic argument for WA growers to have all of the stocks held in the bulk handling authority here to be released, particularly in a mandated fashion.”

Mr McGill said the CBH Group’s release of receival and quality information each week on its online LoadNet portal gave growers sufficient information to make good marketing and agronomic decisions.

This year is the first season CBH has released this information to its members, which includes tonnage received by class and port zone and aggregated quality information by grade and port zone.

It comes after ongoing calls from several national lobby groups for Australia’s bulk handlers to improve market transparency.

Among those is Grain Producers Australia (GPA), which has disregarded the CBH Group’s recent survey saying it lacked credibility.

GPA chairman Andrew Weidemann criticised the design of the survey, saying it was poorly constructed to favour the CBH Group’s particular stance on the issue.

Mr Weidemann said more information needed to be provided to those casting their votes in order for the survey to achieve a more balanced result.

“In the context of the way the survey was written, they got the answer they were looking for,” Mr Weidemann said.

“If you put out something it’s meant to have the arguments for all sides so the growers have got a balanced view and I would say that the result they got would be the result that they would expect given the amount of information that was provided in the survey.”

Despite this, Mr Weidemann commended CBH on its release of receival information this harvest, saying it was a “good start”.

He said for greater improvements to transparency, third party information providers should also be given access to this information.

Mr Weidemann disagreed that there was no financial benefit to growers by having stocks information made public.

“Essentially the growers themselves and the consultants that they use – they need to have access to that information so they can advise the growers on the best way forward and the best strategy – whether that be marketing consultants or cropping consultant advisers around crop intentions,” he said.

Mr Weidemann said GPA had conducted its own survey and its members were of the firm belief that there would be significant financial gain to growers if there was a greater level of grain stocks information released.

“The same information that the bulk handler and the trader has, a grower should have the same and so should the advisers – that’s all we’re after, a level playing field,” Mr Weidemann said.

WAFarmers has also weighed in on the debate, questioning the validity of the CBH survey.

WAFarmers Grain Section president Duncan Young said WAFarmers was disappointed that CBH continued to “confuse the issue”.

“We had considered this issue somewhat resolved, as the weekly harvest reporting that is conducted is a necessary first step in giving growers more information,” Mr Young said.

“WAFarmers is against legislated disclosure of stocks information, however the survey results also indicate that growers may not understand what CBH already discloses to grain traders, and what information industry is pushing for.

“The disclosure of grain stocks information has the potential to vastly improve market transparency, allowing for growers to make better informed decisions about their marketing and agronomy throughout the season.

“WAFarmers believes this information would greatly benefit the WA grains industry in the long-term.”

CBH has defended its survey, saying it provided ample information for growers to make an informed decision.

CBH Group general manager of grower and external relations Brianna Peake said the question asked of growers was clear, and respondents were also given the opportunity to provide further comment.

“In an effort to be 100pc clear, the survey also provided a detailed preamble explaining the difference between public stock disclosure and the provision of receival information on LoadNet, which CBH started this season to ensure growers and grain marketers are provided the same information,” Ms Peake said.

“The intent of the survey was certainly not to confuse growers and growers have provided a very clear response that they do not believe the public disclosure of stock information will generate any value for growers.

“CBH is still yet to be convinced of the economic benefit to growers of full grain stocks disclosure to the global market, our long-standing position has been formed through ongoing discussions with our growers and the survey was another way we gather feedback across the breadth of growers to ensure we continued to act on their opinions.”