WAFarmers Forum discusses labour shortage, input prices, supply chain issues and carbon farming

As the COVID-19 pandemic, Russia's war on Ukraine, rising input costs, agriculture's carbon footprint, a proposal to phase out live export and biosecurity threats all continue to affect the sector, industry stakeholders exchanged their views on the year that was and deliberated over the best path forward.

Some presenters looked to the past for ways in which to deal with the events of today, as well as make market predictions on grain and livestock prices, while others reflected that unprecedented times required unprecedented actions by the sector's State and Federal policy and decision-makers.

Held over two days at the Muresk Institute, at Northam, the proceedings kicked off on Thursday afternoon with the annual WAFarmers dinner held at Muresk Hall that evening and the bulk of the conference schedule taking place on Friday.

The WAFarmers grain and livestock annual general meetings provided a summary of the year for each sector, before industry players including CBH Group, Grains Research and Development Corporation, Grain Producers Australia (GPA), GrainGrowers Limited (GGL) and Department of Primary Industries and Regional Development (DPIRD) representatives provided their versions of events and outlined their future plans.

WAFarmers grain section president Mic Fels said the State's grain farmers had been victims of their own success and had done their jobs too well, despite the skilled labor shortages plaguing the industry.

Mr Fels said by WA farmers setting a new record of a 24 million tonne grain crop last harvest, it had made it easy for the government to dismiss the fatigue, burnout and stress which was rife across the industry.

"It's really interesting that our labour crisis is now walking from an acute labor shortage to a chronic permanent labor shortage, as burnt out people start to leave the industry for an easier mining job where they don't have to do the work of three people," Mr Fels said.

"WAFarmers welcomes the new Federal government and our number one ask from them is to set up a skilled immigration taskforce to fast-track visas for skilled workers into Australia in all the major sectors, but especially for broadacre agriculture.

"We need skilled farm operators who come from countries with similar farming systems to ours and that includes Europe, North America and Africa."

In conjunction with GPA, WAFarmers grains council have worked in updating the Federal government's visa skills list to recognise farm machine operators as skilled workers, so a clear immigration pathway could be offered to skilled grain farmers around the world.

Mr Fels said WAFarmers had also been working with the State government to develop an agriculture apprenticeship in WA to help fill the training gap that exists between low level traineeships and high level diploma and bachelor degrees.

"It's no coincidence that our chronic skills gap in the grains industry is in exactly that broad area for which we have no training options presently in WA," he said.

"Our government needs to appreciate that every farmer in this room does actually want to employ Western Australian people, and training and promoting our industry to them as a decent career pathway is desperately needed."

While Australia's unemployment rate is at the lowest point it's been since 1974, Thomas Elder Markets co-manager Matt Dalgleish said low unemployment rates also in the United States, United Kingdom and Europe had led to a tight labour market globally.

With backpackers a key contributor to the sector's pre-COVID workforce, Mr Dagleish said an average of about 180,000 backpackers had been coming into the country, and while about 20 per cent of those backpackers initially stayed working in Australia when the pandemic hit, the number had declined significantly over the past few years.

"We are yet to see the numbers increase and it is going to take some time to recover," Mr Dagleish said.

Bottlenecks in getting WA's grain to port was a major issue highlighted at the conference, with CBH chief executive officer Ben Macnamara presenting on how the co-operative planned to deal with the issue in terms of its transport supply chain and rolling stock.

As the cost of having an inadequate supply chain continues to hit WA farmers back pockets, Mr Fels said WAFarmers had been working with the Pastoralists and Graziers Association of WA and CBH to remedy some of the issues.

"We are going to end up with a lot of grain from last year still stuck in the silos this coming harvest and the market is paying significantly less for our grain, because of the fact that they don't know if they're going to get it onto a boat in time," he said.

"CBH has instigated some good emergency measures this year to get the grain to port more quickly, such as using the grower trucks.

"If you want to know the value of advocacy - as soon as they brought an extra train set into the Esperance port zone we saw our prices gain in excess of $25 per tonne on any grain that wasn't already sold."

READ MORE

While acknowledging $200 million of Federal and State government money had been allocated towards WA's agricultural supply chain over the past year, Mr Fels said much more improvement and investment was needed in the sector's supply chain.

Thomas Elder Markets co-manager Andrew Whitelaw said while grain prices had "gone through the roof" over the past six months, there were some major issues in pricing levels of Australia's grain.

"We have had an extended run of discounted pricing levels that is caused by the fact that we have huge crops and we have logistical issues getting it out of the country," Mr Whitelaw said.

"We have logistical problems for the old crop, but we are still heavily discounted when it comes to the new crop, even though it hasn't been harvested.

"It's probably a sign that the industry is looking at the market and the prices and saying we don't need to pay a premium to buy that grain and also, we might not be able to get it out of the country."

Coupled with discounted grain prices, WA farmers have also seen the price of their inputs, particularly fertiliser, soar over the past 12 months due to a rise in gas prices, partly due to the war in Ukraine removing volume from the marketplace.

Mr Dagleish said China's decision to "technically ban" its exports of fertiliser last year had also taken another large portion of supply out of the marketplace, also contributing to an increase in fertiliser prices.

"If we start to compare the price of wheat in terms of the price of urea - it is the worst in terms of affordability," he said.

"Our big concern is that we have a bit of a cost price squeeze - grain prices have increased but the cost of producing is so much higher.

"Labour is impossible - chemicals, fertiliser and diesel are all expensive - so if we start to see any further falls in grain prices, that's going to be a big issue."

A lack of a transparent and open market within the fertliliser industry was also highlighted as a challenge for the sector, with Mr Dagleish saying a lack of access to data meant the industry's market analysts were unable to do their job.

With carbon farming a hot topic for the industry over the past couple of years, Mr Fels requested the new Federal government consider the option of a carbon 'wallet' to allow farmers to baseline the carbon levels in their soils without having to register their projects with the Clean Energy Regulator or one of the carbon aggregators.

Mr Fels said once farms were baselined, carbon that was accrued from that time forward could be measured and accounted for at some future point.

"The most important reason that governments need to do this is that the current policy is ironically holding people back from adopting some of the practices that can build soil carbon, as there is a strong feeling that the system only rewards people who haven't already been doing the right thing," he said.

"We are not asking for retrospectivity, just that we be allowed to start counting from now and not whenever, or if ever, we decide to justify signing up to a project at some time into the future."

Mr Fels said the move would lead to a much faster uptake of soil carbon practices by the State's broadacre farmers.

The WAFamers grains section have also encouraged the creation of a sustainability platform within Australia through the GRDC's Grains Australia entity.

"In terms of sustainability accreditation the ISCC (International Sustainability and Carbon Certification) program is getting a bit of a throttling grip on the grains industry in Australia and we see that as being European regulation by proxy," Mr Fels said.

"We have world class regulation in Australia and we need to embrace that with a $20 billion or $30b grains industry across the country."

A CSIRO report released in February showed Australia's grain production industry had one of the lowest carbon outputs globally.