Australia: Western Australia farmers oppose changes to malting barley standards

Some of Australia’s Central Wheatbelt growers believe they could be forced to give up growing malting barley varieties because of changes to Western Australia barley standards proposed by the Grain Industry Association of WA (GIWA), Farm Weekly reported on July, 30.

The Wheatbelt growers believe the potential new specifications, which would come into play on August 15, would strongly favour South Coastal barley growers whose crops generally produced less screenings due to their growing conditions.

But despite their potential market advantage, a number of Esperance port zone growers also had serious concerns about how beneficial the proposed changes could really be.

In its barley standards overview, GIWA outlined that its Standard Committee aimed to set standards which reflected the requirements of the marketplace and what was best to maximise returns to the WA grains industry, with an emphasis on the whole of supply chain.

In the last week vocal growers took their fight a step further by not only disputing the reasons for each of the proposed changes outlined in the table on this page but by challenging the very role of GIWA and questioning its right to enter into the barley standards debate.

Not only did Esperance grower Mick Fels point to the fact reviews such as this failed to represent both the barley producer and the final buyer on an even playing field, despite GIWA claiming to represent the whole of supply chain, but also that it was in nobody's best interest for WA's malting barley industry to collapse off the back of poorly considered market changes.

Mr Fels said his biggest concern was that a number of references and assumptions within GIWA's review pointed to a significant bias towards the interests of the post-farmgate industry, something which he said was either due to a complete lack of understanding on GIWA's behalf or a complete lack of concern for the implications to the pre-farmgate half of the industry - the growers of the grain.

"It's in both the grower and the marketer's interests to keep the industry sustainable but farmers have more at stake because if the malt industry in WA goes belly up, marketers, generally speaking, have plenty more irons in the fire all around the world," Mr Fels said.

"If growers lose the malt barley industry due to poorly made decisions in WA then that represents a fair proportion of our livelihoods.

"Before deregulation if CBH wanted to change its receival standards to a certain extent, company heads would negotiate with its growers through grower meetings throughout the State.

"GIWA staff are sitting in their office and setting up submission processes without any consultation."

Ravensthorpe barley grower Andrew Duncan also had a long list of concerns surrounding the review.

He said although extremely difficult to pinpoint monetary values, GIWA had failed to provide any kind of cost benefit as a result of the potential changes.

"I realise that what GIWA is proposing probably can't be nailed to a dollar figure but there needs to be a rough range of potential outcomes," Mr Duncan said.

"I'm not saying a review into malt barley standards isn't needed, it probably is because there is a lot of pressure to do so but the possible benefits need to be quantified for growers."

Although not heavily involved in the malting barley export market, Glencore WA State manager Robbie Haddrill said because overseas end-users preferred to buy specific varieties some malting barley exported from WA in recent times may not have necessarily been up to worldwide export standards.

He had also heard mixed responses to GIWA's proposed changes.

"If malting barley standards are tightened to become more aligned with a Grain Trade Australia level, malting barley cargoes will definitely be easier to trade or to use within the market, especially overseas," he said.

But in saying that Mr Haddrill also said he understood where farmers were coming from in regards to the tightening of specifications like screening and colour considerations.

Grower Groups like the South East Premium Wheat Growers Association (SEPWA) believed if the proposed changes to barley standards were carried at the GIWA executive meeting in the middle of next month then marketers should be responsible for providing significant premiums to make it attractive for growers to continue to grow malting barley varieties.

Otherwise there would be the potential for the State's current supply to diminish due to growers moving to more profitable cropping alternatives.

GIWA chairman Jon Slee defended claims there had been no grower consultation in the review process, saying there were two opportunities for farmers to present submissions earlier in the year.

One called for suggestions from industry as to what it wanted from the review and from that a number of issues were flagged for consideration, including the review of screening percentages.

"If the review was happening at a national level there wouldn't even be that level of consultation and GIWA definitely has invited submissions from anybody and everybody," Mr Slee said.

"We have received more than 100 submissions made up of an 80pc farmer and 20pc wider industry contribution."

When asked how GIWA could represent growers and marketers fairly in the review considering both parties wanted different review outcomes for different market reasons, Mr Slee said everybody involved in the malting barley industry had the industry's best intentions at heart.

"It's not in the interest of the trade or the marketers to make things harder for growers but the trade is there to reflect changes that are happening within the marketplace in order to make sure industry can maintain a position for WA malt barley within that market place," Mr Slee said.

"I don't believe farmers have more to lose than marketers in all this.

"If you look at companies like GrainCorp or Viterra that have millions of dollars invested in malting plants then it's a point I'd debate.

"I'd be very careful in saying that the trade or marketers aren't going to lose as much as growers if the malting industry falls over.

"In some ways I think it's the other way around.

"A farmer is going to switch from growing malt barley to feed barley or wheat or canola if it's more profitable.

"It's not as if their paddocks will sit empty.

"Farmers will adapt very quickly as the market changes."

01 August, 2012