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Dispute over grain licences

A DISPUTE has erupted between the Grain Pool of WA and the Grain Licensing Authority over the granting of licenses for the bulk export of grains.

The Grain Pool has criticised the Grain Licensing Authority and the process it used to grant four licences to export 190,000 tonnes of feed barley to the Middle East.

The Grain Pool says the move has placed downward pressure on returns and threatens the long-term viability of grower pools.

However, the GLA has rejected this claim, suggesting the rising Australian dollar and freight rates are to blame for lower returns to growers.

The Pastoralists and Graziers Association also bought into the debate by issuing a statement dismissing the claims by the Grain Pool.

The pro-trade PGA said the Grain Pool’s position was an attempt to deny the State’s growers the benefits of competition.

PGA Western grain growers chairman Leon Bradley said that, for the first time since 1939, the Grain Pool, through its commercial subsidiary AgraCorp, was being forced to pay growers a competitive price for their feed barley following the GLA’s granting of special export licences.

“The Grain Pool appears to have contradicted its claims of barley values being eroded by the modest level of competition facing WA. The Grain Pool boosted the feed barley pool indicator by $5 per tonne this week so they cannot have it both ways,” Mr Bradley said.

Grain Pool general manager Dr Andy Crane said that while Grain Pool supported the purpose of the GLA, it was concerned the decision-making process being used was not rigorous enough to identify and protect premium markets.

“The underpinning obligation of the GLA is to increase value for growers and protect premium markets. The licences granted to date achieve neither of these functions but in fact threaten the prices we achieve from the sale of grain into these markets,” Dr Crane said.

Former Grain Pool chief executive Peter Reading said he supported the new structure but did not agree with the way permits had been granted.

He recommended that the GLA be more cautious in its approach.

“There are certain markets you need to be very careful of, like Japan,” Mr Reading said.

He said grain traders were focused on short-term profits, whereas the Grain Pool took a longer-term view.

“Last year when there was very limited crop size, Grain Pool could have made itself look like real heroes,” Mr Reading said.

“We could have sold all the grain to the east coast, because there was a huge drought there, prices would have been high.

“But we would have walked away from the international market.

“We kept supplying those markets, because this year, when you are going to have grain coming out of your ears, you wouldn’t be there again.

“If you are a trader, you are going to be in and out of that market. A trader isn’t going to do any market development.”

Up to 95 per cent of WA’s grain harvest is exported.

The Grain Pool of WA holds the main licence for the export of $600 million of barley, canola and lupin from the State.

The national wheat exporter, AWB Ltd, holds the bulk wheat export monopoly, or single desk.

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