Grain Pool concerned over 3-year GLA licences

The Grain Pool has expressed its concern over the Grain Licensing Authority's decision to grant two malt barley licences for China, and 50,000 tonnes of feed barley per year, for three years, to the Middle East.

The GLA has approved two malt barley licences for 50,000 tonnes per year, for three years to China, and 50,000 tonnes of feed barley per year, for three years to the Middle East.

The GLA is a state government agency charged with evaluating applications from organisations outside the grain pool to export grain crops, other than wheat.

Its mandate is to approve applications that provide access to new markets, and/or attract a premium price for the produce, and it is used as a means of providing partial deregulation to the local grains export market.

The GLA has received criticism in some quarters for offering too many licenses.

Grain Pool general manager Andy Crane said he was disappointed by the GLA's decision to grant licences so early in the season and for the next three years, before the crop is even in the ground.

"Our key concern remains that the GLA is further relaxing the rules by granting licences for three years where it has been clearly demonstrated that the rules are not tight enough for licences granted in single seasons," Dr Crane said.

"Granting licences before the size of a crop is known and especially before we even have a sense of what the next few years might hold is somewhat dangerous and irresponsible.

"It is Grain Pool's estimate that of the licences granted in the 2005-06 season, less than 20 per cent were actually fulfilled by licence holders.

Dr Crane said the Grain Pool continues to support the concept of the GLA, while it is in the best interests of WA growers.

At the same time PGA Western Graingrowners chairman Leon Bradley has applauded the issuing of the licences for sales of WA barley to China and the Middle East.

Mr Bradley said the licence winner was identified by the GLA as 'having a record of paying competitive prices for WA grain'.

"These are new market opportunities for WA barley growers and whereas the purchasing parcels may be small, they should be regular, stimulating extra cash competition for WA barley," Mr Bradley said.

"It will mean premium cash prices for growers, more flexible buying arrangements and access to WA grain for important new buyers, and a three-year secure term for the licence holder to develop his business."

THE FULL CBH AND PGA MEDIA RELEASES ON THE SUBJECT APPEAR BELOW.

THE CBH RELEASE.

The Grain Pool has expressed its concern over the GLA's decision to grant two licences for 50,000 tonnes of malting barley per year, for three years, to China and 50,000 tonnes of feed barley per year, for three years, to the Middle East.

Dr Andy Crane, General Manager Grain Pool said he is disappointed by the GLA's decision to grant licences so early in the season and for the next three years, before the crop is even in the ground.

"Our key concern remains that the GLA is further relaxing the rules by granting licences for three years where it has been clearly demonstrated that the rules are not tight enough for licences granted in single seasons," Dr Crane said.

"Granting licences before the size of a crop is known and especially before we even have a sense of what the next few years might hold is somewhat dangerous and irresponsible.

"We now have volume granted over successive years with no commitment from licence holders to actually use them. Our question is why create the disruption in the market without forcing licence holders to actually fulfil their licences?

"It is Grain Pool's estimate that of the licences granted in the 2005-06 season, less than 20 per cent were actually fulfilled by licence holders.

"The GLA, Western Australian growers and the Minister should all be asking why there is such a failure rate."

Dr Crane said the Grain Pool continues to support the concept of the GLA, while it is in the best interests of WA growers.

"What we have taken issue with in the past is some of the operating decisions taken by the GLA," he said.

"The Grain Pool has always supported the concept of the GLA provided that the system is robust and sustainable. If licence holders should be in a position to demonstrate and more importantly actually deliver additional value to Western Australian growers, we support their ability to do this."

PGA MEDIA RELEASE
9th May 2006

PGA APPLAUDS GLA MOVE

WA's Grain Licensing Authority has been applauded by WA grains leader Leon Bradley, for issuing the first three year export licences for sales of WA barley to China and the Middle East last week.

PGA Western Graingrowners Chairman Leon Bradley said the licence winner was identified by the GLA as 'having a record of paying competitive prices for WA grain'.

The three-year licences provide for sales of 50,000 tonnes of malting barley per year to China and for a further 50,000 tonnes of feed barley per year to the Middle East, to buyers not deemed by GLA to be dealing direct with WA's Grain Pool.

"These are new market opportunities for WA barley growers and whereas the purchasing parcels may be small, they should be regular, stimulating extra cash competition for WA barley," Mr Bradley said.

"These new licences are an important trifecta," he said. "They will mean premium cash prices for growers, more flexible buying arrangements and access to WA grain for important new buyers, and a three-year secure term for the licence holder to develop his business."

"These are the marketing benefits wheat growers should be able to enjoy."