11/04/2016 - 16:00

Grain contribution to WA worth $1bn+

11/04/2016 - 16:00

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Analysis by Deloitte suggests grain growers in the CBH Group network value add $771 million to the state’s economy, while the grain handler directly contributes a further $348 million.

Grain contribution to WA worth $1bn+
CBH Group is the state's largest grain handler.

Analysis by Deloitte suggests grain growers in the CBH Group network value add $771 million to the state’s economy, while the grain handler directly contributes a further $348 million.

That means growers and the handler generate roughly a quarter of Western Australia’s overall agriculture, forestry and fisheries value add.

The report said other benefits, such as from capital investment, were included in the analysis, with CBH’s capital program worth about $1.2 billion in the past seven years.

A further membership benefit, quality optimisation, will generate $349 million of benefits to farmers in the 10 years to 2022, the report said.

There was no detail on whether a cooperative or corporate structure would produce a higher value-add, however.

Grower spending on inputs and intermediate products, which form an indirect economic contribution, are worth nearly $1.5 billion.

CBH’s indirect contribution was $380 million.

The handler highlighted its community contribution too, with about $1.5 million spent on a variety of programs from sport to health and safety, and a further $600,000 in charitable donations across four years.

The cooperative is owned by 4,200 farmers and is one of the state's top 10 largest exporters.

CBH chief executive Andrew Crane said a cost efficient grain supply network was important to the state's economy.

“In the race to supply Asia’s growing appetite for Australian grain, our network tips the field in favour of Western Australian growers,” he said.

“We are the country’s lowest cost grain storage handling and freight provider, giving Western Australian growers supply-chain certainty and a competitive advantage to deliver into the world’s biggest emerging grain markets in South-East Asia.”

“Recent studies including the Agricultural Competitiveness White Paper 2015 reinforce the importance of more equitable access to market supply chains for producers in Australia, and link the loss of control of the supply chain as a significant risk factor for farm gate profitability as growers lose control of the end to end supply chain.”  

It comes weeks after the CBH board fended off a bid to corporatise and list the company by the Graincorp-backed Australian Grains Champion.

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