THE report on the Grains Licensing Authority has come up with just what WAFarmers predicted – a dry economic analysis of one season’s experience, totally missing the triple bottom line impacts.
The social, political and environmental aspects have not been given consideration and these are just as important as the economic rationale.
The real issue that should have been scrutinised is what could happen over time in this type of marketing environment within the Western Australian industry. This has not happened.
Instead we got a one dimensional economic analysis and even that has flaws.
The report subjectively leaves out economic aspects such as hedging costs or losses to the pool and yet includes opportunity interest benefit for cash traders – selective manipulation of the data to derive the predicted outcome.
In excess of 80 per cent of the grain producers in WA want the pool system to exist and be in a strong position as both a floor to the cash trading market and a receiver of last resort.
Growers recognise that a collective cost is involved in a pooling system but it is a far lower cost than total deregulation within an export oriented grains industry.
The report only looks at the grains industry from a high level industry perspective. Individual grain growers are irrelevant in this type of analysis.
What is the social cost of this and what is the flow-on environmental cost to both individuals and the State as a whole?
It is certainly more than the National Competition payments received by the State Government.
Perhaps the NCP payments received should have been put into the pool for compensation.
Market power and price premium need to be redefined in the act because this is causing the greatest issue with subjective interpretation and the issuing of licenses by the GLA.
Trevor De Landgrafft, president
WAFarmers