Western Australia’s grain farmers risk losing one of their biggest customers if the state sticks with the Grains Licensing Authority (GLA), according to WAFarmers grain section president Doug Clarke.
Western Australia’s grain farmers risk losing one of their biggest customers if the state sticks with the Grains Licensing Authority (GLA), according to WAFarmers grain section president Doug Clarke.
Mr Clarke’s comments followed an address to the recent WAFarmers annual grains conference by Ahmed Al Sani, general manager of the Saudi Arabian United Feed Company (UFC).
Mr Clarke said Mr Al Sani’s presentation reflected the fears of WA grain growers and the damage the GLA, the body responsible for the issuing of bulk export licences for prescribed grain exports from WA, was having on the industry.
Mr Al Sani said WA’s introduction of licensing was starting to place significant pressure on the premiums UFC obtained for Australian barley within the Saudi Arabian market.
“During 2004 we experienced problems because other local traders obtained Australian feed barley from sources other than the Australian Barley Board (ABB),” he said.
“They blended that with other fair-coloured barley obtained from other countries, and then sold that as Australian barley, but at prices lower than we were able to achieve with barley sourced from ABB, which we had imported at a premium.
“These unethical practices of blending inferior products and then selling as Australian feed barley has not only eroded our market share but from your point of view as Australians has significantly damaged the reputation of Australian.”
But chairman of the WA Pastoralists and Graziers Association’s western grain growers, Leon Bradley, said the claims were “absolute rubbish and completely refuted by studies and reports”.
He said the GLA had commissioned a robust study after its first year of operation, which showed growers had benefited greatly and any objections to the contrary were rhetoric.
Mr Al Sani said if the situation was allowed to continue the reputation, and the premium which Australian barley had previously enjoyed within the Saudi Arabian market, would be significantly affected, if not lost altogether.
“As an importer it is baffling that a nation such as Australia is allowing its reputation to be undermined in such a manner,” he said.
“You are in danger of squandering your hard-won reputation as a supplier of premium quality grains in a major grain importing nation. I can only provide you with the warning.”
Mr Clarke said this feedback from one of Australia’s key barley customers should be sending a strong message to the government and those parties wanting to open up trade.
“We will be working with the Agricultural Minister Kim Chance on ensuring the current system in WA is changed,” he said.
“The GLA is a threat to the reputation of WA grain and as our visiting guest pointed out – we will lose market share if we don’t change things now.”
But Mr Bradley said the best alternative to the GLA was to completely deregulate the industry, as had happened in Victoria.
“We should be able to sell to whomever we want and not be directed by the State Government,” he said.
WA’s Grain Pool is a subsidiary of Co-operative Bulk Handling (CBH) and is the state’s third-largest exporter. It formed a marketing alliance with ABB Grain in 2001.
Mr Chance was unable to provide comment to WA Business News before going to print.