Grains industry calls for inquiry into "billions" in losses

Industry representative bodies such as GrainGrowers and Grain Producers Australia have been consistently lobbying for some kind of review, with Grain Trade Australia, the trade's peak body, resolutely denying the need for an investigation.

However, the data contained within the GrainGrowers report has the two major grain peak bodies, which have had a fractious relationship of late, together with organisations such as the National Farmers Federation and NSW Farmers all singing from the same hymn sheet in calling for reform.

The GrainGrowers paper, presented to government in late 2022 but not released publicly, estimated a value loss to grain growers that could amount to billions of dollars in wheat alone.

GrainGrowers chief executive Shona Gawel said the report provided hard data to back up the calls the industry had been making over the past two years.

"Growers have been raising the issue for some time, and the report provides quantitative evidence supporting the need for government to perform an in-depth investigation," she said.

Ms Gawel said GrainGrowers had outlined a range of options for the Government to consider, including a Senate Inquiry, an Australian Competition and Consumer Commission pricing inquiry, an independent review, or a departmental review by the Department of Agriculture, Fisheries and Forestry, looking at the grain supply chain, from the farm gate to export or domestic end-user customers.

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GPA has previously publicly pushed for an ACCC-led inquiry.

Ms Gawel said the production sector could not sustain the losses in value demonstrated in the report.

"At face value, in wheat alone, the value loss to grain growers could be billions, the enormity of this loss is not sustainable over the longer term should the issue re-surface."

NSW Farmers Grains Committee chair Justin Everitt said growers had long harboured concerns about potential market failure, in particular in regards to potentially anti-competitive practices and a review would help clear the situation.

"There are market failures occurring across the supply chain due to a lack of competition, and there is the real possibility of monopolistic behaviour because of bottlenecks in the system," he said.

"We're out there in the paddock trying to grow food for Australia and the world, but then we're forced to take lower prices because we don't have the supply chains or markets that would allow real competition."

Ms Gawel said she wanted to see cooperation through the grain supply to address the issues.

"The investigation is not a finger-pointing exercise at any individual market participants, but rather a much-needed review in the interest of all players in the value chain."

"A thorough investigation will reveal if there are any supply chain bottlenecks and other barriers for trade participants."

NFF chief executive Tony Mahar supported the calls from GrainGrowers and NSW Farmers.

"These are mind boggling losses that could run into the billions for wheat alone," he said.

"At a time of increasing market concentration across agricultural supply chains, Australian farmers need certainty that no one is using this market power to increase profit at the expense of family farms."

GTA was contacted for comment but could not provide a statement prior to publication, however previously it has said that the three consecutive massive harvests over the past three years have placed strain on the supply chain and have been responsible for the low prices relative to the world market, not excessively high profit margins from within the industry.