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 No need for wheat quality body: GrainCorp 

No need for wheat quality body: GrainCorp

11 Mar, 2010 11:12 AM
GRAINCORP has weighed into the wheat quality debate, saying that an overarching body promoting Australian wheat is unnecessary and would represent an additional cost to growers.

Recently, AWB spoke out on the issue of declining wheat standards and both the Victorian and Western Australian Farmers’ Federations have come out backing an "industry good" body to promote Australian wheat.

However, GrainCorp corporate affairs manager David Ginns said while pre-commercial work such as wheat classification was crucial, promotion of wheat could be done by the various marketers.

“What we have to understand was that under the single desk, AWB was promoting themselves, not Australian wheat.

“We think that a commercial desire to sell wheat by individual companies will serve as a good promotion for Australian wheat.

“For example, we sent over three people to the international millers’ conference in Turkey last year as a commercial exercise, to promote GrainCorp, and by extension Australian wheat.”

Mr Ginns said he believed those pushing for a promotional organisation were looking for a way to socialise marketing costs.

“Generally I think those who want a non-commercial industry good body are people who want a free ride.

“There needs to be a line drawn somewhere, growers are being stung for all these costs.”

He said the issue of wheat quality was different than it used to be under the single desk.

“You can’t replicate what worked with the AWB system, that system specifically suited the monopoly, but now it doesn’t make sense to over-regulate the industry.

"We continue to be perplexed by the push from AWB and the state farmer organisations for more regulation of an industry that is over regulated.

"Reducing regulation will make the industry more efficient and more profitable for all participants, particularly growers who ultimately pay for the cost of regulation and inefficiency from their profit margins."

He said that the issue of wheat quality decline was due to individual cases.

“There is a mistaken impression that under the single desk ‘quality’ was higher than it is now, and that’s not so.

“Some buyers were the beneficiaries of AWB delivering wheat that was over specifications, and now are having to adjust their processes or specification higher standards, and pay full value for wheat, which is to the direct benefit of growers.”

In terms of pre-commercial work, he said Grain Trade Australia had a big role to play.

“GTA can handle all the non commercial stuff, things like wheat varietal classification, which needs to be independent of traders and breeders.

“GTA sets the receival standards and varietal classification would be a natural spin-off for it."

He said GTA had members right through the supply chain and would be ideally suited to the role.

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“What we have to understand was that under the single desk, AWB was promoting themselves, not Australian wheat” – Perhaps David Ginns needs to google the word monopoly? The AWB was the face of Australian wheat and under a single desk marketing system they are one in the same. “We think that a commercial desire to sell wheat by individual companies will serve as a good promotion for Australian wheat” – Oh yes the commercial desire to sell off blended Australian wheat of inconsistent quality into global markets where the Australian wheat traders are all competing against each other for very slim margins has served the Australian grower extremely well in recent times? Gregor a real story here would be if you actually sought comment from global buyers or at the very least from someone who has actually traded grain before rather than from the old PR spin Dr of one of Australia’s newest Oligopolies. Perhaps the Rural Press could send you off to the next international millers’ conference so that you could get the real story..
Posted by Oligopoly Monopoly, 11/03/2010 12:13:36 PM
Fairly well said Oligopoly Monopoly. I just think that if Australia can't definitively re - establish it's reputation as a high quality supplier of wheat, then we will have lost a major competitive advantage.
Posted by Temporaryfarmer, 11/03/2010 4:20:09 PM
A Bit rich coming from a company who hold the eastern seaboard monopoly for Bulk loading of grain. It is interesting to note that it costs $10-$12 more to handle and load grain onto a ship on the East coast compared to the west coast. As a company Graincorp couldn’t cut it in the world of competitive business through merchandising. They have retreated to the safety of their version of a single desk that controls 100% of East coast bulk grain. Domestic grain users must love Graincorp as due to us operating on export parity (cost's counted back from the delivered country) ,the greater the costs the lower the price the domestic users need to pay.
Posted by graingrower, 11/03/2010 8:27:55 PM
Ahh, the socialists are always lurking in the cracks. Congratulations to David Ginns for resisting the socialist chorus. Farmers shouldn't be slugged with the cost of promoting any grain but their own.
Posted by dickytiger, 12/03/2010 9:36:36 AM
I'm sorry, but what is that saying about the pot and the kettle: "“What we have to understand was that under the single desk, AWB was promoting themselves, not Australian wheat." followed by: we sent over three people to the international millers’ conference in Turkey last year as a commercial exercise, to promote GrainCorp, and by extension Australian wheat.” I think there's also another one - whats good for the goose is good for the gander????
Posted by kirra, 12/03/2010 6:41:05 PM
David Ginns, We as grain grower do not want to be lead around by GrainCorp or any other Grain Traders that's for sure, we have had enough. Look where we are now, one big harvest and this whole grain market from farm to port will fall over and collapse.
Posted by Pedro-- NSW, 13/03/2010 5:04:50 PM
Australian wheat has hit rock bottom as a reliable supplier of high quality wheat. What people like Diavid don't want is people with no vested interest visiting markets (pre competitive) and bringing back the real story on Australian wheat and what is going on in the supply chain. It is not the breeders or variety classification but between the farmer and the market that the problems arise from people trying to make a quick $ at the expense of our hard fought reputation, that is now being trashed by big business self interest.
Posted by Phil, 16/03/2010 7:23:57 AM
“dickytiger” or should that be dicky trigger? Clearly you own more shares than you do hectares. While I wouldn’t brand my self as being “socialist” I will always put framers before corporates! I do however agree with you that farmers should fund the marketing of their own grain, but how do we protect ourselves from bad advertising? I found this article in last weeks news, perhaps this was your wheat being sold off shore? (disappointing how this has not made it into the Australian press) : http://timesofindia.indiatimes.com/india/1250-tonnes-of-toxic-wheat-from-Oz-seized/articleshow/5720591.cms
Posted by Oligopoly Monopoly, 29/03/2010 1:09:51 PM

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