Calls for ACCC inquiry: Grain Producers Australia doubles down on calls for supply chain probe after CBH move

Grain Producers Australia’s WA-based chair has doubled-down on calls for an inquiry into the nation’s grains supply chain after a radical overhaul by CBH Group attracted the ire of farmers.

The co-operative’s marketing and trading division last week imposed what is believed to be an Australian-first change to contracting for growers trying to sell, in line with its “dynamic pricing strategy” introduced this year.

The strategy aims to try and make grain selling at higher prices more equitable by allowing more farmers to access CBH contracts, which have been in hot demand in recent months with offers of $30-$50/tonne higher than other traders.

Under the new rules — announced last week and put in place on November 28 — growers who access a CBH contract of 40 tonnes or more will be required to wait two business days before being able to contract again. A 200t contract limit was already in place.

At the core of the decision is WA’s grain supply chain — with efforts to get grain to port overwhelmed after last year’s record harvest of 24.3Mt, with a second bumper crop set to rival last year’s mega total under way right now.

CBH has told farmers it is unable to “buy the entire crop” and has instead focused on trying to make its contracts “more equitable” during a challenging time. Many farmers have expressed frustration at missing out as contracts were quickly snapped up.

GPA chair Barry Large said farmers’ struggles selling grain highlighted issues with the State’s supply chain and the need for a review.

“The market study for a pricing inquiry is relevant, and it shows us that this is by no means a witch-hunt on any bulk handler,” he said.

“But it would give us the ability to understand the market, to understand what growers require, the capability of bulk handlers and then the ability to put in place necessary changes going forward.”

Commenting as a farmer, rather than as the GPA chairman, Mr Large said he was concerned with CBH’s method of selling.

“We are in unchartered times at the moment . . . with CBH operating a strategy where farmers can sell if they can get through,” he said.

“I struggle to understand the way they are manipulating the market.

“I question the vision of CBH management and the board that say they are always prepared for a bigger crop.

“In the past few years, or the past few decades, there hasn’t tended to be that focus and we are wearing the brunt of it now.”

The market study was one of GPA’s key policy requests ahead of the Federal election, and Mr Large said GPA was in discussions with the Federal Agriculture Minister Murray Watt about the proposal.

“The key is, that we need everyone to get on board with this so we can see this happen,” he said.

“This is great for our industry, but there is a lot of pushback saying it is not required.

“It has been a long time since there has been a review and it is timely.”

The call for the market study comes 15 years after a major shake-up of grain marketing in Australia, when the Federal government removed the monopoly powers of the single desk — the Australian Wheat Board — in 2008.

Australian growers used to supply grain to AWB, which then marketed it around the world, but other countries complained about trade distorting practices when AWB was embroiled in the oil for food controversy.

Before CBH bolstered its pricing in recent months, the gap between what Australian farmers and international competitors were being paid for their grain was cast into the spotlight when the Russian invasion of Ukraine caused a global rise in prices.

WA farmers were largely unable to cash in on the high prices because the lagging grains supply chain was struggling to get additional grain to port, and most shipping slots had already been committed.

Mr Large said farmers facing rallying input costs deserved to know where the supply chain was letting them down.

“We are growing the dearest crop we have ever grown in our lives and that is weighing heavily in people’s minds,” he said.

“They are trying to get the crop sold and they are trying to make decisions that benefit their business.

“This is about making sure our supply chain is fit for purpose, the systems and processes in place all across the country, for all growers to maximise returns to growers and to shareholders.”