Anger over grain levies

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Jenne BrammerThe West Australian
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Morawa farmer Grant Borgward has weighed into the debate over compulsory levies on grain producers.

Mr Borgward said he had just harvested 4500ha of wheat, of which $20,000 was taken by GRDC and plant breeder levies.

While not against contributing to research, he is frustrated by the fact he has no say in how the money is invested.

"This is a significant chunk of my net income and I don't see any value in that $20,000 that goes out the door," Mr Borgward said.

"We need a debate on how this is done and how decisions are made as this is too much of our net profit that goes out each year.

"If we just keep accepting it, there will be no margin left for the guys that take all the risks and do all the work."

In particular, he is critical of Eneabba farmer and GRDC director Kim Halbert's recent claims that 78 per cent of growers are happy to pay the levies collected by the GRDC.

Mr Borgward said a more valid measure to gauge support of the levy would be an objective survey per tonne taxed.

"This might reveal the true state of disgust from famers at how our directors have allowed and encouraged the double taxation of tonnage with no downward adjustment in the levy rate when end point royalties were introduced 10 years ago," Mr Borgward, who is also national sales manager for Rural Liquid Fertiliser, said.

He said EPRs, rather than being flat, should be stepped in accordance with the pay grade of wheat type; for instance, feed grade wheat royalties should be lower than H1.

He was also critical of Mr Halbert's statement on ABC Radio that research must not be political.

Agriculture Minister Barnaby Joyce last month announced new board appointments on the GRDC, which take effect from this week.

"Kim Halbert's claim that research must not be political is an extraordinary double standard given his own reappointment was made by a politician," Mr Borgward said.

The GRDC initially came under fire from Geraldton-based agricultural consultant and iCropAustralia founder Paul McKenzie.

Since early 2013, Mr McKenzie has conducted long-term analysis of grain farmers' "licence to operate": the one per cent levy and one per cent end point royalties imposed on grain growers.

Mr McKenzie said the impact of 2 per cent costs on a 5 per cent business margin was material, and the opportunity cost of "double-dipping" had a profound and generally unrecognised impact on farm balance sheets that had led to higher debt levels and contributed to rural depopulation over time.

The Pastoralists and Graziers Association is also opposed to compulsory levies.

A Senate enquiry into compulsory agricultural levies, led by WA Liberal Senator Linda Reynolds, is now under way.

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