Its Time to Plant a New Grain Model

its-time-to-plant-a-new-grain-model

At the recent WA farmers annual conference the Minister for Agriculture Allanah McTiernan noted the regular advice I was giving her in these pages and questioned why I had not been more proactive making things happen when I was Chief of Staff to a previous Minister for Agriculture.

A fair question, but as a staffer my job then was to give advice, not to make decisions, that responsibility lies with Ministers.  In the world of politics good Ministers will listen to their industry and their advisors while bad Ministers tend to ignore their industry and sack their advisors when they don’t like what they are hearing.

In my current role as CEO of WAFarmers my job is to listen to farmers and give some frank advice about what needs to change if we are to sort out industry representation and protect farm businesses from bad Ministers. As has happened to many a previous Chief of Staff and Chief Executive Officer when pointing out the obvious, this might not end well, but here goes anyway.

In previous opinion pieces I have written about ‘Lifters and Leaners’ and ‘All for One and One for All’ the fact that to have a powerful voice in the political world farmers need to be members of a single peak body. Now, we need to talk about the drivers behind membership and what is holding back farm owners from becoming members of organisations like WA Farmers and how we can fix it and play a bigger role in national debates.

As Mao Zedong once famously said political power grows out of the barrel of a gun, fortunately in Australian agri-politics, the gun barrel translates to political horsepower.  Those organsiations that have been able to mobilise most of their industry members under one organisation are today running big tracked tractors that can pull back hard on bad Ministers.  In our case we are running two wheel drive tractors and it’s time for us to gear up especially as we will in all likelihood will be facing a federal labor government within 8 weeks which is unlikely to be sympathetic to your bottom line.

We have recently seen the importance of what big horsepower can achieve in a text book example of political lobbying run by the Rock Lobster Fishery in WA, where all the fishers are members of the WA Rocklobster Council. After a short sharp campaign they alongside WA Fishing Families managed to roll the state governments push to nationalise 17% of their fishery by running a hard hitting, well-funded and coordinated political lobbying effort. Just as we are about to see the CFMEU force a Shorten government to roll up the Building Industry Watch Dog, a strong membership base and a single voice can drives oppositions and governments to fall into line with their views.

Internationally we see the same thing in agri politics in the United Kingdom, the United States and New Zealand which all have well supported farmer representative bodies that have a majority of the industry as members. As a result governments trip over themselves to curry favour with these peak bodies.  Not so in Australia.  When big issues hit our industry such as the threat of a live export ban, out of the woodwork comes a myriad of groups claiming to represent agriculture. It then becomes a  bizarre world of competing farm bodies tripping over each other in Canberra all attempting to get  MPs and Ministers to open their doors and listen. There are today just too many farm organisations, many with limited memberships sending too many conflicting messages into the media and parliament – it’s a mess.

As a result WA wheatbelt growers need to take the advice of Rob Kerin who is the current President of Primary Producers SA, a former farmer, agronomist, Minister for Agriculture and Premier who told us at our recent conference that governments only listen to well resourced, well organised and well represented peak bodies.

He offered up the example of the South Australia model with its strongly supported opt-out membership structure backed through state legislation. The South Australian model raises a fee for service of 20c a tonne all tied to industry approved projects such as reviews into their grain transport system or engaging with GRDC to support local research funding.  It’s the best model in Australia with 98% of farmers opting to remain part of the organisation.

In WA we already have 13 industries from wine to vegetables that have a similar fee for service model in place the APC (Agricultural Produce Commission) that supports their industries to run projects around biosecurity risk reviews, economic regulatory impact modelling, legal advice on water rights and importantly policy development for members. It’s hard to imagine that our biggest agricultural industry grains worth over $7 billion would not benefit from a more coordinated and better funded approach when it comes to industry representation.  Currently grain farmers in WA are allocating around 1 : 7000 of their collective grain cheque on industry representation which implies they either have a vast amount of faith in their politicians or they are happy to continue leaning on their neighbour.

As we head towards 2020 our grains industry is facing serious state and national grain industry coordination challenges, many of which will be thrashed out over the next few years setting the scene for the next decade to 2030. A 16.6c per tonne fee for service on grain in Western Australia, that’s locked in for a single three year period (50c) would raise the funds needed to support a radical overhaul of state representation, and continue to address key industry issues.

To start with the funding should be used to bring together the 1100 WAFarmers grain producers, the 100 WA Grains Group and the 100 or so PGA grain growers under one umbrella, let’s call it the WAFGGA so everyone feels included.  These 1300 growers would represent about half the growers in the state and well over half the total production.  By offering a simple opt-out formula the industry would be overnight almost 100% represented and then for the first time in a position to fund the economic and cost benefit studies that are now standard fare for building the policy cases against bad government policy.

Be it the need for rail, road or mobile phone towers the days of signing petitions, writing letters and drafting submissions in-house to get government funding are long gone.  If the industry wants to keep its fuel rebates or grow off farm deposits limits, have black spots funded or water piped to country stand pipes then it needs to commission economic studies by reputable consultancies like KPMG and Price Waterhouse, to build the case.  This is the way the world works in modern policy development, look at the scientific work that the live exporters are scrambling to do on the issue of the 28 degree wet bulb on animal welfare.  This sort of work costs industry serious money and industry needs to be in front of the game.

If the recent jury decision on glyphosate in the United States is not a warning shot that a $7 billion grains industry needs to build the structure and the professionalism to engage in complex policy debates with world class consultants riding shot gun then the industry is setting itself up for a big fall.  Just ask the French farmers what life looks like with the looming ban on glysophate and what they would pay to convince government keep it legal. Lets not end up in the same situation, be it farm focused carbon taxes or reduced depreciation offsets the next government will dream up something that hits farmers bottom line.

A well funded WAFGGA with all 3500 grain growers in WA  as members could set itself the task of addressing a wide range of issues impacting our growers. From addressing  the carve up of the $70m that is flowing east in GRDC levy’s, to pushing for the state government to stop the cuts to the Department of Agriculture to ensuring our grower groups are being properly supported. They are all in the interest of WA growers and will in the long term well and truly cover the cost of 16c a tonne.

By not having a single strong grains voice in the state analysing the flow of cash out of grower’s pockets to Canberra and back we are simply running blind.  Think of it as paying your accountant or lawyer to track down expenses that are lost in a complex legal and accounting structure.  Growers don’t like paying levy’s but as the total pool of funds rises towards $100m we should be prepared to put $2m a year into a compliance system that effectively tracks this money in the interest of WA growers.

Such a funding structure would be limited, targeted and focused on policy not politics, how the existing bodies fit in will be up to the new structure, but to do nothing and hope that the zones and growers will come back to WAFF, PGA and WAGG is like hoping the millennials will give up their mobile phones and discover talk to people in meetings. It’s not going to happen, this coming generation when they get hold of the farm cheque book won’t be sending cheques to farm organisations as they network and engage differently to the baby boomers that fill the ranks of the existing farm organisations.

No doubt there will be loud detractors from following the successful South Australian model, the mouse that roars will be Puffing and Gruffing Aloud about no more levys, but if the mouse is sitting on a stack of grain it can always opt out and roar away, but the rest of the industry needs to work to protect the grain with the sort of horsepower only money from all growers can buy, not the few and declining membership left supporting WAF, PGA and WAGG. If that price is 16c a tonne for 3 years then maybe it’s time to put down the guns and crank up our new latest model tractor to full roar and start pulling our weight in politics.

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