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Legislative Council - Fifty-Second Parliament, First Session (52-1)
2011-02-09 Daily Xml
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GRAIN INDUSTRY

The Hon. R.L. BROKENSHIRE (17:15): I move:

I. That a select committee of the Legislative Council be appointed to inquire into and report upon elements of the grain industry in South Australia and in particular:

(a) The capacity of the market to ensure a vigorous and competitive marketplace for grain growers;

(b) Grain classification and standards and whether internationally approved grain testing options, e.g. falling number machines, should be available to growers on request;

(c) Service delivery, including human resources, operating hours and storage capacity of grain receival points;

(d) Export and shipping arrangements, including port access and associated costs;

(e) Grain quality management, including receivals and outturn;

(f) Open and transparent information on all grains, including stock disclosures;

(g) Adequacy of road and transport infrastructure for the grain industry; and

(h) Any other relevant matter.

II. That Standing Order No. 389 be so far suspended as to enable the chairperson of the committee to have a deliberative vote only.

Today I move that a select committee of the parliament investigate the grain industry in South Australia. I know that some honourable members argue that select committees may solve nothing and that they would prefer meetings behind closed doors and carefully timed press releases to make it look like something is being done.

However, select committees do actually give the community an opportunity to have public hearings and hear testimony from witnesses on important issues to the public, and they allow the parliament to democratically look at all the issues, warts and all, and ensure that we can recommend the best possible outcomes to the parliament and then request and demand that government implement those recommendations.

I believe that this is a select committee that is very important to the future of one of the most significant growing agricultural industries in this state, namely, the grain industry. It is not about attacking government, it is not about attacking anyone in the parliament, and frankly, it is also not necessarily about attacking Viterra either. It is about looking holistically at all the issues and ramifications that occurred with a near-record harvest here in the state for the 2010-11 harvest.

I saw many constituents and their families who were absolutely frustrated about processes with the 2010-11 harvest. They want this inquiry, and there is nothing more appropriate than public hearings and evidence from witnesses on the social and economic impact of the conduct of the harvest and issues within the industry generally. I declare my interest—conflict of interest, if you want to look at it that way—as I do when I am speaking in this chamber as a farmer. My family also grows grain, and I was well aware personally of some of the frustrations that occurred in trying to get that grain to the silos.

I acknowledge the work of the shadow minister for agriculture, food and fisheries and member for Hammond, Mr Adrian Pederick MP, who has moved a concurrent motion to this one in the other place. I appreciate the Liberal Party's indication that it will support this select committee, because its local members, in particular across the grain-growing regions, would be very upset about the 2010-11 harvest and believe it is well due that we have an inquiry into the industry.

I will be sending information to the rest of my colleagues, asking them to carefully analyse over the next couple of weeks the reasons why I am moving this select committee, and I hope that they will also join me in supporting a select committee into the grain industry. Just briefly, I want to put a few things on the public record. The bottom line is that grains are, of course, a major contributor to gross regional product.

I note that the South Australian Centre for Economic Studies states that for 2009-10 farm gross state product was about $2.6 billion, which I know is much less than usual, given the droughts, and certainly this year, with grain alone we expect to exceed $2 billion in grain farming contributions to the gross state product, with overall agriculture being much higher. In fact, gross state product for 2009-10, according to the Centre for Economic Studies, was $80 billion.

Grain handling is managed not only by Viterra. There are other companies and organisations into grain marketing, handling and receival, but clearly Viterra is the largest, owning most of the infrastructure in this state since it bought it from ABB Grain in May 2009. That is why, clearly, quite a lot of the focus will need to be on Viterra.

There were so many issues and, having been involved in watching and working with the grain industry for some time, when you get a record harvest clearly there will be some pressures in receivals and management, one would have thought that, given PIRSA's indicators much earlier than when the grain season started about a potential record harvest, Viterra and other companies would have started to make some very good planning to ensure that, as best they could, the farmers got through the silos as quickly as possible and also had state-of-the-art technology to help them manage with the assessment of grain. That is one big thing that has really fallen down.

Without pre-empting too much, as if this gets up we will need to be clear minded on the evidence, I believe that perhaps the lack of commitment to serious infrastructure spend has had an incredibly detrimental effect on many farmers. Farmers complain to me regularly about the lack of falling number machines, which measure how active the enzymes are in the grain in breaking starch into sugars and ultimately sprouting grain. With the wet season, there was quite a lot of shot grain, but visual assessment, which was used in a lot of receival facilities, had a lot more risk attached for the farmers in how that grain was graded.

In fact, it is clear from evidence given to me by a number of farmers that some of the visual assessment saw significant downgrades on wheat in particular, which, had it gone through the falling number machines, would have possibly gone hard or APW (Australian premium wheat) or ASW (Australian standard wheat) that went down to general purpose feed or even feed. In fact, there were farmers who were so furious about the way their grain was being graded that they had to spend a lot of additional money travelling to silos where there were falling number machines. Interestingly, when they the got a falling number machine assessment, their grain was actually graded up.

This year in particular, when you consider that the difference between hard wheat and feed wheat was at least $100 a tonne, that is a huge difference. It could be something like $3,000 a semi-load difference to the bottom line for a farmer. In talking to one of the Cowell silo committee members, who is a farmer on the West Coast, and listening to reports that he gave to Country Hour on the ABC, some farmers allege that they may have lost as much as half a million dollars simply by the grading techniques used when they took that grain into the silos.

Given that we have all been through seven years of drought, the last thing you want when you get the one in 10-year harvest is to have this sort of situation occurring where you are looking forward to a bumper harvest when not only was the yield good but the price was brilliant compared with what it has been in recent years. Given the droughts in the northern hemisphere, those farmers were looking for really good returns to start to reduce debt and upgrade machinery. It is totally unsatisfactory if they ended up losing that sort of money.

I know from my own farm, whilst there was some variance in paddock with the grain, given that there were crab holes and things where you got excessive wet and there were some screenings there, when I looked at those grades in the field bins before they went to the silos visually there did not appear to be very much difference in them, yet you took one semi-load to the silo and it would be ASW and the next semi-load right alongside the field bin taken from exactly the same area was downgraded. Admittedly, I had the opportunity of sending our grain through a silo where there was a falling number machine, so you can imagine what happened when there were visual assessments.

There are issues around training, the lack of training and general infrastructure. At Tailem Bend, for example, they are still building bunkers. It was hard enough trying to get the grain off as it was this year, let alone the silos telling you on the Friday that they would take no more ASW, as an example, until the Tuesday, and the only period of good weather the farmers had to reap that grain happened to be from the Friday to the Tuesday. Where do you store it? In comes another rain and downgrades again. Given how significant the grain industry is to South Australia, if Viterra and others are serious about a long-term future here, then there needs to be some serious spending on infrastructure, and again we will find that out if this select committee is approved.

I put on the public record that Viterra has now said, due to pressure by the farmers, that they will have an inquiry themselves and that is admirable of them, but I believe that the best inquiry is an independent inquiry by a cross-section of colleagues in this chamber who can actually have a proper select committee that is totally independent from any company. The AAP reported that minister O'Brien said:

The company gave me an assurance it would conduct a thorough analysis of the issues including proper consultation with stakeholders.

He went on to say:

It was agreed that an expert independent member be appointed, someone with the respect and support of growers.

Regarding Viterra's review, I will say four things. I welcome it. It can run parallel and I look forward to them sharing their findings with the select committee. I have the utmost respect for Rob Kerin. However, I am not convinced that, because they have appointed a former premier and agriculture minister, we should leave all of the inquiry to Viterra.

Viterra's review will not be public, as I understand it. It will certainly not be as transparent as a select committee, and it will ultimately be within Viterra's powers to act upon their inquiry. There is only a chance of a state government review after that inquiry and for me that will be too late for this harvest. In fairness to the minister, the minister did say that, if he was not satisfied with Viterra's inquiry, he would then look at a parliamentary committee to investigate.

My concern (over and above the transparency and the absolute independence and democracy of having a select committee here in the Legislative Council or in the House of Assembly, wherever it may finally be approved) is that we need to move quickly on this because we need to learn from the mistakes of the last season and ensure that those can be rectified before the next season. We are only nine months away from harvest; probably, on the West Coast, and in parts around Port Pirie and the like, we are only eight months away from harvest, so this needs to happen quickly.

I note that minister O'Brien—someone whom I personally get on well with and respect—has said that one reason that he did not want to have a select committee at the moment was the cost. It will not be that costly. We have a structure here, we have staff here, we have the expertise here to conduct the select committee, but even if that is a cost (and let us say that it does cost a few hundred thousand dollars) it is in the state's best interest to address these issues when you are talking about hundreds of millions and billions of dollars' worth of income to the state.

Because of the time, at this point I will not go through the terms of reference. I have been through them before, so members know what those terms of reference are. The current issue is of enormous concern. I went to Tailem Bend last Thursday afternoon and 140 farmers attended, some from as far away as the West Coast. There have been meetings on the West Coast. There are a lot of issues. I think it is also timely to have a select committee just to see how we are going, given that the single desk was removed a couple of years ago. Importantly, I think a select committee of the parliament is the best way to give farmers the confidence to know that there will be a fully transparent and thorough inquiry. It is important for our state, it is important nationally and it is important when it comes to food security.

I ask all members to have a close look at the material that I will be sending them. As I said, this is not a witch-hunt on the government or Viterra. It is about having a look at all the problems that have occurred and ensuring that, in the future, farmers get the best opportunity to get their crops into the silos as rapidly as they can and to look at options to expand opportunities for farmers in their marketing, to look at ports and other infrastructure (road and rail) and to ensure that farmers can get the best possible price for each tonne of grain so that they can then assist their families, their community and the state economy. I commend the motion to the house.

Debate adjourned on motion of Hon. J.S.L. Dawkins.

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