Raise our vision: think noodles and beer

Murray Gmeiner, Nuffield Scholar from Wagin, WA, offers a grower"s view of the new Australian Grains Industry Strategy. The strategy will be the subject of nation-wide grower discussion groups over the coming months.

After reviewing the Australian Grains Industry Strategy 2005-2025, it certainly is easy to get excited about the opportunities that present themselves for agriculture.

The strategy forecasts increasing demand and more specialised products that graingrowers need to produce to be at the forefront of global grains production.

Australian graingrowers are among the most efficient and adaptive farmers in the world, and this gives us an advantage in that we can respond to market signals and be world leaders in adopting the concepts outlined in the strategy.

It would force the Australian grains industry to become a cohesive "mature" industry, that has all participants involved in development and continued prosperity. I term this "maturity" because it would then become a production system that has every contributing sector of the value chain aiming for a common goal. Currently, this is not the case.

This is going to be the most difficult aspect of the strategy, as the industry is highly self-interested and does not work cohesively or speak with a united voice for a common goal.

It is extremely difficult to get a common goal in an industry if it doesn"t have a common voice.

The current ideology for grain producers is that the greatest quantity of grain is the best economic outcome for their enterprise (current market signals send the message that this is not an incorrect concept).

The greatest amount of grain - barley, for example - that can be delivered to the bin at the highest quality (even if it "just" gets into malting and includes on-farm blending to achieve this) becomes a very self-interested mentality and does nothing for the idea of embracing a whole value chain principle.

Once the grain has been delivered to the bin, it is then the end of the issue as the grain is now gone. Getting the next load through the quality parameters is the priority, and so it continues.

This mindset also influences research and development. A great majority of trials are all aiming for yield maximisation packages. But if the concept proposed in the strategy is to be taken on and implemented, production packages aimed at creating consistent quality over variable production seasons should also be at the forefront of R&D.

These seasonal variations in quality are one of the reasons that strategic alliances would be difficult to maintain.

Demand-orientated grain production, instead of quantity-orientated grain supply, will only be realistically feasible with strategic alliances through the grains industry chain.

All farmers are adaptive and will take up new processes and technology quickly if they perceive benefits for their farm. This will occur if these strategic alliances give benefit to the growers involved - this is where the perspective still lies for growers.

These strategic alliances with direct knowledge of the consumption trends of the final consumers will provide the information needed for grain producers to remain relevant and ahead of competitors.

Emerging demand is a constantly moving and evolving creature; a niche market is only a bulk commodity five years ahead of its time. It is essential to be correct in knowing future demand and consumption trends. If projected trends and consumption patterns are incorrect, it is a very expensive mistake that allows cheaper competitors to regain a foothold into markets.

Another side of the argument is emerging supply: it is not often seen as a resource, but mostly treated as a threat.

Emerging grain-producing regions in other areas of the world are seen as direct competitors, but if Australia were to use this and invest into these regions in joint ventures, infrastructure ownership or even direct ownership of the land - this could lead to increased Australian grain profitability from grain grown in another region. These regions are going to develop whether we like it or not, so we should be taking advantage of the situation to our benefit.

As farmers, we all need to look at this issue from a much broader perspective. Our products are not wheat and barley; they are bread, noodles and beer. We need to raise our vision to see our products in the world market in the form of their end usage.

If we do this properly, we will become a supplier of a highly desirable product that will be at the forefront of consumers" minds. If we do this badly, we will be the supplier of a price-sensitive bulk commodity that is easily substituted. In the end, it is our perspective and mindset that decides this.

Murray Gmeiner, gmeiner@wn.com.au