Grain growers call for levy review as GRDC reserves climb

There is growing discontent within the grains industry that the Grains Research and Development Corporation is amassing a large cash reserve kept within Treasury coffers.

Grain growers are calling for a rethink of levy rates paid to the industry’s research body, with government forecasts revealing its revenue will exceed $1bn for the first time.

There is growing discontent within the grains industry that the Grains Research and Development Corporation was amassing a large cash reserve kept within Treasury coffers.

The latest federal budget reveals the GRDC’s forecast revenue for 2025-26 will be $1.027bn, with almost $680m sitting in reserves.

Grain growers contribute 1.02 per cent of their net crop sales towards levies, with 99 per cent going to the GRDC, and 0.01 per cent to Plant Health Australia. The federal government matches grower contributions up to 0.5 per cent of the three-year rolling average of the gross value of production.

In 2024-25, grower levies are estimated to be $190m and federal government contributions of $109m.

Grain Producers Australia chief executive Colin Bettles says the industry hopes to present an alternative to the industry’s current levy settings to the federal government within the next few months.

Grains Producers Australia chief executive Colin Bettles said the industry had become a victim of its own success.

“The numbers in Treasury keep going up, it’s become a self-feeding beast. Why can’t we have some flexibility? We need to look at how we put it to work for growers,” Mr Bettles said.

“Let’s democratise a fraction of the levy money, let growers decide how it’s spent.”

Three years ago, GRDC’s then chair John Woods told an industry conference in Perth the organisation was struggling to spend all the money being generated.

GRDC’s latest annual report showed in 2023-24, $224m had been invested in 600 research, development and extension projects, with forward commitments of $540m and a total investment target between 2023 and 2028 of $1.2bn.

“We finished the 2023-24 year with a significant amount in reserves that will ensure we can continue this prudent but ambitious investment in RD & E,” the report said.

Mr Bettles said GPA has been reviewing levy rates since October 2022 and was hoping to present an alternative to Agriculture Minister Julie Collins’ office within the next few months.

Drought conditions have impacted farmers in parts of South Australia and Victoria for almost two years, making every cent count. Picture: Jason Edwards

WA Grains Group chair Alistair Falconer said the ballooning size of the GRDC’s reserves had prompted many growers to question whether the levy rate was too high.

“The levy is actually a tax on our gross production, so it’s taken out of our gross income whether we make a profit or not. In some years you have to finance that if you’ve made a loss,” Mr Falconer said.

“The fact there’s almost $700m in reserves, it’s a good indication growers need a decision about what the size of the levy is.

“The east coast and South Australia have had a few drought years and all these line items become more important as money gets tighter and farmers will be looking for places they can save.”

A GRDC spokeswoman said the organisation was in a strong financial position, and “must take a long-term view to ensure research continues to deliver value through all seasons and conditions”.

“Like growers, GRDC’s income varies from year to year depending on seasonal production and grain prices,” she said.

“Reserves are maintained to ensure continuity and to protect RD & E delivery from seasonal volatility. This helps avoid switching investment off and on in response to changing conditions.”

A review to inform GRDC’s future investment approach is due later this month.