OPINION: WA needs a total grain rail rebuild, a $1.4 billion, nation-building project to get back on track

Australia will miss out on more than one billion dollars of export income this year.

Why? Because of the “lost opportunity cost” of the WA grain harvest not being able to be transported and loaded fast enough to be sold before the start of the massive northern hemisphere harvest.

Traditionally, WA farmers have provided the bulk of the grain that Australia exports.

That grain is part of the smaller southern hemisphere summer harvest and traditionally commands a premium as global stocks fall.

As our grain harvest has grown from 10 to 15mt to 15-25mt, our rail system has failed to keep up with production.

This problem has been compounded with the sale of the WA rail network in the 1990s and the subsequent shut down of more than 700km of Tier 3 lines.

Those lines are today needed to help move up to a third of our annual harvest but they are stuck in limbo in a lease that is controlled by foreign interests that does not run out until 2049.

There is a simple solution — for the State and Federal Government to build a new line along the existing easements for use by transport operators like CBH.

For less than 10 per cent of the cost of the $14 billion dollar, 1700km inland rail line being constructed from Melbourne to Brisbane, WA could rebuild its 700km Tier 3 lines and upgrade its Tier 2 lines.

The funding would be a fair share of the funding devoted to the other three states for their rural rail network.

WA grain growers will remember the 2021-22 harvest as our best year ever, producing record yields of more than 24 million tonnes. We must be able to capitalise on these opportunities by getting the best possible price.

Grain farmer investment in research, development and extension through Grains Research Development Corporation has seen massive on farm adoption of latest technology, which has paid off.

As our grain harvest has grown from 10 to 15mt to 15-25mt, our rail system has failed to keep up with production.

This year, we failed to fully benefit on the record grain prices on offer by international grain marketers.

That failure was for one single reason: we could not move our grain fast enough from up country storages to the ports because of supply chain bottlenecks along the way and a lack of investment in the rail network.

For the past 20 years growers have been warning of a lack of investment in key rail infrastructure as a direct result of past decisions by governments leasing out the rail network and the monopoly lease owner shutting down lines.

Every one of the State’s 3700 grain growers this year missed out on hundreds of millions of dollars of export sales because we failed to move our grain fast enough to capture markets.

This loss multiplies up and flows through to the federal coffers, regional communities and the Australian nation.

We believe the loss in 2021-22 it is forecast to have resulted in:

- Loss of taxation revenue to the ATO of over $250 million

- Loss of income to grain growers of $1-2 billion

- Lost multiplier effect on regional communities

- Increased road trauma due to poor roads and increased truck movements

- Increased community impact and wear and tear on our road infrastructure.

- Increased carbon footprint of grain haulage by road when rail is 17 times more efficient

We need to catch the northern hemisphere winter supply gap to capitalise on the spike in grain market prices.

WA needs to ship up to 80 per cent of the grain harvest before the northern hemisphere crops hit the world markets in the middle of the year.

In 2004, CBH’s then-CEO predicted a 24mt crop by the year 2020.

This year’s losses will compound as WA farmers will grow in excess of 30 million tonnes by the year 2030.

We are on a treadmill and the problem is only predicted to grow worse.

This has resulted in grain marketers and buyers demanding large discounting of between $50 and $100 per tonne to account for risk and the uncertainty of supply to deliver the grain to ports.

The discounted price also reflects our poor reputation, as the demurrage paid to foreign ship owners and cost associated with the risk is sheeted back to growers.

The problem is not at the ports.

Our port facilities can comfortably handle double the current crop in a timely fashion.

The problem is the failure of the rail infrastructure and its capacity to deliver to ports in the time required.

Some claim that the solution is more trucks, but with the States Restricted Road Access rules and the ongoing shortage of both long-haul trucks and licensed drivers, it is clear that road trains are not an alternative to real trains.

And with the potential to operate driverless trains, the efficiency of moving more grain on rail is yet to be fully calculated. We are maxing out on our truck sizes and the number of hours truck drivers can work.

We believe grain carryover will this year be the greatest since CBH’s inception in 1933, exacerbating this problem.

To address this existing and growing national loss, the Federal Government is in a position to commit funds to a nation-building project of upgrading the state’s 700km Tier 2 and 3 rail networks to support the grain harvest.

Further to this, a social and economic study needs to occur to rebuild a rail line from Narrogin through Pinjarra and onto Kwinana to give a second strategic route to the Kwinana Port.

This would cover future increases in production and an alternative route to port, should the only east to west line fail as it has on many occasions due to fire, flood and other reasons.

On predictions 30mt of grain will need to be transported to the ports by 2030 and up to 80 per cent of this could be transported on the rail network, further reducing carbon footprint and community impacts on our roads and towns.

Since 2020, the State Government has recognised the long-term implications of the loss of Tier 3 rail, the efficiency of our grain supply chain and the growing cost on the grain road network.

It undertook detailed engineering analysis of the costs of rebuilding the network, with the Agonis Tier 3 grain lines Engineering Report concluding that an investment of about $1bwould bring that back all of the lines.

This is a great project to achieve the Australian agriculture industry’s objective of being worth $100b industry by 2030.

The Federal Government should allocate $1.4 billion to WA’s grain on rail network, with $300 million from the State Government, to replace and upgrade the Tier 2 and 3 network and associated bin and loading infrastructure to ensure we have a world-class, grain freight network — fit for our growing industry.

Bob Iffla and Trevor De Landgrafft are both members of the WAFarmers Corrigin-Lake Grace Zone and farmers at Varley and Newdegate respectively.