VICTORIAN grain growers will be able to buy insurance against the risk of grain company collapses for the first time.
After talks with the Victorian Farmers Federation late last year, OAMPS Insurance Brokers has introduced a new insurance product protecting growers from the risk of grain-trade insolvencies.
But it won't help those already burnt.
VFF Grains Group president Brett Hosking said a rise in the number of grain company collapses in Victoria had led directly to the move.
He said about 1000 grain growers, including from the Bendigo region, were still owed an average of $100,000 from the collapse of companies such as One World Grain, Mid-West Milling and Convector.
He knew of growers owed up to $600,000, and up to $10 million in total.
Payment risk and grain company collapses were an emotional subject at VFF grains group pre-harvest roadshows last year.
“We heard instances of growers facing payment defaults of hundreds of thousands of dollars, which will have a debilitating impact on their businesses and families,” Mr Hosking said.
"It is fair to say these defaults are having a knock-on effect throughout the grains industry and wider community."
These defaults are having a knock-on effect throughout the grains industry.
Mr Hosking said the VFF initiated talks with insurance companies last year in response to the collapses, and welcomed OAMPS' new insurance product.
“This measure was in direct response to the impact of company collapses on grain growers,” he said.
”This was the quickest thing we could to. Long-term measures, we’ve still got to look at.”
Long-term measures under consideration to protect growers include an accreditation system for grain traders, a debtor insurance scheme and grower registration with the Personal Properties Securities Register.
Such proposals would need a bigger conversation between the VFF grains group, grain traders, government and other grain organisations, Mr Hosking said.
“These discussions will need to take place at a whole-of-industry level over time," he said.
Mr Hosking said the grains market was more competitive since the AWB single desk was deregulated.
"Now you can sell your grain to anyone,” he said.
“There are a larger number of traders now, so it’s good because you’ve got more competition… but they (the traders) are operating on a smaller margin. So it’s tricky.”
Editor's note: Blue Lake Milling was listed in a group of companies referred to by VFF president Brett Hosking as owing money to grain growers after collapse.
Blue Lake Milling chief executive officer Ben Abbott contacted the Bendigo Advertiser to say the company was trading 'whole heartedly'.
''I don't know where the information come from, but it's rubbish,'' he said.
Have you suffered losses from the collapse of a grain trader? Do you have ideas about how to tackle this issue? Email Dorothy.email@example.com