Wheat farmers insist on better grading system

Western Cape Farmers want a revision of the current South African wheat grading system to level the “international playing field”. They feel they’re being unfairly penalised when the protein and bushel count of their wheat don’t fall into the buyers’ required range, while the same rules don’t apply to imported wheat.
At a Grain SA winter grain meeting in the Western Cape, Andries Theron, the association’s winter grain representative, said he and fellow farmers can no longer afford to produce wheat under the current grading system.
He explained the system downgrades wheat to grade two in cases where it has a slightly low protein content even when the bushel is satisfactory, or if the protein falls in the desired range, but the bushel is unsatisfactory.
But Theron pointed out the buyer could combine these two types so the end product becomes grade one. He said a sliding scale or smaller intervals to grade wheat protein and bushel would be the best solution. A sliding scale would mean farmers wouldn’t lose a blanket sum, but would instead be penalised incrementally for every 0,1% of protein lower than required.
However, there’s resistance to this approach because it requires the industry to store all types of wheat separately, requiring more storage space and higher costs. An alternative would be to grade wheat in two classes according to protein or bushel. In this way farmers won’t be penalised if their wheat has a high protein content and a low bushel content or vice versa.
These two classes of wheat could also be traded on Safex. Theron said the whole industry, from wheat buyers to retailers, would have to be satisfied with the eventual solution. He also suggested the industry investigates other countries’ pricing mechanisms for a possible solution.
Farmers at the meeting also voiced their dissatisfaction with the way the difference in price between grade one, two and three is calculated. Currently, a set scale system is used. In 2008, for example, farmers automatically received a predetermined R140/t less for grade two than grade one and R140/t less for grade three than grade two.
Kobus Bester, a farmer from the Swartland, proposed this system be replaced with a percentage system, as the set scale doesn’t make enough provision for market fluctuations as happened last season.
The percentage system would mean farmers receive 4% less for grade two than grade one wheat, and 4% less for grade three than grade two. Bester added the technology exists to make such a shift relatively easy. – Glenneis Erasmus