Stakeholders throw AEGIC $15m lifeline

AUSTRALIAN Export Grains Innovation Centre (AEGIC) is set to continue its role in market insights and grain technical services, with a commitment to funding until June 2020.

The Department of Agriculture and Food (DAFWA) and the Grains Research and Development Corporation (GRDC), AEGIC’s two stakeholders in a 50:50 partnership, have committed $15 million to fund the centre’s market insight and engagement and training services.

The centre was established in 2012 to help fill a gap in the technical market support of Australian grain following the deregulation of the wheat industry in 2008.

AEGIC has since played a key role in developing market insights into global wheat producers, engagement with exporters and end users, research and analytical services.

But according to AEGIC chief executive officer Richard Simonaitis, there is a growing appetite throughout the grains industry to see an industry body undertake promotion of the Australian grains industry at a global level, 

“There’s definitely some movement at an industry level but I would say it’s a state of flux and evolution within the industry,” Mr Simonaitis said.

“From an AEGIC point of view it’s most important that the industry decides first if it should happen and once that decision is made there is a second decision about who should do it.

“If there’s a role there for AEGIC to play then we will embrace that.”

He said it was a similar process in regards to the acquisition or absorption of other grains industry bodies.

In 2015, AEGIC took over GrainGrowers’ technical and analytical services – formerly the Bread Research Institute – and in October the centre became a foundation contributor of the Grains and Legumes Nutritional Council (GLNC).

“The inclusion of the Sydney office and the foundation position in the GLNC moves us further down the value chain in our ability to influence value,” Mr Simonaitis said. 

“It gets us closer to the manufacturers and end users to understand that influence in the export market, which has never been done before.

“AEGIC’s vision is to be Australia’s leading organisation for market insight, innovation and applied technology in the grains industry”.

He said the centre was there to deliver value back to Australian grain growers at a market rather than transactional level.

“By the nature of our funding it is very clear that growers are our primary beneficiary and our purpose is to increase value in the Australian grains industry,” he said. 

“That is the single reason for us to exist.

“If we’re spending growers’ money and not increasing value then we are destroying it so everything that we do we need to articulate grower value – if we can’t do that we shouldn’t be doing it.”

New projects on the horizon for the centre included oats, barley-processing modifications and extending the centre’s market intelligence.

“In oats we are looking at demonstrating that higher value, alternative use of a product that was always a feed grain,” he said. 

“We are doing some interesting work in barley on whether there’s a modification to the processing techniques that can make more of the protein available.

“There is a market signal around protein levels and we think we can add some technology to this.

“In the longer term we are increasing the focus on the demand and consumptive patterns of consumers in key markets in South East Asia.

“It is fairly well understood that in the early days as a country’s wealth increases, that they buy a wheat product to meet hunger, but as the wealth increases it starts to become more about elite baking, higher quality noodles or a pastry-type product.

“For example, you can sell wheat to make a fried dough ball on the side of the road in Indonesia with a flour value of about $500 per tonne.

“But if you sell wheat to go into loaf bread for the most discerning housewife in Asia, the flour value there is more like $3000/t.

“It becomes a question of which part of the market do we want to play in and how do we make sure we access that market?”