Ground Cover Supplement : GC Supplement - Value Chain
GROUND COVER VALUE CHAIN 13 The power of AMPS ONE OF THE more successful grower-based value-adding ventures is AMPS, set up five years ago to differentiate grain produced on properties on the Liverpool Plains in northern NSW. The growers established a research group to improve their agronomy and set grain-quality standards with which to attract preferential treatment by buyers. AMPS -- Agricultural, Marketing and Production Systems -- was started in 2001 with the idea of using product quality and reliability as a lever for lifting profits at the farm gate. Founding member David Brownhill says the group never intended to reinvent the wheel: "We just want to become a part of value chains beyond the farm gate; and to be valued as part of those chains," he says. Within the group there are two divisions -- AMPS Research and AMPS Commercial. As their names suggest, one concentrates on research through on-farm trials and the other on commercial activities to develop long-term relationships with input suppliers and end-users. The newly appointed chief executive officer, Steve Littlejohns, says shar- ing knowledge within the group is critical to the group's research division. "We hold on-farm walks to show members the outcomes from trials -- recent ones being work on improving soil quality and new seed varieties." On the commercial side, AMPS has won the right to market silos manu- factured by US-based GSI Silos in Australia. Mr Littlejohns says the deal will help the group financially, and it also fits with the marketing and value- adding goals. "It will also help build up the storage capacity within the group, allow storage segregation and improve marketing options." CHINA -- NEW MARKETS, NEW DEMANDS As China's economy has exploded, so has its middle class, which is increasing the demand for more diverse foods. According to Dr Ken Quail, director of grain products at BRI Australia Limited, China's middle classes now have access to higher quality restaurants, supermarkets and fast-food outlets, supplying increased choice and quality. He says this is having a particular impact on wheat production, because domestic production has actually dropped (from 117 million tonnes in 1997 to 93 million tonnes in 2003) as growers move to cash in on the demand for diversity. "There is a huge demand and a gap that needs to be filled," says Dr Quail. To make the most of this, BRI initiated the 'Chinese Wheat Quality' project in 1999. "We identified that we knew little about the quality of Chinese wheats and what's required of them," he says. The completed project has identified a large demand for wheat with which to manufacture high- quality bread and noodles. "Ensuring Australian wheat meets requirements for bread is a challenge," Dr Quail says. "The 'sponge and dough process' the Chinese use to manufacture bread better suits US wheat. It's something that we need to tackle." However, Australian wheat is well suited to noodle manufacture. While this project is complete, Dr Quail says it is essential that the Australian industry continually updates its understanding of what China requires: "China is undergoing rapid changes that are shifting the socio-economics of the country and its grain demands. It's a market that changes so quickly it really is mindboggling. We can't rest because our competitors know this too." Dr Quail says projects such as this, which explore both value-adding and new export opportunities, are important for Australian graingrowers. "We need to stay in the highest price markets for our products. If Australia increases exports to Asia, as opposed to the Middle East, it will reduce shipping costs. Plus, Asia offers huge marketing opportunities for wheat parcels with specific properties." For more information: Dr Ken Quail, 02 9888 9600, email@example.com The commercial side of the business not only enables the group to supply all local farmers with inputs but also generates funds to invest in value-adding and marketing opportunities. AMPS has 25 grower stakeholders who farm a total of 40,000 hectares. These enterprises annually produce 55,000 tonnes of wheat, 60,000 to 90,000 tonnes of sor- ghum, 15,000 tonnes of corn and barley, 5000 tonnes of faba beans and smaller amounts of linseed, black-eyed cowpeas and canola. For more information: Steve Littlejohns, 0427 474 805, firstname.lastname@example.org BRAD COLLIS Founding member David Brownhill: part of the value chain.
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