03/08/2026
The Sustainability Trap by Trevor Whittington, CEO of WAFarmers
Last week I wrote about how GRDC's new Nitrogen Mission risks helping Russian, Canadian, American and Argentine farmers grow more grain using research funded by compulsory levies paid by Australian growers.
This week I want to look at another GRDC project.
It is one far more likely to warm the hearts of consultants who make a living from the farming sector, and those who get excited by words like sustainability, climate change and social licence, than it is to earn Australian growers another dollar a tonne for the grain they sell.
On 28 July, WAFarmers Grains President Mark Fowler and I received a letter from GRDC Managing Director Nigel Hart enclosing two reports prepared under GRDC's $55 million Sustainability Initiative.
The first, Investment Opportunity Analysis: Sustainability by the Balmoral Group, proposes new investment opportunities, which is code for 31 new ways to spend your GRDC levy money on projects linked to proving what the market has already concluded that Australia produces clean green grain.
The second, Australian Grains Industry Supply Chain Harmonisation Review by AgTrace Australia, outlines how sustainability, traceability and compliance information could be collected, standardised and shared across the grain supply chain through interoperable digital systems. Which in the language of the paddock means tracking and tracing everything you do on farm and by putting it up in the cloud it will make it easier for others to monitor.
The covering letter explained that sustainability expectations are changing, customers are asking more questions and future value will come from improving information exchange and developing trusted sustainability credentials. Which is GRDC speak for we are solving a problem which is, we have too much money and are running out of things to spend it on.
I read both reports. Then I read them again.
I read a lot of reports, and after a while you develop a feel for them. You can tell when the authors think a workshop means sitting around a boardroom table with a whiteboard and a facilitator rather than working on the tools. The language becomes an exercise in sounding sophisticated rather than solving real problems.
My favourite piece of management jargon comes from the Balmoral Report:
"The synthesis of evidence and gap analysis identifies priority gaps in skills, knowledge, data, tools and operational capability across the grains value chain from growers through to supply-chain participants and enabling institutions."
If growers are prepared to let GRDC spend tens of millions of compulsory levy dollars pursuing the report's 31 proposed projects—including recommendations such as "Build new First Nations strategic partnerships and collaborative projects for advancing ESG in the grains industry"—without first demanding a rigorous, independent cost-benefit analysis demonstrating a commercial return to grain growers, then they are mad.
How will it make grain achieve another $1 a tonne? Will market access improve? Which countries and buyers are demanding what information? Will premiums increase? Or will growers simply face another layer of compliance and rent seekers piling in to clip the ticket?
Buried in the Balmoral report is a remarkable admission. It acknowledges there is a "paucity of evidence" linking ESG practices to financial benefits or improved market returns, concluding that more grain-specific evidence is needed before growers can be expected to embrace the concept.
That is more than a footnote—it is the central issue. If the evidence of commercial benefit is still lacking, why is GRDC wanting project ideas of how to invest tens of millions of growers' levy dollars in expanding ESG reporting systems?
Interestingly, the report itself grudgingly acknowledges that growers' biggest concern is the additional data collection and compliance burden associated with ESG reporting. It also admits there is a lack of grain-specific evidence linking these requirements to financial returns.
Before asking farmers to collect one more piece of data, the industry owes them clear evidence that someone is prepared to pay for it.
Farmers already spend countless hours complying with government regulations, filling out paperwork and keeping records. Why would they voluntarily take on another layer of reporting simply because GRDC and its consultants claim that markets and the community are demanding it, when there is very little hard evidence that widespread grain buyers are willing to pay a premium for it?
If the commercial case cannot be made, then the compliance case should not be made either.
So, after last week's little world tour looking at who benefits from GRDCs Australian nitrogen research, I decided to take another virtue trip around the globe.
This time I wanted to know whether our major competitors were all racing to put sustainability passports on every tonne of grain.
They are not.
Canada is known as the country of woke but their farmers have not embraced sustainability, neither have the Americans. Both countries have opposed building compliance systems first and asking questions later. Quite the opposite to what’s happening in Australia where we seem to have allowed GRDC, NFF and the like to race down the sustainability pathway without some critical analysis.
Both countries are improving digital track and trace systems but that’s a long way from what the sustainability elites are planning for our grain growers.
Russia is even less burdened by Western sustainability fashion.
It became the world's largest wheat exporter not by cloaking itself in paperwork proving it is a great global citizen, nor by ensuring the header driver was trained in diversity and equity before being sent to the Ukrainian front. The global market continue buying Russian wheat because it meets basic specs and it is competitively priced.
Argentina tells a similar story.
Where European customers require additional information to prove their soy wasn’t grown on newly cleared forest, or was not GM, farmers and exporters provide it. Where customers simply want wheat, they sell wheat not wheat plus carbon certificates.
The global grain market is interested in protein, moisture, weight, cleanliness, reliability, minimum residues, freight and price, not how engaged farmers are with the local indigenous or paddock carbon counts.
Which raises the question.
What exactly does sustainability mean?
Every time I hear the word it seems to mean something different.
Sometimes it means carbon. Sometimes biodiversity. Sometimes traceability. Sometimes governance. Sometimes social licence.
Sometimes it simply means another form to complete so somebody else can produce another report.
Strangely, it almost never seems to mean whether the farm business itself is financially sustainable.
None of this is to suggest traceability, quality assurance and environmental impact information has no value. Clearly it does in some markets.
A flour mill sourcing noodle wheat from a defined region may pay for full provenance.
A brewer may want verified low-emissions barley to keep their woke craft beer drinkers happy.
Where a customer wants additional information and is prepared to pay for it, a simple system is all that is needed to provide it.
But more than 90 per cent of Australia's grain is still sold into the bulk commodity market where we compete primarily on price, quality and reliability, and no one in China, Indonesia, Saudi, Vietnam etc is interested in the question of the equity and diversity of the farm workforce.
Consider the typical flour mill in Korea or Thailand buying a cargo of Australian wheat. Does it really care whether the farm had a biodiversity plan, measured its soil carbon every year, completed a natural capital assessment, documented its governance framework, prepared a climate adaptation strategy or reported on workforce wellbeing?
Or does it mainly want grain that meets the contracted protein, moisture, test weight, is free of contaminants, arrives on time and is competitively priced? There is a world of difference between information that genuinely helps a customer buy grain and information collected primarily to satisfy bureaucrats, consultants and corporate ESG reporting requirements.
The reports themselves struggled to produce compelling commercial examples.
One case study particularly caught my attention.
It examined a sustainability framework involving just 12 growers producing around 25,000 tonnes of grain.
Without a price premium the benefit-cost ratio was only 0.8.
In other words, the project cost more than the dollar bonus on offer for providing the sustainability information.
That raises an important question. If the bulk of our grain is still being mixed in the stack and blended into bulk export cargoes, who ultimately benefits from collecting all this additional data farm by farm?
The risk is that the more data we generate the more interest we attract into what farmers do and how they do it.
Then, over time, what begins as a voluntary market opportunity becomes an industry expectation.
Then a finance requirement.
Then a government regulatory requirement.
European farmers know exactly how quickly voluntary sustainability initiatives can evolve into mandatory compliance obligations.
Australian growers would be wise to learn from that experience.
Before spending multi-million dollars on pushing the button on any of the proposed 31 sustainability projects, GRDC should commission an independent economic study asking one simple question.
What is the real cost and what is the real benefit to Australian grain growers?
We need more than a handful of weak case studies and repeated warnings that Australian growers will somehow be left behind if they don't go down this path.
Most of our major export markets are food insecure. They buy Australian grain because it is clean, safe, reliable and competitively priced. Europe is not our primary grain, we don’t need to follow them.
We have already seen how easy it is to commission reports that tell organisations exactly what they hoped to hear. The ACIL Allen review into GRDC's reserves concluded that the solution to having hundreds of millions of dollars in surplus funds was, unsurprisingly, to spend them rather than return them to the growers who paid the levy.
No universal farm-level ESG system should proceed without clear evidence of a genuine market-access threat, a quantified return to growers, and a rigorous comparison with what our major competitors are actually requiring. If the commercial case cannot be made, growers' compulsory levies should not be paying for it.
The GRDC Board now has some serious thinking to do before they sign off on pouring any of their billion dollars in reserves into what these reports are proposing.
They need to commission an independent economic review that asks the questions these reports largely avoid.
What are the full costs to growers?
What are the risks?
What are the measurable benefits?
Which overseas customers are actually demanding this information, and what premium are they prepared to pay for it?
How do the reporting requirements compare with those faced by our competitors in Russia, Canada, the United States, Ukraine and Argentina?
A board with too much money is at risk of spending it just to look sustainable rather than keeping Australian grain growers sustainable.