• Peter Randall launched Randall Organic Rice in 2011. (Supplied)
When it comes to growing your business, exporting is one way to go. But for independent rice growers in New South Wales, that option isn't available to them, because of regulations is the sector which mean SunRice has the sole license to export.
8 Dec 2016 - 2:43 PM  UPDATED 19 Jan 2017 - 3:14 PM

Peter Randall's family farm has been organic for the past 27 years, but it's only in the last five that he says he's fully begun reaping the financial benefits of his crop

That's because, until a decade ago, the rice industry was highly regulated, with SunRice enjoying sole buying power. That meant "all rice grown in New South Wales had to go to SunRice," Peter explains. "And so what we grew here as organic went through their system. And we didn't see the full value of that."

In 2006, the rules were relaxed. By then a drought was depressing many farming businesses, so it wasn't until 2011 that Peter was ready to take advantage of the change. He launched Randall Organic Rice, and started selling his rice under his own label. 

"Which gives us, I say, the 'Woolies margin'. Before as bulk commodity we were paid bulk prices and as a value-adder we get, the full retail price and that's a big difference," he says.

But when it comes to export opportunities, regulations remain. Through the Rice Marketing Board of NSW, SunRice has the sole license to export. The only way for farmers to sell their rice overseas is to sell it to SunRice. Anyone caught exporting themselves faces up to a $250,000 dollar fine.

Peter says it's a situation that's constraining his growth.

"We have almost weekly inquiries from someone, somewhere in the planet, people looking for clean organic rice. And at the moment we cannot service that export market, [as] SunRice still has a monopoly on that. We're not a large tonnage grower by any means, but we could probably service small specialty markets. "

And those markets, he says, could be highly lucrative. In Australia, Peter sells his Koshihikari rice for ten dollars a kilo. "I've heard in Japan, organic Koshihikari, brown or white, can sell upwards of seventy dollars a kilo. Now if I could get a foot in the door of that market I'd be happy to get even half that." 

But Peter admits he's in the minority - most farmers support the current system.

"The actually capacity of a small rice grower to access overseas markets, the freight, the marketing costs, are quite expensive," says Robyn Clubb, the Chairwoman of the Rice Marketing Board NSW. "So the licence was issued to SunRice, which was originally Rice Growers Limited as a cooperative, before it became a corporate structure - to give the growers maximum opportunity to achieve a higher return"

Those export rules are now under review, and Peter is nevertheless hopeful for a change.

In the meantime, domestic wholesale sales make up 40 percent of his business, while farmers markets account for 30 per cent. 20 percent comes from retail, and online sales make up the final 10 percent.

His customers include high end venues like Bondi Icebergs in Sydney and the Windsor Hotel in Melbourne.

And as the business has grown, so has the equipment - much of it imported from overseas.

A $30,000 colour sorter, made by a Chinese manufacturer, has freed the Randalls from the drudgery of checking all of the rice by hand. "We checked every grain looking for the odd stalk. So it was very tedious and time-consuming." Now, the process is automated.

And in 12 months they went from one rice cake-maker to three, all purchased from South Korea for six and a half thousand dollars each. 

Peter says that investment has 'drought proofed' the business, as it only takes a small amount of rice to create each rice cake. If the rice yield is low one year, they could still turn a profit just by making rice cakes, which they sell for $4.50 per 100 grams.

So while export rights remain elusive, imports are helping this business grow.

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