Previous PageTable Of ContentsNext Page

Hip pockets and aflatoxin: A positive model for change in the peanut industry

Greg Mills, Graeme Wright, Nageswararao C. Rachaputi, Jim Mackson, Alan Broome, Jeff Tatnell, Steven Krosch

Department of Primary Industries Farming Systems Institute
P O Box 23, Kingaroy, Queensland 4610, Australia


Several years ago Ralph Nader stated in an ABC radio interview that “consumers have won the battle”. One of the consequences of this is that they want and demand safe and healthy food products. This paper is all about a value chain approach to industry extension that is not production driven but meeting the needs of this new consumer focus. Ownership of a production problem has been accepted at producer level through effects on the profitability of individual producers and the development of management options that provide effective solutions. It also demonstrates an opportunity to value add to Grains Research and Development Corporation and Department of Primary Industries sponsored R & D with dedicated and significant funding for a purely extension focussed project from the post farm gate players. Indeed the project is possibly an industry “first” for grain production in Queensland. It also demonstrates how R & D projects can be clearly defined yet link very effectively with an extension project component and deliver outcomes in a clear and concise, industry embraced format to enhance the rate of adoption.


Aflatoxin is the name given to a group of toxins that are produced by two soil borne fungi Aspergillus parsiticus and Aspergillus flavus. These toxins occur in a range of grain commodities but are more important in peanuts because they are more susceptible to the fungus and less processed than other food products. Removing affected peanuts during processing is expensive and represents a significant loss to both farmers and processors alike. Proposed new legislation on minimum aflatoxin levels may preclude poor quality peanuts from even being delivered.

The Australian peanut industry is very focussed in terms of production and processing with approximately 90% of growers located in Queensland and all of the processing capacity for raw product being within our borders. The industry is seen as both relatively successful and profitable but has overcome some very difficult challenges in recent years.

Major growing areas are the Kingaroy/Burnett region, southern and central Queensland, the Atherton Tableland and interstate locations at Katherine and Bourke. About 90% of the crop is bought and primary-processed by the Peanut Company of Australia (PCA). The remainder is divided amongst a group of independent shellers who operate from the Burnett and Clifton. The industry is serviced by the Queensland Department of Primary Industries (DPI) peanut research, development and extension (R,D&E) team based at Kingaroy and regional DPI staff located at Warwick, Gatton, Biloela and Mareeba. All shellers offer field expertise to varying degrees, foremost among these being PCA who have several skilled agronomists located at Kingaroy and Mareeba.

An important element of field production is the expertise offered by specialist independent and commercial agronomists. Independent consultants have traditionally had greater involvement in the production of irrigated crops where there is a capacity to pay for specialist field services. Hence regional agribusinesses, the shellers and DPI have tended to service the dryland industry.

Despite being a very close industry in terms of networks, the spread is very geographically diverse with very little expertise outside those who have a primary interest in the business. It is traditionally not a crop that agronomists from other disciplines know much about. Hence when looking to achieve change and technology adoption the industry has had to draw heavily on resources from within and exploit existing networks to implement outcomes effectively and efficiently.

In recent years there has been a major shift away from the Burnett (with it's concentration of dryland aflatoxin susceptible crops) with increasing reliance on more stable, high yielding production areas that offer good growing conditions and irrigation. Peanuts are the only broadacre crop that can rival cotton in terms of profitability and this has helped to increase peanut production in recent years and hence maintain Australia's ability to largely meet demand.

The industry is however under considerable threat and foremost of these issues are:

  • Productivity and continuity of supply of high quality profitable peanut crops in the face of a continuing cost/price squeeze and extreme seasonal variations.
  • Imports are a continuing threat as Australia is still a nett importer, being unable to meet rising consumption. Difficulties also arise in filling specific kernel grade requirements. Imports are often cheaper.
  • Food safety is both a threat and potentially a major advantage. Aflatoxin contamination of peanuts is a major public health issue around the world. Australian producers have the opportunity to solve this problem in order to gain access to markets, premium prices and a commitment from processors to restrict the quantity of imported peanuts.

In recent times, international regulatory bodies have reduced minimum safety limits for aflatoxin contamination in recognition of the continuing threat to human health (Mycotoxicology News, 1998). For example in Indonesia aflatoxin contamination in peanuts and maize accounts for an estimated 20,000 deaths annually (Lubulwa & Davis, 1994). Australian peanuts by world standards are very healthy and to this end government regulatory limits have been set at 15 parts per billion. The industry had been struggling to meet this new standard despite a long-standing knowledge of the problem.

The regional impact of aflatoxin in recent years had been devastating, particularly in drought affected Burnett crops. The industry had to find ways to reduce, manage or even eradicate this threat before it could prioritize any other production and quality issues. Prior to 1996, individual growers had not borne the true cost of aflatoxin; it had been shared across the industry. When processors introduced measures to force growers to accept the responsibility for contamination, the industry rapidly fell into a crisis situation.

The peanut industry needed to embrace the issue intimately and seriously because it affected all players all levels of the value chain. Ultimately processors cannot market Australian peanuts effectively if the problem was not addressed at a farm level. In past years the percentage of the Australian crop that has been affected varied from 10 - 70% in regional production areas depending on the magnitude of 'end-of-season' drought. Contamination affected a devastating100% of loads delivered to the Gayndah depot in 1996 (Hansen, 1999).

This problem needed a new paradigm for change, since despite 20 years of aflatoxin awareness it was still the major constraint to industry viability.


The agent for change was the "hip pocket". This was relevant to all levels of the value chain. Dryland and irrigated producers are all affected by aflatoxin to varying degrees but the problem is more important to dryland farming systems. The real implications for irrigators were more the reputation for Aussie peanuts maintaining an "aflatoxin free" status and the fact that high quality aflatoxin-free irrigated peanuts were subsidising the increased processing costs of high aflatoxin status dryland peanuts. The issue was driven very much from the food processing/consumer end of the business. However the answer has not been one of simply penalising the growers for something which was seemingly "out of their control" with the implied result that farmers would simply leave the industry. Peanut processors and end users have been loyal and supportive of the need for change and this spawned the inclusive and novel approach outlined here.

In 1998, the DPI's Farming Systems Institute at Kingaroy secured funding from GRDC to conduct a project on "Strategies to Reduce Aflatoxin in Peanuts". A logical addition to this work was ensuring that the findings were not only extended but also rapidly adopted. Over the past 20 years the industry had become both aware and yet complacent about the causes and management options for aflatoxin to varying degrees at each level of the production chain. However despite this there was poor recognition of key causes, the overall importance they had, the ability to manage these factors and the cost implications for the producers. Hence there had been very little adoption.

Unfortunately, many of the recommendations arising from previous research were not implemented, as there was no price incentive to adopt new practices such as optimal harvesting times, etiella and white grub control and efficient drying techniques. All these practices which were shown to have large impacts on minimising aflatoxins (Graham.1982a, 1982b). Indeed it is interesting to quote Dr Graham's report, where his results had clearly shown that early harvest of peanuts could reduce aflatoxin contamination, albeit at a slight to significant yield penalty. “Accordingly, the production of an aflatoxin-free crop would only be possible at a substantial financial loss due to unrealised yield. Thus in purely financial terms, it is appropriate for the grower to place considerations of yield above that of aflatoxin reduction”. These recommendations might be quite different in 2001, where at a price penalty of between $200 to $750 per tonne for specific grades, it is economic to harvest the crop early (PCA, 1999/2000).

The aim was to take all levels of the industry along the learning curve, hand-in-hand with the R, D & E to a position where information and recommendations were embraced, owned and acted upon.

The unique aspects of this project are that it has involved the whole industry in planning through to execution. The key to success was in achieving industry endorsement and support for the project by clearly demonstrating that the solutions to the problem were both demonstrable and practical, backed by scientific evidence, had not previously been adequately extended and that DPI had the skills to deliver these outcomes in a tangible and economically beneficial way to all levels of the industry. More importantly it has been funded, and continues to be funded, by a cash grant and a special industry levy from all peanut processors that was negotiated by project staff and instigated for this specific purpose. Levies are deducted from the proceeds of all kernel sales to processors and these costs are passed on down the consumer chain with positive rather than negative effects.

The funding for the “Aflatoxin Information and Extension Project” has enabled the employment of a full-time extension agronomist along with a range of operating expenses. The DPI has been able to very effectively maintain their independence despite the industry dominance displayed by large processors such as PCA, Mars, Sanitarium or Kraft. It is a reflection of processors' commitment to constructive and positive extension outcomes resulting from excellent applied research.

Results from the R&D project (Wright & Rachaputi, 2000, Mackson,2000) have clearly demonstrated that the aflatoxin problem can be minimised by the use of an integrated management package involving:

  • Use of agronomic management practices, including pre- and post-harvest strategies that minimise aflatoxin contamination by the fungus Aspergillus flavus/parasiticus.
  • Use of peanut varieties having aflatoxin tolerance (including tolerance, avoidance and escape mechanisms).
  • An effective extension program to transfer the above research knowledge to Australian peanut growers

All parts of the program have had immediate application by producers and have linked very effectively to deliver outcomes. Growers, contractors, agronomists, shellers and consultants have been involved in all the practices that have been trialed, implemented, and reported on through to crop delivery.

These management practices include:

  • Crop rotation
  • Choice of variety
  • Identification & segregation of diseased or stressed areas
  • Timely pulling (maturity)
  • Inverted windrows (new pullers)
  • Threshing in 3 to 5 days
  • Pre-cleaning
  • Drying efficiency

The above elements have been developed and presented in ways that have enhanced each stakeholders understanding of:

  • the incidence of aflatoxin
  • rating of crop quality
  • profitability and grower returns
  • consumer image of Aussie peanuts
  • marketability of Aussie peanuts

Action learning

Perhaps one of the keys to the success of the whole program has been the very close involvement of engineering firms, farmers, contractors and shellers in the field development work for inverted peanut pullers and drier modifications. All participants had a keen dollar-driven interest in the development, adoption and outcomes from this work. More recently the model farm program is evaluating ways to include all of the latest peanut production techniques into a fully integrated management package. Participants have been encouraged to participate in the design, modification, and assessment of pullers and crop production techniques with plenty of opportunity for critical evaluation of the work. Farmers have developed a great deal of ownership of these developments which has made them very willing adopters.

The presentation of this information has been in a comprehensive format which is inclusive and offers many choices and opportunities for all stakeholders to receive information. This included: -

  • Seminars and field days
  • Aflatoxin video
  • Crop Notes/Brochures
  • Contact with DPI personnel
  • Contact with Consultants
  • Contact with Shellers/Processors
  • Contact with farming neighbours and group learning
  • Evaluation of project impacts, adoption and future directions

Every peanut grower in the industry received a copy of brochures and most importantly the “Aflatoxin Management Video” in which many cooperators appeared.


  • There has been a massive variety shift from aflatoxin susceptible varieties (NC7) to tolerant varieties (Streeton & VB97). NC7 is effectively not grown in dryland production now. (PCA intake statistics 1996-2001)
  • Awareness of the impact of timely pulling with growers even prepared to pull early.
  • Amazingly the industry has seen the development and initial adoption of four new peanut puller designs which are uniquely Australian and represent the greatest amount of engineering innovation the industry has seen for many years.
  • Growers' preparedness to use pre-cleaning to improve drying efficiency and reduce levels of aflatoxin affected kernel.
  • Awareness of drying issues and concrete efforts to modify and improve drying systems and management.
  • Introduction of grower declarations in consultation with DPI to act as incentives for adoption of best practice techniques.

As one major and cautious adopter recently stated, "We knew this all the time; it's nothing new”. This represents no threat to the goals the project set out to achieve. The benchmarked rate of adoption for aflatoxin reduction techniques in 1997 was effectively zero. Aflatoxin contamination at critical levels has been as high as 70% of deliveries during previous years despite all the good information and “knowledge” available to the industry. Aflatoxin incidence in the current harvesting season has been running at around 9% of deliveries which is a huge improvement considering that industry forecasts would normally have placed this at around 40% based on past history.

Farmers are talking positively about their ability to manage aflatoxin rather than perceiving it as a constant and over-riding threat. To a large extent the feelings of helplessness about dealing with the problem have significantly diminished and this is currently being measured by an intensive industry survey. Profits have improved for growers and processors with a renewed level of confidence in dryland production systems.

The shellers, having understood the difficulties of managing aflatoxin have instigated two separate programs. One pays producers after primary processing based on the ability to reduce alfatoxin contamination in finished product. The other rewards growers who effectively embark on an aflatoxin minimisation program by automatically upgrading the value of any aflatoxin-contaminated loads on delivery. Both systems aim to provide incentives to growers rather than penalise them. The latter system is a new industry benchmark and probably a world-first and truly reflects their acceptance of the management strategies developed by the DPI's R,D&E program. In effect the shellers have enhanced the economic incentives to encourage adoption of new technology.

An important element of this whole project has been the desire to provide excellent value for money to our industry partners. At all stages of the process, the non-producer stakeholders have had active involvement and input. This has been achieved and improved their level of understanding about the difficulties faced by producers dealing with many other aspects of successful peanut production. Industry updates have served to break down the barriers and improve communication between processors and producers. Processors have improved their industry relationships and producers have better appreciated the increasing demands upon processors to produce healthy and safe food. Processors have been willing to talk to producers about the commonality of their goals in industry forums with the two groups being less adversarial.

Aussie peanuts have maintained their market dominance and the strong industry position will promote continued expansion. The industry has reacted very positively to the significant contribution that processors have made to ensuring it's future viability, and importantly, due recognition has been paid at every opportunity. Additional benefit derives from these Australian companies having a very positive element to hang their hat on in the wider public domain - safe food, Aussie food, from Aussie farmers. This and associated promotions have increased the overall consumption of peanuts by 10 -15% over the last year according to industry estimates (Hansen, 2000). Australian demand for the 2001/2002 season will grow another estimated10-15% (Hansen, 2001).

There are now distinct possibilities for future funding given the initial success of this project with a view to addressing more complex farming systems issues relating to peanut or indeed other crops that offer such value adding potential which are not currently funded through conventional channels.

Highlights of Aflatoxin Project Survey (Broome, 2001)

Responses were obtained from 39% of industry participants via mail and 25 personal interviews with growers and processors.

Survey results

Information delivery

99% are aware of the DPI management project to minimise aflatoxin in peanuts and 96% have had ease of access to information on aflatoxin minimisation practices.


Industry change

69% felt that the project had improved or greatly improved their understanding of the incidence of aflatoxin.


Future research and development

62% believe there are aspects not being addressed.


Funding and cooperation justification

Justification, both for the funds contributed, and the cooperative efforts of all sectors of the industry are best demonstrated by the high awareness of the project (98%) and the substantial, and considered response from all who participated.

The fact that there has been a marked reduction in the incidence of aflatoxin since the project's commencement is a significant factor, but it needs to be acknowledged that improved weather conditions have made analysis of this reduction more difficult to quantify.

The cooperation issue is demonstrated by the number of participants from all sectors prepared to be involved in further research and extension activities for the benefit of the peanut industry.


So when people tell us they haven't learnt anything new but concurrently report that their knowledge of individual aspects of aflatoxin has improved, and their ability to manage aflatoxin is better and the on-farm incidence has declined, we smile. These people are adopters; they don't need convincing but are ready to move on to the next 'hip pocket driven' innovation.

There is an excellent role for clearly defined extension projects with discrete goals, staffing and funding which complement R &D. Such projects should utilise “industry-qualified” people who are competent to interact with all stakeholders in an effective and multi-disciplined approach that intimately involves stakeholders in the process.

Projects should aim to use collaborative skills both internally and externally to efficiently deliver the project outcomes but more importantly promote adoption. A “learn with us” rather than “here are our learnings” approach can promote willing adoption and a far greater level of understanding and prioritization of key issues, especially when so many aspects of the work are linked to nett industry/producer returns.

Providing increased value for money to funding bodies and private industry with improved outcomes for all concerned is a reality. Commercial linkages can be advantageous and effective in a value chain approach and do not need to compromise a scientific approach to problem solving. Such approaches can lead to real enhancement at all levels of the value chain.

Listening to end-users and consumer demands can bring about positive changes for producers. The primary catalyst for change in the peanut industry has been and will continue to be dollar-driven. This project has captured that economic data and presented it to all stakeholders in a very profound way. To make the best use of the data, the project developed the best possible learning environment for growers, contractors, agronomists, processors and marketers to share and mutually benefit from the outcomes.

These outcomes based on commercial linkages are more easily measured, providing an excellent benchmark for evaluating the potential for future investment in R, D and E.


  1. Mycotoxicology Newsletter, August 1998, Volume IV, No.2.
  2. Lubulwa, A.S.G. and Davis, J.S. 1994. Estimating the social cost of the impacts of fungi and aflatoxin. In Stored Product Protection. Proceedings of the 6th International Working Conference on Stored-Product Protection (E. Highley et al., eds), pp. 1017-1042. Wallingford, UK: CAB International.
  3. R. J. Hansen, (1999). Overview of Aflatoxin Contamination in the1998/1999 Crop - A PCA Perspective. Proceedings of the Aflatoxin Research Update Workshop, August 1999.
  4. Graham, J. (1982a). Preharvest aflatoxin contamination in peanuts. QDPI Bulletin No QB8001, pp37.
  5. Graham, J. (1982b) The occurrence of aflatoxin in peanuts in relation to soil type and pod splitting. Food Technology in Australia. 34: 208-12
  6. Peanut Company of Australia - SQ Streeton Delivery Contract 1999/2000
  7. Wright, G.C., Rachaputi, N.C., (2000). Minimising Aflatoxin Contamination in Peanuts QDPI, National Peanut Update, October 2000.
  8. Mackson, J, (2000). New Practices to Increase Your Profits - A Summary of Aflatoxin Minimisation Trials. Proceedings of the QDPI Farming Systems Institute, National Peanut Update, October 2000.
  9. Hansen, R. J., (2000) Extract from address QDPI Farming Systems Institute National Peanut Update.
  10. Hansen, R. J., (2001) Extract from address QDPI Farming Systems Institute Grower Update, Texas, Qld., July, 2001
  11. A.C. Broome, (2001) Peanut Aflatoxin Survey Results - yet to be published.

Previous PageTop Of PageNext Page