Press Release

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GOVERNMENT’S RE-REGULATION OF WHEAT INDUSTRY UNNECESSARY - PGA

2014-08-14

The Federal Government’s intention to impose a mandatory access code on grain Port Terminal operators, is unjustified, unnecessary and counter productive.

 

Since 2008 the wheat industry has been transitioning to a free market.

 

The original access obligations were limited to the vertically integrated Port Terminal operators and were designed to prevent any potential anti competitive behaviour by those operators who enjoyed a monopoly incumbency advantage over competing buyers and traders.

 

Experience over the subsequent years has revealed that commercial pressures and the need to maximise throughput, together with existing port access undertakings under the regulatory oversight of the Australian Competition and Consumer Commission (ACCC) backed by the Competition and Consumer Act have all combined to give the grain export trade confidence about port access.

 

Considering that the significant gains made by the industry since 2008, such as greater market penetration, better integration with international supply chains, a shift towards supplying markets in the first half of the year when Australian grain is in most demand, additional investment in infrastructure with more in the pipeline and better marketing opportunities for growers, has been due to the removal of statutory controls, it is hardly the time to begin reintroducing them.

 

There is no evidence that the reintroduction of more regulatory controls will deliver any net benefits.

 

Indeed the threat of capricious intervention by government is likely to be seen as a reason not to invest in the grain industry.

 

As the real answer to inefficiencies in the grain industry is proving to be competition and investment, the Federal government should be encouraging it rather than deterring it as they intend to do, by applying an inflexible mandatory access code to Port Terminal operators.

 

The recent Wheat Industry Advisory Taskforce Final Report noted that there was no market failure in regard to the provision of market information or wheat quality issues.

 

In other words these matters are being managed by existing commercial processes.

 

Likewise the grain industry should stay with what works in respect to port access undertakings, that is, the voluntary code of conduct, voluntary publishing of shipping stems and port access protocols and port access disputes dealt with by the ACCC under Part 111A of the Competition and Consumer Act.

 

Federal Liberal Party members from WA were strong supporters of the 2008 wheat deregulation legislation.  WA growers have derived significant measurable benefits from the reduction of government involvement in the industry.

 

With only six weeks to go until 30th September, when the repeal of the Wheat Export Marketing Act 2008 is scheduled and the mandatory access code is introduced, it is time for our Federal representatives to become active in the defence of the grain industry and especially the Western Australian wheat grower.

 

During the Wheat Export Authority debate of 2012, the Federal Liberal Party Members of Parliament, including the party’s leadership, promised that full de-regulation of the wheat industry would be finalised.

 

Anything less than repealing the Wheat Export Marketing Act 2008 would mean that Federal Liberal Party Members of Parliament are sacrificing the true interests of their constituents for their own personal ambitions.

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