Senator JOYCE—Tell me about the Eastern Wheat Growers. When were you formed, and how many members do you have?

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Mr McLaren—We do not have a huge membership. We do not claim to be a representative body. We are a lobby group looking for reform. I think that when you go down the path of economic reform it is always going to be a lonely path because economic reform in any industry is never popular. Humans do not like change. We do not hide the fact that we do not have a huge membership, but we do have a diverse range of members up and down the eastern seaboard—some of the biggest wheat growers in Australia, some of the smallest wheat growers in Australia. We would prefer to be judged on our arguments and our case rather than the size of our membership.

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Senator JOYCE—I will go back to the question. How many members do you have and when were you formed?

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Mr Kellock—We were formed after the UN oil for food scandal broke. We were formed with the intention of providing an alternate view to that expressed by the mainstream lobby groups. We were keen to see wheat marketing move into a more transparent and competitive structure. We believe we represent a growing number of modern grain growers.

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Senator JOYCE—How many members do you have?

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Mr Johns—I can confidently say we have no formal membership but we fill a vacuum in the eastern states. Clearly the existing—

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Senator HEFFERNAN—I do not think it matters a rat’s arse how many members—

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Senator JOYCE—It is for you to ask that question later on, Senator Heffernan. How many members do you have, or do you not have any?

0Senator Heffernan interjecting—

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CHAIR—Excuse me, Senator Joyce. I ask that we have order. There is a structure. If senators ask questions, answers shall be given. We will give people time to give those answers. I must clear up Senator Heffernan’s comment. It does matter a little bit. There have been a number of representative bodies here over the last three days of hearings and a lot of them were asked how many people they represented. Please continue answering. There is no quota here as to how many members you do need or you do not need. You are representative of a group of growers. Please continue, Senator Joyce.

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Senator JOYCE—So you do not have any official membership?

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Mr Johns—We do not have a formal membership list. We have many people who support our views.

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Senator JOYCE—How many?

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Mr Johns—We cannot put a figure on it.

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Senator JOYCE—Roughly?

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CHAIR—Senator Joyce, I think Mr Johns and Mr Kellock have made it very clear that they represent a group of growers. There are probably a lot of other questions you may wish to ask the growers. Please continue.

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Senator JOYCE—You talked about regional monopolies and you also talked about good competition policy. Can you please refer me to the part of the good competition policy that you would use to break up regional monopolies when they come into existence? It is not there under division 3 of the Trade Practices Act.

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Mr Kellock—We are not as confident as you are that regional monopolies will exist.

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Senator JOYCE—Let us say that I am right and you are wrong and they do exist—like they do with Coles and Woolworths and the horticultural industry. If the Trade Practices Act is unable to break it up with Coles and Woolworths and the horticultural industry, why would you be relying on that same act to help you out in the grain industry?

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Mr Kellock—We are basing our beliefs on what happens in all other grains, Senator Joyce. You only have to look there—and regional monopolies, to my knowledge, have not been raised by one single party. Not one member of the government has brought an example forward of where regional monopolies are a problem in all other grains. If you have a look at that, 70 per cent of the grain production in this country is marketed under a free market system, and there is not one example that I have heard of where regional monopolies are a problem.

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Senator JOYCE—The reason for that is that there is an issue called countervailing—

0Senator Heffernan interjecting—

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CHAIR—Senators, I ask for order. I am sorry, Senator Joyce, you are in the middle of your question. Senator Heffernan, is it on this point?

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Senator HEFFERNAN—It is exactly on that point. To try to give some validity to the argument because this is a concern, say, for instance, with something we can touch and feel, GrainCorp at the Junee terminal says to Hanlon Enterprises and everyone else who might want to accumulate there, ‘No, we’re going to run our own accumulation here. You go and find somewhere else,’ and that AWB Ltd over at Stockinbingal says, ‘We want to warehouse our wheat from Gundibindyal in their facility,’ and they say, ‘Sorry, old mate—go and find somewhere else.’ How do we avoid that? Is that a possibility?

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Mr McLaren—Yes, absolutely. The way to avoid it is to enforce an equal access regime throughout the supply chain. My understanding is that at this very moment the bulk handlers are working on an industry code of conduct that they would be looking at all traders to sign off on, which would give equal access and no price discrimination to anyone who wants to use those assets. Interestingly, the bulk handlers are not going to make any money if people are not putting grain in their storage system. They need throughput to make money.

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Senator JOYCE—You would be aware, of course, of Telstra’s last eight years in court arguing about access regimes and their demand for an 18 per cent return on their infrastructure. You believe that there is a code of conduct. This code of conduct is not part of the legislation, so the only part of the legislation that talks about access is in regard to ports. How are you going to guarantee access at receival?

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Mr Brennan—I should point out I am delivering into the Victorian system, mostly at GrainCorp and very occasionally at AWB. Tom Keene, who I think retired from GrainCorp, has pointed out to shareholders that the biggest competition GrainCorp has in the storage business is on-farm storage. This is different in Western Australia and South Australia, where there is not a huge domestic market. But the domestic market in the eastern states is dynamic, growing and substantial. My family have built silos from time to time, and we can get a return. You cannot financially store your whole crop in one go or build an entire storage system, but compared to the handling charges we pay it is a viable economic proposition to invest in on-farm storage. It is a different debate in Western Australia, where it is an export market—I am not denying that—but in the eastern states Mr Keene has got it right. My on-farm storage is competition for what I do with GrainCorp. I am not running down GrainCorp, but for a lot of us there is a business case to be made for storing on the domestic market, so I do not think access to GrainCorp at a competitive price is an issue. They will price it competitively knowing full well that, if they charge too much, farmers will just build more and more storage.