The continuing increases in the price of Round-up, Glyphosate Diammonium Phosphate (DAP) and Mono-ammonium phosphate (MAP) is an indicator of what happens when a monopoly exists in the market. These products have increased exponentially in price over the last 12 months. I've received an email today regarding the price of urea in Gatton; selling for $714 per tonne on the 5th May and will be selling for $974 per tonne next Monday.
Currently the companies which control these products know they can put the prices up to whatever they wish because their only competition is whether you can afford to buy them or not as there is no major alternative competitive pressure in the market place.
Australia does not have divestiture powers, which if existed, would have the capacity to say to a company "if you play up we will break you up." As a consequence, in Australia companies know they have a free-hand to act as they wish and an unconscionable excessive premium is extracted from the farmer with the excuse of "you shouldn’t interfere with pure market principles." But, pure market principles don’t exist when there is a centralisation of market power as this over centralisation acts to inhibit the free entry of competition into the marketplace by use of patents, predatory pricing, exclusive contract terms and other methods. This occurs for one purpose – to make sure you have nowhere else to go other than to them and their close affiliates.
The Senate Select Committee on Agricultural and Related Industries should be shoulder deep in letters from any farmer who has to buy fertilizers for the current crop if they believe they are paying too much. We need strong public momentum on this issue so changes can be brought; changes such as strengthening the Trade Practices Act to include divestiture powers, unconscionable conduct terms and other mechanisms to deal with a problem which is completely evident in our agricultural inputs.
It’s not much good if the price of grain goes to record highs if those who provide the inputs see it purely as a mechanism for them to siphon those profits away from the farmer to their corporate bottom line, safe in the knowledge there is no real competition, currently or potentially.
I strongly encourage all, from grain growers to potato growers and other agricultural farming participants, to become a part of a program to bring about a fairer deal by participation in this inquiry.