“Following Senate Committee hearings in Western Australia this week, it is clear that those pushing for deregulation are not growers but it could be well suggested the push comes from those with a vested interest in their own commercial position.

“In the state whose Senators have stated virtually all wheat growers want deregulation, surprise, surprise the Western Australian Farmers Federation, a body that represents the greatest number of wheat farmers, stated that overwhelmingly their growers (about 70%) do not want deregulation.

“If growers do not want deregulation in the East and they do not want it in the West, where does this overwhelming support for deregulation come from? It appears the support for deregulation comes not from growers but from the companies looking to become exporters and entrench themselves as regional based and vertically integrated monopolies.

“The bulk handling companies that currently dominate port infrastructure and up-country storage and handling will now have the opportunity to become exporters and extend their dominance throughout the entire grains industry supply chain, squeezing out competitors and ultimately disadvantaging growers.

“In its current form, this legislation does not guarantee fair and open access, it does not reduce anti-competitive terms and conditions and it does nothing to ensure transparency and accountability up country at the receival end.

“By only looking at port infrastructure, competition can be stifled and growers will have to accept one price from one player in their region and the lack of transparency means that nobody, other than the bulk handler, knows what is in the system and where it is. The recent report by the Allen Consulting Group found that once bulk handling companies are accredited, we will have a major problem with information asymmetries and conflicts of interest in the wheat supply chain before we even get to the ports.

“Anchor deliverers, like anchor tenants in shopping malls, get a good price and the premium they receive is more than made up with a discount to other growers. Currently, this legislation leaves the Australian wheat grower with the potential for a closed shop monopoly protected by the accreditation provisions and no transparency in a legislated form to ensure everyone in the Australian grains industry is treated equally and fairly.

“In the same legislative stroke we have made the same mistake as we did in the fuel industry when we repealed the Sites and Franchise Acts, allowing total vertical integration. Now, instead of total control of a market via vertical integration on import, we will create total vertical integration from receival to export and corporations, if they are legally allowed to exploit you for greater profits to the shareholder, not only will, they must.

“CBH in WA has 95% of the receival infrastructure. If housewives are held over a barrel by two supermarket retailers who can manipulate the market because of centralisation where two players hold approximately 80%, imagine how farmers will go in a market where one player has 95% of the receival infrastructure. Likewise, Graincorp and their major shareholder will have a tremendously powerful position in the east and the receival to export corridor will not be broken up by the inclusion of another player.

“Even the WEA, in 2007, found that with all its market power, the AWB monopoly was unable to reduce storage and handling charges.

“As insult to future injury, we lose also one of our greatest marketing advantages as so ably pointed by Alan Tracy of the U.S. Wheat Associates who is overjoyed by the success of the deregulation campaign in Australia.
Now Australian wheat can compete against Australian wheat in the majority of our export markets that have single desk buyers.

“If this legislation is not blocked or significantly changed, the future is the inevitable regional monopolisation and the discriminations to the growers and a financial boon to certain select players as they are delivered a monopoly position by the Federal Government. Ends