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Thursday, 29 November 2012
Page: 10227

Senator XENOPHON (South Australia) (13:18): There have been a lot of discussions about the deregulation of the wheat industry, and it is a great tragedy that we have reached this stage without significant and sufficient safeguards in place for producers. The last thing anyone wants to see is the wheat industry turn out like the supermarket industry: controlled by monopolies and with the growers under pressure.

There have been several inquiries in the past to determine how best to deregulate the wheat industry in Australia and what the best arrangements are. Most recently, the Senate Rural and Regional Affairs and Transport References Committee conducted an inquiry into the operation of grain networks in Australia. That was a very worthwhile inquiry, which I was a part of. The information provided to the committee exposed significant flaws in the grain export networks that must be addressed before complete deregulation can go ahead. Essentially, natural monopolies exist in every state. These companies control grain handling and export from purchasing and storing, to movement, to shipping. That is simply not good enough.

The committee inquiry recommended that Wheat Exports Australia needed a continuing and expanded role in the industry, acting as a combination of ombudsman, accreditor and quality assurance. The committee also recommended that a mechanism to publicise wheat stockpile information should be available to all participants in the bulk export industry, and that the upcoming inquiry into this bill should consider this further. I also made several more recommendations in my additional comments to that report. These recommendations included the establishment of an oversight body for the industry, as well as a mandatory code of conduct relating to the publication of grain storage information, assessment and grading of grain, and access to port and rail transport facilities. My further recommendations related to reviews and investigations that needed to be undertaken by the ACCC or other bodies in relation to specific practices on the part of some bulk grain handlers.

The inquiry into this bill, the Wheat Export Marketing Amendment Bill 2012, by the rural and regional affairs and transport committee also recommended that the government assist the industry in developing measures relating to the publication of information on wheat stock information. There is a clear and compelling narrative running through these recommendations. In the first instance, a lack of clear and complete information on grain stocks that is available to the entire industry is severely disadvantaging producers. This information asymmetry is simply unacceptable. These producers cannot determine when and where they might get the best prices for their product. In fact, this lack of information could be putting the whole industry at risk. In the case of a drought or a crop shortage, the government and other organisations do not have the necessary complete picture of what grain is being held where. The implications of this are obvious.

The other major concern is that there is no oversight of the industry to enforce a code of conduct or to deal with disputes or competition issues. To this end, I will be moving several amendments to strengthen this bill. I note Senator Edwards' sympathy for them; I hope I can have more than Senator Edwards' sympathy. I am grateful for his comments in relation to that, but I hope I can actually have his vote on some of these amendments, particularly on the review mechanism. There must be a review mechanism. I would urge my colleagues in the Australian Greens to consider a review mechanism in relation to this bill, because the implications of this bill are huge for the industry. We need to get it right. If this bill does go ahead in its current form there will be a lack of sufficient safeguards for the industry.

These amendments are designed to build on the agreement with the government reached by the Greens. However, they will go further and insert certain requirements in relation to the structure of the Wheat Industry Advisory Board, the code of conduct—it must be mandatory—and the outline of the act. I will be expanding on these amendments in the committee stage.

Finally, I would like to thank the representatives of Grain Producers Australia, and in particular Pete Mailler and Darren Arney. They have been strong, tireless and articulate advocates for their members. I thank them for the advice and guidance they have given me on this issue.

I want to make it clear that without some form of amendment to strengthen this bill I cannot and will not be supporting this bill. It does not offer enough support and protection for our producers, and I believe it will lead to further market concentration, a severe lack of competition in the market and it will disadvantage our grain producers.