Posted on February, 3, 2025 at 10:22 am
NSW FARMERS has voiced “extraordinary frustration” over the Department of Agriculture, Fisheries and Forestry’s report on the Wheat Port Code, urging the Federal Government to reject DAFF’s recommendation to replace regulation with an industry-governed voluntary code.
This view is in stark contrast to Grain Trade Australia, which has long pushed for the Wheat Port Code to be removed and replaced by a voluntary instrument.
DAFF launched a second review into the regulation in October 2023, and the first round of consultations closed in February 2024.
In a report published in November, DAFF recommended an industry-managed framework should be developed by GTA and the grain-export industry in place of the current code.
The DAFF report said the new framework should feature elements of the Wheat Port Code, such as a commitment to deal in good faith, timely publication of port-loading statements, a dispute-resolution mechanism, and a commitment to publish standard terms and reference prices.
It also recommended the new framework should be extended to include all bulk grain exports, and not just wheat.
Public consultation on the report closed on Friday.
In response to the report, NSW Farmers said the findings were not backed by “direct evidence”, and were not consistent with the experiences of New South Wales growers.
“NSW Farmers considers that the second review of the code has failed to take into account the state-specific contextual factors that mean that NSW is especially vulnerable to a voluntary industry-led code,” the submission said.
“An overly-generalised analysis of competition dynamics of the grains supply chain that does not recognise why a relaxation of regulation is not likely to lead to more efficient markets in NSW cannot produce an improved outcome for our growers.
“It is NSW Farmers’ expectation that the government take a more considered and detailed view in its response to the review’s recommendations.”
The industry body recommended the government “reject the finding that the Code is a substantial barrier to entry” for new port terminal service providers (PTSP) in NSW, as well as rejecting the conclusion that “there is no evidence of a market failure in the grain supply chain or the provision of port terminal services”.
It ultimately called for the existing code to be strengthened “in light of persistent market failures” to disallow exemptions for PTSPs, expand coverage to all grains and “streamline and simplify” participation in the process to minimise impacts on potential new entrants.
In a statement, NSW Farmers Grains Committee chair Justin Everitt said the grain industry’s supply chain woes would continue unless sweeping changes were made to the Wheat Port Code of Conduct.
“There’s no point having world-class produce if we can’t deliver it, and so it’s clear we need a more effective Wheat Port Code of Conduct if we are to address these issues and get our ports operating like they should,” Mr Everitt said.
“Streamlining the code, making all of its provisions mandatory, and expanding the code to cover other bulk grains such as barley are the three key changes we need to see if we are to stop the high charges and inefficiencies at our limited ports.”
Most submissions into either consultation have remained confidential; however, from those publicly available, it is clear grower groups support the continuation of the Wheat Port Code, with amendments to strengthen its power and broaden its reach.
Independent submissions from Grain Producers South Australia and the Victorian Farmers Federation from February 2024 said the code was not fit for purpose in its current format, and should have more enforcement and oversight powers.
GPSA pointed out the code should be amended “to cover all up-country storage facilities” to give all grain buyers knowledge of stored grain quality, volumes on site, and transparency of terms and conditions.
VFF called for an “independent examination of the Australian grains market and supply chain” outside of the inquiry into the code, which “would then recommend an appropriate mechanism to ensure transparency in the market and enable fair and open competition”.
It also backed a previous finding from the ACCC that concluded that “the regulatory burden of an amended code is likely to still outweigh its benefits”.
National representative body Grain Producers Australia has kept its initial submission confidential but has historically been in favour of stronger regulation.
GPA’s membership base comes from state organisations, including NSW Farmers, VFF, and GPSA.
GPA chair Barry Large said the organisation was yet to finalise its submission and has been granted an extension of the deadline until February 7.
“This has allowed more time after the recent harvest to engage with GPA’s state members…on the views of their grassroots grower members,” Mr Large said.
“GPA have been strong and consistent participants in the WPC’s original design and evolution, since it was first implemented in 2014, to regulate the conduct of port terminal service providers (PTSPs), to ensure fair and transparent access to ports, for bulk wheat exporters.
“GPA’s input into this review process has supported strengthening the code, with necessary regulatory powers and capacity to ensure it can provide proper oversight of market competition and supply chain transparency, to protect growers’ interests and prevent misuse of market power.”
Independent national body GrainGrowers has confirmed it has made a submission to the latest consultation.
“The long-standing position of GrainGrowers is that the current code needs to be improved to reduce the administration burden on Port Service Terminal Providers that are bound by the code,” GrainGrowers said in a statement.
“GrainGrowers believes there is a need for ongoing specific grains-related backstop legislation to protect competition for bulk grains export capacity, above and beyond the base Australian Competition and Consumer Act (2010) protections that are currently in place.”
These views are in opposition to industry body, Grain Trade Australia, which provides trading standards for Australian commodities as used by bulk handlers, brokers, and traders, including major exporters.
It has long called for an end to the Wheat Port Code, and for a voluntary instrument to replace federal legislation.
In a November 2024 member update, GTA said the review had “been thorough” and that there was “good clear evidence to support the findings”.
“GTA is supportive of the DAFF findings, which in our view are in the interests of all industry participants and stakeholders, particularly growers as beneficiaries of the growth in competition and investment.
“GTA will establish an Industry Working Group to commence the process to develop an industry approach as noted in the review findings.”
With public consultation on the review closing last week, the Federal Government will now consider submissions before outlining its response on the future of the regulation.
Source: Grain Central