ACCC still in ag dark

The Land Column
Justin Crosby
Policy Director
NSW Farmers has rejected the Australian Competition and Consumer Commission’s draft decision which would remove the substantive regulation of its Carrington port terminal to the detriment of competition for farmers’ grain in Northern NSW.

The decision shows that the ACCC has not learned since the Senate’s Rural and Regional Affairs and Transport Committee which warned last year that the ACCC’s lack of knowledge and understanding of agriculture had led it to fail in the application of competition law to the sector.

GrainCorp is the dominant grain handler and marketer in the Newcastle Port Zone, where its Carrington port operates, and markets almost 45% of the bulk grain exports shipped from Newcastle.  Third party exporters continue to rely on its upcountry network to accumulate export grain cargos.

As the ANZ’s Greener Pastures Report outlines, concentration in the grain handling supply chain post the farm gate, such as in the Newcastle Port Zone, provides a long term detriment to farmers through stifling markets.

In a submission prepared by Shahriar Mofkhami of HWL Ebsworth Lawyers, NSW Farmers has requested that the ACCC withdraws its draft decision and reject GrainCorp’s application to remove its obligation to provide fair and reasonable terms to access seekers at its Carrington terminal.  It shows that the ACCC’s analysis, including the rejection of the need for the new Newcastle AgriTerminal to establish access arrangements under the port access test, is flawed.

We believe that in proposing that GrainCorp should be allowed to discriminate against other grain exporters at its Carrington terminal, the ACCC has failed in its administration of the port access test.  

This test has been established by the Parliament to ensure that vertically integrated bulk handlers, such as GrainCorp, are not able to use their network to the detriment of other grain exporters and ultimately farmers who need competitive markets for their crop.

While we welcome the introduction of Newcastle AgriTerminal into the market place, with the majority of its ownership residing in several larger grain exporters, NSW Farmers is concerned that it may not bring full and open competition.

Without appropriate rules in place that provide for open access to third party exporters, we are concerned that we will continue to see a rush towards closed loop marketing arrangements which will reduce choice for farmers.

If this is what occurs NSW Farmers holds fears that we will be merely substituting a natural monopoly for something akin to the supermarket duopoly which continues to squeeze competition from the demand for farmers’ produce.

Click here to view NSW Farmers' submission. 

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