GRAINCORP has slammed calls by South Australian senator Sean Edwards to nationalise the allocation of grain export capacity.
David Ginns, corporate affairs manager at GrainCorp said introducing legislation compelling the four grain port operators to run a single allocation system was a retrograde step.
“Why do politicians in this country continue to call for nationalisation of agricultural assets, which would take away the rights of the owners to manage them the way they wanted?
“It’s not something you see in any other industry.
He also criticised the current arrangement, which means port operators are bound by access agreements overseen by the ACCC.
“There hasn’t even been an evaluation of the elevators to see whether access agreements are required.
“The process to assess whether infrastructure should be regulated has not been done.”
Senator Edwards criticised current port booking processes, saying that high exit fees distorted the market.
Mr Ginns, however, said non-refundable fees were introduced following the 2008-09 harvest, where his company had $2/t booking fees.
“This sparked massive speculation by exporters, who booked 12.5 million tonnes of capacity, yet only executed 4.5 million tonnes.
“Following that, we changed the system to a non-refundable fee and now the bookings roughly represent the tonnes executed, as there was an incentive not to speculate.”
Viterra, South Australia’s port operator, also said its access arrangements were working well.
Dean McQueen, Viterra’s grains executive manager said Viterra’s terminal access met all legal requirements and was fair and open to all exporters.
“In the 2010/11 marketing year, almost 8 million tonnes of grain was shipped from Viterra’s port terminals by 15 different exporters, and more than two thirds of all grain from South Australia is now being shipped by companies other than Viterra.
“This constitutes a new all-time record for annual grain exports shipped through South Australian ports and demonstrates the efficient operation of the export supply chain.
He said there was already enough regulation in the grain export business.
“Viterra’s port terminal operations are heavily regulated via a combination of State and Federal bodies, such as the Essential Services Commission of South Australia, Wheat Exports Australia and the ACCC.”
He said Viterra’s revised port access arrangements would include an auction system, which will begin mid-2012.
Mr Ginns said the government’s best approach to port arrangements was to let the market find its own level.
“This system needs to normalise along commercial lines, its not appropriate to impose more and more regulatory restrictions.
“You look at the grains industry as a whole, you can see it has benefitted since 2008 from the reduction in regulation.”
He went on to have a swipe at rival exporters, who he claimed were trying to gain commercial advantage from the regulatory process.
“The continued use of the regulatory process by companies that don’t have an investment here themselves really sticks in the craw.
“In what other country would you disadvantage the companies that are investing in infrastructure?”
CBH could not be reached for comment prior to publication.
Email a friend