IT’S A SIGN of the increasing globalisation of the grains industry that events in snowy Saskatchewan province in Canada could have a big impact on the Australian grains industry.
The proposed buyout of Viterra by either Glencore or Cargill will change the marketing landscape here for the upcoming harvest.
Foreign ownership is already here in a big way, with Cargill, Glencore and Viterra all up there in the top five grain exporters out of Australia, so that in itself is not an issue.
The big question boils down to competition, and this poser remains the same, whether it is Australian, Canadian or Zimbabwean businesses in question.
Farmers want to know whether there will be a reduction in competition that negatively influences their business.
The Australian Competition and Consumer Commission (ACCC) will look into any potential deal and how it affects the Australian businesses in question.
Should it be deemed a takeover will reduce competition, perhaps there will have to be a divestment of certain assets.
This is more of a factor with Cargill, which owns GrainFlow, than with Glencore, which is concerned only with marketing, but farmers will be watching anxiously, especially in terms of ensuring sufficient market information is released by the marketer/storage operator.
This is a question we already have, it would be just on a larger scale if there was a takeover.
Does the ACCC has enough bite to contend with the issues already sitting in front of it, such as the vexed issues of port access and stocks reporting.
Port operators say there is already too much regulation, but farming lobbies remain unconvinced that there were sufficient checks in place to stop port operators exploiting their position as marketers, storage and port operators.
The feedback from exporters was that this year’s export program has been much smoother than the year before, but we feel it is the farming sector itself that is missing out.
There’s crucial information about grain stocks that would have a tangible impact on growers’ marketing program that is not coming out in time.
There is more to competition than just port access for other exporters, and the farming lobby need to push to ensure their right to transparent information on the Australian crop is released in sufficient time for them to be able to use it when making their own marketing decisions.