Port access next hurdle

The ADM saga ... brought port access undertakings back into the spotlight

AMONG all the tub-thumping surrounding the ADM deal and the vivid images of the big, bad multinational, its possible to lose sight of the fact many of the issues surrounding the deal will not go away now GrainCorp remains primarily in Australian hands.

Sure, the issues of national interest and the pitfalls of outright foreign ownership are resolved, but the fundamental problems of ensuring port facilities are used fairly remain up in the air.

One of the silver linings of the ADM saga was that it brought topics such as port access undertakings back into the spotlight.

September is rapidly rolling around, and that is when the current port access undertakings expire.

There is significant concern that the industry taskforce will not come up with a meaningful structure to replace the current undertakings.

Most grower organisations are worried about any sort of voluntary code, saying that the penalties for breaching voluntary codes traditionally equate to a slap with a feather duster.

Equally, a government enforced code cannot be too onerous or it will place too high a financial burden with those that comply.

There is also the issue of new port operators, such as Bunge in Western Australia, Emerald in Melbourne, Victoria, and the Newcastle grains terminal in NSW, which are not subject to regulation, along with the booming container trade. Is it fair on the big bulk handlers to have to bear the cost of regulation which is not required of their competitors?

What is the solution?

Answers vary, from the radical – decoupling all grain marketing businesses from port operating businesses, to more low-key approaches. Within grower ranks there is support for a hybrid model, where there is an industry developed code, but with enforceable government-backed disincentives for non-compliance.

Grower groups still argue that they are happy to cop the extra cost associated with regulation for the peace of mind of ensuring free and open port access. All port operators have shown they are willing to comply with regulations, but that is not to say they will do any more than they have to.

At one level, business demands, the need to see the port facilities working and earning money will mean there is only so much room for manipulation, but it appears at this stage most in the industry would be happy with some level of regulation to ensure the system runs smoothly as its makes the quantum leap from a single desk to a fully functioning deregulated market.

StockLand
Gregor Heard

Gregor Heard

is the national grains writer for Fairfax Agricultural Media
Date: Newest first | Oldest first

READER COMMENTS

GFA
10/12/2013 3:31:52 AM

One simple answer to the question is to make sure there are at least two competing grain silo owners at each terminal. Another is to put the terminals back into the hands of a not for profit operator.
Grain of TruthRural Press grains writer Gregor Heard on the big issues facing the broadacre farmers today.

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