Sort out the ports

VIRTUALLY since the ink was dry on the new wheat marketing act ushering in deregulation, there have been concerns surrounding port access.

An ACCC inquiry has been held to ensure that the single desk was not replaced by a series of regional monopolies centred on the bulk handlers that held the all-important port facilities.

But while that investigation found that there were sufficient checks in place to ensure the port operators remained honest, the bush telegraph has continued to work overtime with traders unhappy with the way the ports have been operating.

It’s been a tough issue for the media to report on, as while the allegations fly thick and fast 'off the record', it's a different story when traders have been asked to put a name to the claim.

The understandable response is that they beg off, saying that going public would jeopardise their already fraught relationships with the port operators.

Another major factor behind the reluctance to speak out over their issues with port access is the unwillingness to alarm flighty international customers, who may elect to source grain elsewhere if there is a perception that there will be issues in doing business with Australian exporters.

The rhetoric of the three bulk handlers is that market forces alone will be enough to create a fair market for port access and that claims to the contrary need to be backed by hard data before they can be taken seriously.

And they say the "rumours" are merely the ruminations of disaffected grain businesses looking to get their own way.

At face value, that’s a fair call, yet the waters are muddied when one weighs up how much a trading business has to lose by going public with their concerns.

One business, in particular, has been in constant conflict with a port operator and has repeatedly considered releasing the details of its grievance, before deciding the commercial ramifications were too great.

There are eerie parallels between their stance and that of AWB under the single desk, when the knowledge that it held the whip hand in relation to other members of the supply chain meant they could afford to talk tough.

Pure market signals would rule the day in a decoupled business, but while the port operators are still actively competing against other would-be exporters in grain marketing, close checks need to remain in place to ensure rules are not bent to artificially drive up demand for the ports.

In a vacuum, governing port access under the Trade Practices Act may well be enough, but in an industry still very much with its training wheel on regarding deregulation, the port access undertakings, however imperfect they may be, remain an important steadying influence well worth whatever added costs they create.

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READER COMMENTS

Ash
21/06/2010 6:26:25 AM

What twaddle. A grain of truth indeed - perhaps barely a grain? While giving the benefit of the doubt to unnamed 'traders' who smear the reputations and intentions of unnamed port operators, you perpetuate the perception that the operators are just trying to screw the little guy, all without offering a shred of evidence other than unsubstantiated rumours. Poor journalism at its worst, simply designed to stir up ill feeling
Grain of TruthRural Press grains writer Gregor Heard on the big issues facing the broadacre farmers today.

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