A GREEN paper has historically been a discussion paper developed by the public service for community consultation before a final policy paper, a white paper, is issued by the government.
Unfortunately, the green paper policy process is slowly but surely being corrupted by the political process in Australia – as stakeholder input is sought at the start of the process and used to justify predetermined political prejudices.
The latest example of the current green paper process in Australia is the so-called green paper on Agricultural Competitiveness.
An issues paper was released in February 2014 inviting submissions from interested groups. Over 700 submissions were received by April 2014 and it took another six months before the green paper was issued.
If 700 submissions were not enough, further submissions are now invited.
This extended stakeholder engagement process is effectively outsourcing the policy development process historically driven by impartial public service policy advisers. This process of stakeholder engagement would normally be a sensible process if it were based on rigorous analysis.
However, neither the February 2014 issues paper nor the green paper on Agricultural Competitiveness involved rigorous analysis or empirical evidence of the need for policy or legislative change.
The February 2014 issues paper was only 33 pages and contained seven selected charts and tables that provided a thin veneer of analysis of the nine issues discussed in the paper.
The green paper contains more data, with 25 figures and six tables. However, there is zero analysis of the competitive landscape, just one chart on dairy manufacturing costs and one paragraph dealing with the production costs of beef.
Neither example lends any weight towards the stakeholder recommendations contained in the green paper, including forced divestment of assets, an effects test, or options to increase price transparency.
Global, domestic link ignored
Perhaps the most puzzling aspect of the February issues paper and the green paper is the almost complete disregard for the link between global and domestic markets in Australian agriculture.
The brief opening analysis in the February issues paper notes that 60 per cent of Australian agricultural production is exported but that Australia comprises less than 5pc of global agricultural production in our biggest broadacre farming sectors of beef, wheat, cotton and dairy.
Unfortunately, it completely fails to draw the obvious conclusion that Australia does not have scale in international markets, that global markets set the farmgate return for the largest share of agricultural production in the country, and that most of our farmers are, therefore, price takers.
Further, the green paper does not provide a sector-by-sector analysis of the global and domestic competitive landscape in Australian agriculture.
In fact, all this detailed analysis has been done but it has not seen the light of day in either the February issues paper or the green paper.
In 2012, the Department of Agriculture, Fisheries and Forestry produced a report called FOODmap: An analysis of the Australian food supply chain that provides all this analysis.
Why is this analysis not front and centre of the competition policy debate in the green paper on agricultural competitiveness?
Unfortunately, all we can look forward to at this stage is not a white paper but a beige paper that merely plays back stakeholder views based on ill-founded myths about the competitive landscape.
Robert Hadler is a senior adviser at FTI Consulting.