Policy recommendation will encounter resistance

26 Jun, 2002 10:00 PM
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AGRICULTURE Minister Kim Chance is expected to receive a summary of submissions on the Bulk Handling Act this week.

Nineteen submissions were received.

The only really contentious issue appears to be some resistance to the recommendation in the National Competition Policy (NCP) review to repeal section 9:1(a) of the Act.

Section 9:1(a) states Co-operative Bulk Handling cannot discriminate against or give preference to a person who wants to use the services of the company.

According to the NCP review, it also resulted in the pooling of costs for grain storage and handling.

Pooling the costs of storage and handling results in all growers being charged the same amount per tonne, regardless of actual cost.

The NCP review said pooling the costs masked the costs of providing receival point services to individual growers.

If the section was repealed, some members of the industry were concerned that CBH could move away from a uniform price structure.

With the likelihood of competition in the marketplace, CBH might have to match the prices of rival organisations in the future.

The company is also set to develop strategic receival points throughout the state and could offer concessions to encourage growers to deliver to those points.

CBH does not receive all grains at all points and it was likely there would be an extension to that when the strategic receival points had been developed.

WAFarmers grains president Peter Wahlsten said growers would be protected because they owned and controlled CBH.

"WAFarmers has done a lot of work on the Act and we have a submission before the Minister," Mr Wahlsten said.

"If problems arise from changes to the Act, we will negotiate and develop the fairest system for all growers."

Pastoralists and Graziers Association policy officer Damien Capp said the organisation supported the repeal of the section.

"Any amendments that free CBH up to operate in a more competitive environment have the PGA's support," Mr Capp said.

"We agree with the recommendation because we want CBH to be able to respond commercially ‹ to progress and become more commercial.

"CBH should be able to disaggregate.

"The aeration facilities proposed by CBH on the south coast will almost certainly create higher storage and handling service costs in that region."

CBH was unavailable for comment.

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