Australia. Abolish rice export single desk, Productivity Commission study recommends

25.07.2016

AUSTRALIA’S rice export marketing monopoly system should be scrapped, according to a new Productivity Commission study into agricultural regulation.

This is one of 24 recommendations included in the Commission’s agriculture regulation draft report released on Thursday, which also called for more international evidence to be used more on agricultural chemicals assessment.

Domestic rice marketing in NSW was deregulated in 2006, but under the Rice Marketing Act 1983, all rice produced in the state is still vested in the Rice Marketing Board, which in turn issues an exclusive export licence to SunRice.

The report said the single-desk export selling arrangements for the NSW rice industry should be deregulated.

The Productivity Commission claims none of the arguments to maintain this monopoly arrangement stacks up, including the assertion maintaining a single desk creates price premiums for growers.

“Price premiums are not necessarily evidence that single-desk marketing is working — price premiums can also be a result of normal commercial innovation,” the report said.

The Commission said there was a “weakness” in trying to prove the evidence of such premiums and in addition “efficiency costs of single-desk arrangements plus any additional costs incurred by single-desk authorities in obtaining those premiums also need to be taken into account”.

The rice export monopoly is one of only two statutory marketing arrangements left in Australia, the other is the regulation of Western Australia’s potato industry, which is due to be abolished by the State Government.

Rice Growers Association president Jeremy Morton said the Commission’s assessment of the single desk price premiums may not be reliable as they would not get essential commercial-in-confidence material from SunRice.

He said the Association would more keenly watch the recommendations of the current NSW Government’s review into rice vesting, which had access to more information.

“This report is a draft and there’s probably more information that the Productivity Commission could get access to that might see them make a different finding,” Mr Morton said.

“Instead of repealing (the legislation) there is an opportunity to review it further.”

Another report recommendation to cut red tape includes a proposal the Australian Pesticides and Veterinary Medicines Authority should “increase its use of international assessments and decisions for products already registered by trusted comparable regulators overseas”.

This has been broadly welcomed by the grains industry including Grain Growers Limited.

GGL technical general manager Michael Southan said this would assist the industry “avoid unnecessary duplication in agricultural chemical assessments”.

“Ultimately, this would reduce the time and cost involved in granting registrations, which is critical to competitiveness in a small market, such as Australia,” Dr Southan said.

The Productivity Commission is seeking submissions on the draft report and public hearings will be held in August.

 


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