Marketing message or monopoly practices?

THE role of industry-wide marketing bodies in the agricultural sector is under scrutiny as the State Government moves to ensure all operations comply with the National Competition Policy (NCP).

Support for these statutory marketing organisations varies depending on the industry, be it grain or potatoes, eggs or livestock.

The Grain Marketing Bill proposed earlier this month aims to deliver a merger of Co-operative Bulk Handling and the Grain Pool of Australia.

The bill proposes the establishment of a licensing authority to regulate the grain industry, although it won’t play a marketing role.

Pastoralists and Graziers Association president Barry Court has welcomed the bill.

“At long last we’re seeing grain marketing freed up,” Mr Court said.

“The Grain Pool will no longer control the sale of grain so we’re in a position to give a licence [export] to anyone who meets the criteria.

“We want to sell but we also want choice.”

Agriculture Minister Kim Chance said that to meet National Competition Policy, the Grain Marketing Bill had separated the roles or regulator and marketer of prescribed grains in WA.

“These bills are important in ensuring the industry keeps pace with the major rationalisation of the grains industry that is occurring both nationally and internationally,” Mr Chance said.

Mr Court acknowledged there were several grain producers in WA big enough to look after their own marketing needs.

In a speech to the Pastoralists and Graziers Association earlier this year, guest speaker Padraic Pearse McGuiness was critical of the role of industry-wide marketing authorities, or “marketing monopolies”, as he called them.

“The very disturbing thing about the monopoly/compulsory acquisition/marketing authority mentality in Australia is that there has grown up a body of professional rural industry bureaucrats, as distinct from producers, who think of themselves as corporate managers,” he said.

“Can genuinely competitive marketing by individual producers possibly be worse?”

WAFarmers director of policy Andy McMillan said the members were fully behind the single desk for marketing wheat and prescribed grains – barley, canola and lupins.

“There are proposed changes to the prescribed grain pool but it still hasn’t been finalised,” he said.

“From a market perspective the main reason [for the single desk] is that Australia’s place in the world grain market is pretty small.

“The single desk provides security of payment and a buyer of last resort.

This means that growers that have had a bad season can still sell their produce.”

Mr McMillan dismissed the idea that industry-wide marketing bodies stifle innovation.

“Individual growers are flat chat just growing … the growers just don’t have the resources to do it [marketing],” he said.

In the potato growing industry the marketing board, Western Potatoes, is fighting hard to ensure its survival.

The fact that WA is the last bastion of industry marketing bodies isn’t a reason to scrap the idea, according to Western Potatoes chief executive officer Chris Perrott.

“We believe we can demonstrate that we deliver a net benefit as the structure currently exists,” Mr Perrott said.

“A lot of people say that we’re one of the last agricultural statutory organisations [in Australia] but I don’t’ think that’s an argument that we shouldn’t be here.

“I think if you weigh it up independently the current system is efficient.”

Western Potatoes is currently in the middle of a review process.

The results of this review will be handed to the Agriculture Department and from there the Government will make a decision on the future of the organisation.

If a decision is made to discard the current system the Federal Government will make dislocation funding available to the State Government.

Western Potatoes argues that deregulation of the industry in other States hasn’t delivered any benefits to consumers.

The effect of deregulation on the big potato growing towns in WA is also a major focus for Western Potatoes.

“In terms of growers there would be about 150 growers in WA and the majority of them are in the Pemberton, Manjimup area, Mr Perrott said.

“That area has been hit by a number of things including dairy deregulation and major changes to forestry. It’s really taken a hammering.

“With deregulation of the industry there’s the potential for Pemberton to become a ghost town.

“What we’ve tried to take into account is the triple bottom line and we don’t believe consumers are being disadvantaged by this system.”

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