GPSA reignites port access debate

Grain Producers SA policy officer Tim Burrow believes the lack of a major exporting competitor to Viterra may push post-farmgate costs for SA producers higher than their interstate counterparts.

Speaking at a joint GPSA and Livestock SA meeting at Karoonda, Mr Burrow said the representative body was "concerned" by the lack of competition in SA.

"SA is now the only mainland state that sells grain that doesn't have at least two exporting terminals," Mr Burrow said. "In WA, we've just seen Bunge open up at Bunbury in competition to the CBH Group, so obviously we'll see some competition, which longer-term, we think will affect post-farmgate costs.

"In Vic we've got Emerald or the Sumitomo Group, which has got a port in Melbourne versus GrainCorp in Geelong, and in Qld we've got Wilmar Gavilon which have a port in Brisbane in competition with GrainCorp. In Newcastle, NSW, there's Glencore and GrainCorp, and in Port Kembla, NSW, in 15 to 18 months' time Qube and Cargill and Emerald are creating an agricultural bulk port there too.

"Since deregulation we've pretty much had monopolies but over time there is competition coming into that space.

"We're not fortunate to see that in SA yet, but obviously there's been talk of that on the Eyre Peninsula with Port Spencer and Port Harding, and there's also talk of something just out of Wallaroo at Tickera.

"However, there's nothing actually happening there, so we're still in essence in a pseudo-monopoly situation."

Mr Burrow said increasing the number of ports in SA was not the only way to improve outcomes for farmers.

"There's so many ports around the coast of Australia," he said. "It's not that we need new ports, it's just that we need open and free access to those ports to make sure we have efficient export opportunity.

"Our argument is that if we can't get competition to come in and compete, then we need a very effective independent watchdog."

Mr Burrow drew attention to an Australian Export Grains Innovation Centre report, which found that SA growers had the second highest post-farmgate costs in Australia, with only Qld more expensive.

The report's authors - who took into account end-point royalties, state research and biosecurity levies, the GRDC levy, port charges, rail freight, storage, up-country receival and shrinkage, plus potential rebates from the bulk handler - calculated SA average post-farmgate costs for wheat at $72 a tonne, with Qld a dollar higher. If potential rebates were not taken into consideration, SA's supply chain costs would be the highest in the nation, while WA farmers enjoyed the lowest costs at $58/t.

* Full report in Stock Journal, June 26, 2014 issue.