A POLITICAL manoeuvre to remove the co-operative exemption granted in the government’s wheat port access code of conduct has been defeated.
A vote on NSW Liberal Democratic Party Senator David Leyonhjelm's disallowance motion was held on Wednesday in the Senate and was defeated after it was opposed by the Greens, Coalition and Labor.
During debate, Labor Senator Doug Cameron said the ALP would not support the disallowance motion but instead would give the government’s regulatory proposal an opportunity to work.
“But we do issue an appeal – the government has removed the five-year sunset clause for the code – it has been replaced by a review in three years’ time,” he said.
“We urge the minister to provide certainty by reinstating the sunset clause.
“Labor believes that within five years, sufficient competition will exist in all port zones to allow the removal of all regulation, beyond the general provisions of the Competition and Consumer Act.
“Labor believes the government has erred in providing the (Agriculture) Minister the power to exempt certain market participants, but will not stand in the way of its right to be proven wrong, to have done so.”
Western Australian Liberal Senator Michaelia Cash said the Code helped to limit red tape on the nation’s $6.8 billion wheat export industry by allowing certain port operators to be exempt - made on a port-by-port basis by the Minister.
Senator Cash said co-ops followed significantly different business models that work to benefit members who are growers, rather than shareholders.
In recognition of this, she said subclause 5.1 in the Code provides for grower owned co-ops to have their “regulatory burden and associated costs reduced and therefore maximise returns to growers”.
“The exemption only applies to co-ops with sound governance arrangements and whose members account for more than two thirds of all growers in the relevant grain catchment area,” she said.
Senator Cash the Minister needed to be satisfied that certain conditions were being met before granting an exemption.
She said the Agriculture Minister had already made a determination on November 17 last year – about one month after the Code was introduced - to exempt all four of CBH’s ports in WA.
Senator Cash said the Code also carried a sub-clause which empowered the Minister to revoke exemptions if circumstances changed or no longer applied, for the co-op.
She said it also permitted individual grain growers or groups of growers to write to the Minister and raise concerns about any impacts of exemptions.
But since CBH’s four port exemptions were granted last November, no grain producers have raised concerns with the Minister, she said.
WA Greens Senator Rachel Siewert said after carefully considering evidence, including that presented at the recent federal Senate inquiry into grain logistics, the Greens had decided not to support the disallowance motion.
Senator Siewert said a “momentous” amount of work went into developing the Code regulations through a grains industry taskforce the Greens ensured was established in 2012.
She said that taskforce was established through amendments the Greens achieved to pass the legislation, which removed Wheat Exports Australia as part of a gradual process to deregulate the wheat export market.
CBH has estimated its exemption from the Code would generate a saving of about $1 million per year in compliance costs.
Senator Siewert said even with an exemption from the Code, CBH would still be scrutinised under WA legislation.
“In this case, it makes no sense to put additional impost on CBH when the State legislation already ensures that they have to treat all exporters equally,” she said.
Senator Siewert said the Senate inquiry had also provided evidence showing there was competition in the WA grains market, with 50 per cent of the crop being bought and exported by organisations other than CBH.
“We believe supporting this disallowance would punish WA farmers,” she said.
Senator Siewert said a key issue around the complex deregulation process of recent years had been the vast differences in the grains sector between WA and the east coast.
She said most of the WA wheat crop is exported, but in contrast, most of the eastern states crop is sold into the domestic market.
“Colleagues from both major parties, within their own parties, have different views on deregulation,” she said.
“Wheat growers across the country have been divided on this issue as well.”
The disallowance motion was seconded by SA Family First Senator Bob Day who said he didn’t believe there was any reason “to treat two corporate entities differently under the law”.
Senator Leyonhjelm said passage of the disallowance motion would have made CBH subject to the same conditions as GrainCorp, “no more; no less”.
“This would ensure fairness, in that the same rules would apply to all who seek access to ports for the export of their grain,” he said in the debate.
“The government might mouth words about free market capitalism, but in agriculture the lure of agrarian socialism is never far from the surface.”
Senator Leyonhjelm said his disallowance motion did not relate to the entire regulation.
He said it only sought to remove the part that implies CBH, as a grower co-operative, is “somehow more virtuous in its dealings with grain growers than, say, a company limited by shares and should therefore be given special consideration”.
“Those who claim to welcome competition when the exporter is a profit-oriented business, especially if it’s a foreign multi-national, recoil in horror when it is suggested the same competition rules should apply to a farmer owned co-operative,” he said.
“This is despite the fact that the grower cooperative is just as committed to making money.
“The Agriculture Minister is an agrarian socialist, ready to use rules, regulations and special exemptions to protect his constituency.
“In Mr Joyce’s eyes, all grain exporters are equal, but some are more equal than others.”