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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-07-16 Daily Xml
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GRAIN EXPORTS

The Hon. M. PARNELL (14:41): I seek leave to make a brief explanation before asking the Minister for Mineral Resources Development, representing the Minister for Infrastructure, a question about grain exports.

Leave granted.

The Hon. M. PARNELL: South Australian-based ABB Grain is one of Australia's largest agribusinesses. In South Australia, the ports, storage and transport network that exports 80 per cent of our cereal crops are either owned or controlled by ABB Grain, creating an effective export chain monopoly with a monopoly charging structure in place.

Although significant concerns have been raised over a number of years over this effective monopoly, these concerns have been heightened by the announcement in May this year that ABB Grain will be acquired by Viterra, the largest grain handler in Canada. One of the major impacts of this takeover is the relocation of the company's head office to Regina in Canada.

I recently received a delegation from the South Australian Farmers Federation's grains committee expressing its concern over aspects of this expected deal. In an open letter recently published in the Stock Journal, concerned grain growers supporting the SA Farmers Federation wrote:

We as a group of concerned grain growers are concerned at the prospect of so many strategically critical assets (currently owned by ABB but developed over the years with the support and contribution of local industry and taxpayers), falling under foreign control.

Members should note that taxpayers have funded a large portion of one of these critical assets—the recently-completed Outer Harbor export facility—and, in particular, the essential dredging works to deepen the waters. At the same time as these takeover negotiations, the ACCC, which has responsibilities relating to entities that export bulk wheat and which also provides one or more port terminal services, is currently assessing port access undertakings under part IIIA of the Trade Practices Act 1974.

The Western Australian government has made a submission on the undertakings, but I understand there has been nothing to date from the South Australian government despite the extreme importance of the ABB Grain monopoly to SA grain growers and the SA economy. My questions to the minister are:

1. Is the state government concerned that South Australia could lose one of the state's few remaining major companies with headquarters still in Adelaide?

2. What will be done to protect the essential infrastructure assets which have been paid for by taxpayers and growers through levies and which could end up being controlled by foreign interests?

3. Why has the government not been more vocal in the public debate over the future of a key publicly funded infrastructure investment?

4. Once the headquarters of the new merged agribusiness have shifted from Adelaide to Canada what, if any, influence will the SA government have over prices charged to SA grain growers for the movement and handling of their produce?

5. Will the state government be making a submission to the ACCC on port access undertakings in relation to ABB Grain and, if not, why not?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (14:44): There are obviously a number of issues tied up in those questions, and they are largely the responsibility of either my colleague in another place or, indeed, the commonwealth government. Clearly, one would expect that a takeover of this kind would need to go through the Foreign Investment Review Board. I am not sure what process that is up to or how that will come into play, but one would certainly expect that it may be an issue.

Of course, ABB was formerly the Australian Barley Board and AusBulk; the two merged some years back. From my understanding of the shareholding of ABB, certainly when it was the Barley Board (I was the minister for agriculture at the time), there was a lengthy debate over the single desk because ABB did have a monopoly in relation to the handling of barley, through the single desk—and there was indeed some debate when I was the minister. A report was issued, and the legislation changing that process went through the parliament.

Certainly, at the time, ABB was a grower-owned enterprise, and one would suspect that, with the AusBulk component as well, the growers would have if not majority ownership (it may have been watered down a bit) very significant ownership in this company and would have the capacity to determine the future of that industry.

I should also point out that, while AusBulk certainly is a monopoly, or has a very strong position in relation to the export of grain, following the changes that have been made at federal and state levels by both Labor and Liberal governments in recent years there is more competition in the grain export business than there was some years ago. So, I think many of the monopoly elements that apply to ABB, particularly the single desk elements, have been somewhat broken down in the recent past.

There are a number of related issues. Clearly, one would have thought that, in the first instance, it will be up to the shareholders, who, I suspect, are largely growers; there would certainly be a significant holding to make their determination. One would expect that it would have to then go through the Foreign Investment Review Board, but I will endeavour to have that information investigated. As I have said, I will refer the questions on and bring back what further information I can for the honourable member.

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