ARL Commission chairman John Grant says NRL grand final likely to go on the road after 2019

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Sydney’s iron grip on the NRL grand final may be prised open after 2019, according to ARL Commission chairman John Grant, with the season showpiece likely to go on the road once every three years once the deal with the NSW government expires.

The move opens up the possibility of a grand final at Brisbane’s Suncorp Stadium, which Grant also said stood to play host to a second team in the region to take on the might of the market-dominating Broncos if the game adds a 17th side in 2018.

In a revealing press conference after announcing new NRL offices in the Queensland capital, Grant said the Sydney monopoly on the traditional grand final could come to an end if rival governments came to the party with offers to host the game.

It is a highly topical issue given the prospect of two Queensland teams in the grand final as the Broncos prepare to host the Roosters and the Cowboys travel to Melbourne, all playing for a spot in next weekend’s finale.

NSW premier Mike Baird recently announced a $1 billion injection into Sydney stadia development, which NRL chief executive Dave Smith said would ensure it remained at the head of the queue for marquee matches.

But Grant was nudging Queensland to put its chips on the table, saying any upgrades to Suncorp Stadium would provide food for thought as the NRL laid out its future grand final plans.

“The NSW government has made commitments around stadia in Sydney and it will be reliant on having headline content,” Grant said.

“Similarly, there are discussions now about upgrading what is still the best special purpose rugby league stadium in Australia (Suncorp Stadium), if not the world.

“We will make sure we are responsive to the governments that are investing. We have to keep our options open but there are commitments being made.

“We use the State of Origin on a three-year cycle to launch rugby league and confirm league’s position elsewhere in the Australian community. We will do the same with grand finals and other big events.”

The Queensland government has been reluctant to add Wi-Fi and new screens to Suncorp Stadium, which many feel could start to be left behind as other cities modernise and expand their venues.

It can technically be expanded from its 52,500-seat capacity but that doesn’t appear to be on the radar. In any case, simply adding seats doesn’t always increase financial gains, with clever pricing structures one way of leveraging competitive returns.

Still, the stadium remains the envy of many. It is set in a prime inner-city position, has a world-class atmosphere, a long history and is surrounded by bars and restaurants that amplify the game-day experience.

“Capacity is one [thing] and what we create in Sydney for the grand final at ANZ Stadium is an event,” Grant said. “What we create at Suncorp is an opportunity to see rugby league played at its highest level.

“It’s about configurations but we’ve got a 52,000 capacity here … that is a very good crowd, you know what it is like in State of Origin. To get that intensity in this stadium with everyone being able to see what is happening on the field, I think that is a big plus.”

Grant also gave the strongest hint yet that the south-east region of Queensland was leading around the home turn in the race for the next NRL expansion slot. A number of bids are running in Brisbane, as well as in the greater west at Ipswich, a noted league heartland.

“I think south-east Queensland,” Grant said. “Queensland has multiple centres of high density and we have to make sure our NRL and Queensland Cup teams are appealing to those communities.”

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Float call for Van Diemen’s Land

VETERAN stockbroker Hugh Robertson of Wilson HTM has called for a public float of one of the nation’s oldest and largest dairy companies.
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Mr Wilson is a minority shareholder in the Van Diemen’s Land Company (VDL) – established in Tasmania under an 1825 Royal Charter granted by King George.

VDL owns 25 dairy farms – including the historic Woolnorth property – which houses the Roaring 40’s wind farm. It also has a heifer rearing operation. It has about 26,000 dairy cows on 19,000 hectares, making it the nation’s single largest milk supplier.

VDL for the past several years has failed to attract a needed capital injection. Several interested parties have looked – including The Chinse Investment Corporation.

Mr Robertson, who invested in VDL 20 years ago, approached VDL recently. “I’ve approached them to do an IPO. I just hope it doesn’t get sold as a block. I hope the New Zealanders consider an IPO through us [WilsonHTM], or someone else,” he said.

VDL’s indirect majority shareholder at 98.4 per cent is the New Plymouth District Council, managed through Taranaki Investment Management. VDL is controlled by parent company Tasman Farms.

“My view has always [been] that it’s a company that needs external capital, and what’s happened historically is the majority shareholding has been whipped around,” Mr Robertson said.

“This is probably a company that should be in the public domain. It’s a gargantuan dairy farm that has lots of potential. The thing to do would [be to] list it and take advantage of capital markets, and get money to develop it properly. It would be a bloody shame if it were sold to the Chinese. It’s an interesting asset and a hidden value that is the brand VDL.”

VDL, however, is a current takeover target by the newly formed shell entity, Tasmanian Land Company: a wholly owned subsidiary of BDO Agricultural Services, set up by Melbourne accounting firm BDO Australia.

TLC has offered $2 a share, a 45 per cent premium to the VDL net tangible assets as at 31 May 2014, of $1.375 per share. The NPDC is taking scrip in TLC, while many smaller shareholders are taking cash. Parties involved said it’s purely about shaking out smaller shareholders and a restructure of the highly complex company, which has been a hurdle in securing an investor.

VDL deputy chair Miles Hampton is recommending the offer, although there has not been any independent valuation. “A number of possible investors have been turned off by the complexity of the company and wanted to have clarity,” he said. “It’s well-known VDL is looking to raise capital to fund an expansion and we are advised that re-arranging the corporate structure this way will increase the chances of raising capital. We are still looking to raise $120 million.”

VDL will still operate under the Royal Charter but its new parent company will be Australian, and Australian corporate law will apply, he added.

Mr Hampton confirmed BDO is not acting for any other bidder and the only shareholders in TLC are those shareholders who take scrip.

Taranaki Investment chief executive Michael Trousselot, who is also on the board of VDL, said the group remains in talks with possible partners.

“We will move [to] 100 per cent [ownership] eventually. We have got CA agreements now, and we are in discussions with them now.” Mr Trousselot declined to talk about takeover speculation or whether VDL would suit the public market, but later said an IPO may be a future consideration.

A source said former VSL chief executive Mike Guerin, who left last March amid disagreement with the board, has been approached by several possible VDL suitors to be CEO if they were successful in a takeover.

According to recent filings, VDL had record milk production of 6.72 million kilograms of milk solids and a bounce back in livestock valuations in 2014. The 2013 year was difficult when the value of livestock plummeted and the group borrowed $1.7 million from Fonterra Australia. VDL parent company Tasman Farms has a $64 million revolving credit facility with Rabobank. Its next review date is November 30.

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Cows v sugar in WA grazing lease talks

CPC chief executive Troy Setter confirmed that discussions were taking place with Shanghai Zhongfu over a 9600-hectare grazing lease on the Ord River.CHINESE real estate giant Shanghai Zhongfu is in discussions with one of Australia’s largest cattle producers Consolidated Pastoral Company (CPC) to take over a major leasehold in the Ord River area, intending to expand cane production.
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All pastoral leases in Western Australia are due to expire in June this year creating a frenzy of new deals and renewals.

In 2012, Shanghai Zhongfu, trading as Kimberley Agricultural Investments, was controversially awarded a prized 50-year development lease in the east Kimberley on the Ord scheme’s second-stage expansion.

The company, which employed former prime minister Bob Hawke as its Australian lobbyist, is developing 15,200 hectares of the Ord West Bank into canefields and wants to build a sugar mill near Kununurra. It needs more land and canefields to make the mill viable.

CPC chief executive Troy Setter confirmed that discussions were taking place with Shanghai Zhongfu over a 9600-hectare grazing lease on the Ord River called Mantinea Plain.

“We have had discussions with various operators about developing northern [Western] Australia including the Ord,” Mr Setter said.

“We have not done a deal yet with [Kimberley Agricultural Investments] but they are our neighbours and we are always in discussions with them.”

The Western Australian government is tendering out the grazing lease of Mantinea Plain for major development. Consolidated Pastoral will be wanting to a deal with the winner of the tender to maintain its cattle herd on that property.

Mr Setter denied that CPC and Shanghai Zhongfu were working on a more substantial deal including the sale of the cattle company’s freehold property Carlton Hill or other parts of the business.

Barclays Capital is advising London-based private equity group Terra Firma on its ownership of the CPC business and certain approaches that have been made to buy it.

Barclays has previously advised on multiple sugar-related business transactions in Australia including Mitr Phol’s Maryborough Sugar Factory purchase. Since confirming that advisers had been appointed, Consolidated Pastoral contracted to buy the much-heralded Bunda Station of the Victoria River District, Northern Territory for about $15 million.

The 178,800-hectare station owned by the Underwood family sits adjacent to CPC’s Kirkimbie Station on the Western Australia border. That sale is yet to settle.

The $700 million Consolidated Pastoral, which in March had about $418 million in equity, controls 19 properties across Australia’s top end, covering more than 5.6 million hectares.

The company’s leasehold properties have slipped in value from $311 million to $295 million, according to accounts filed with the corporate regulator.

Freehold land value was unchanged at $93 million.

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Valuation boost for Linkletters estate

THE value of the 8900-hectare Linkletters estate in Esperance in the Western Australian wheatbelt, the sole remaining rural asset of the ASX-listed Agricultural Land Trust, has been boosted by 37 per cent following an independent valuation.
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The January valuation lifted the book value of the estate by $4.75 million to $17.65 million.

Justin Epstein, director of fund manager One Investment Group, which manages the trust on behalf of its biggest shareholder, the powerful West Australian landholder Allen Caratti, was unavailable for comment – the agricultural trust’s accounts are being audited ahead of the publication of December half-year results.

Last August Mr Epstein told The Australian Financial Review that a rehabilitation of the estate over about 18 months – by removing the blue gum plantations and returning the property to cropping and grazing use – would see its value increase from $12.9 million (its June 2014 book value) to between $28.5 million and $29 million.

The Agricultural Land Trust, once controlled by rural group Elders, was one of the major players in the forestry-managed investment schemes before the dramatic collapse of operators such as Great Southern and Timbercorp saw forestry values plummeting. The trust has a $10 million syndicated loan facility maturing in 2016 to pay for the remediation of Linkletters.

“Our priorities are to remediate Linkletters, lease it out and also to streamline the operations of the trust,” Mr Epstein said six months ago.

“We think Linkletters is an amazing property. No listed agricultural trust has this level of opportunity, but it requires a little bit of vision,” he said.

A sale of Linkletters has not been ruled out either but Mr Caratti, who owns 61 per cent of the trust, would prefer to lease out the property. The January valuation uplift would suggest Linkletters was benefiting from the first stages of this rehabilitation as well as from its prime location in Esperance.

“In cropping, Esperance is considered a premium region,” said one agribusiness valuer.

A February report by valuers Herron Todd White noted increasing confidence in the WA wheatbelt.

“The majority of wheatbelt farmers have now finished their harvest with many achieving above average results and higher than expected yields. This has seen confidence increase and activity in the property market increase with two good years now under their belts,” said Herron Todd White.

Linkletters is named after US television host Art Linkletter, who developed the estate in the 1950s. It was acquired by the Agricultural Land Trust nine years ago and planted with blue gums, before the sector slumped.

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Low activity forecast in ERF auctions

THE government’s direct action scheme is likely to see little interest from new carbon emission reduction projects in its first few rounds of auctions, which could limit the total amount of carbon savings gained in the early stages of the scheme’s operation.
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The Clean Energy Regulator is due to conduct the first auction for projects bidding for money from the ­$2.55 billion Emissions Reduction Fund (ERF) in early 2015, with no firm date yet announced.

The first auction may be conducted without the publication of a ­”benchmark” price, below which bids will need to be priced in order ­to succeed.

Elisa de Wit, partner and head of ­climate change at law firm Norton Rose Fulbright, who has been advising ­clients interested in ­participating in the Fund, said she did not expect much activity from projects that were not already part of the ­pre-existing Carbon Farming Initiative.

“Because there is still a large amount of uncertainty about what that priority is going to be, in the first auction, I think a lot of people are just going to wait and see,” Ms de Wit said.

Many of the approved methodologies that are eligible for money from the ERF depend on so-called aggregation – where a number of small projects are gathered together by an external party in a ­single bid.

The National Farmers’ Federation president Brent Finlay said many of his members were wary of signing up to the aggregation schemes.

“There are lots of costs involved and financial risks for farmers.

“Those risks include the problem of encountering unscrupulous ­aggregators, the snake oil salesmen. “Under the rules of the ERF, farmers must partner with an aggregator.”

Many of the technologies the ­government is hoping the agriculture sector will employ, including so-called “soil carbon” where emissions are sequestered in the ground, are not yet ready for deployment, Mr Finlay said.

“They’re still in an embryonic phase of research and development.

“If the government is serious about ensuring that the ERF will provide opportunities for agriculture, we need ongoing funding for the research and development of cost-effective ­methods,” Mr Finlay said.

A 2014 Climate Change Authority analysis of the Carbon Farming ­Initiative, which is the predecessor of the Emissions Reduction Fund, found the most common methodology was landfill and waste treatment projects, followed by forestry.

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Greens launch ‘factory farm’ offensive

Upper House MP and Greens spokeswoman for animal welfare, Dr Mehreen Faruqi.A PLAN to create an independent Office of Animal Welfare and to put an end to “cruel factory farming practices” is the cornerstone of the Greens animal welfare policy launched on Sunday.
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NSW Upper House MP and Greens spokeswoman for animal welfare, Mehreen Faruqi, unveiled the party’s plans to protect animals, saying the creation of an Office of Animal Welfare is long overdue.

Dr Faruqi told Fairfax Media that it would for the first time ensure that animal welfare in NSW is regulated “without influence” from the government or the agricultural sector.

“Too many animals in NSW are at risk from animal cruelty,” she said.

“Many factory farming practices, such as sow stalls and battery cages, are unnecessarily inhumane. While there have been some industry efforts to phase these out, it is now time to relegate these cruel practices to the history books where they belong.”

RSPCA ‘not up to task’The move also comes after recent criticism of the RSPCA’s ability to prosecute animal cruelty cases.

Animal groups have called on the RSPCA to relinquish its role as prosecutor under the state’s Prevention of Cruelty to Animals Act. The organisation has previously admitted that it is unable to effectively regulate the state’s puppy farms under current funding arrangements.

Fairfax Media has previously reported animal activists group Oscar’s Law had uncovered evidence of alleged animal cruelty at the Frazer puppy farm in northern NSW last year but was outraged that the farm was allowed to keep operating despite evidence of “squalor, malnourishment and freezing conditions”, along with a history of disturbing RSPCA NSW vet reports.

The Greens policy is to establish an independent office take the primary responsibility away from the NSW Department of Primary Industries (DPI), be given a staff of 40 which include animal welfare investigators to work with police to identify and prosecute animal cruelty. It would be costed with the $5 million of current funding from the DPI plus additional; small recurrent funding increase.

They also want activities relating to animals to be licensed including dog breeding, slaughterhouse regulations, farm animals.

And they want to introduce a ban on battery cages for hens, pig stalls and farrowing crates.

Although there have been some voluntary industry initiatives such as Woolworths phasing out battery eggs and Australian Pork Limited committing to a partial sow stall phase-out, the Greens argue that legislation is required to ensure improved welfare for all farmed animals.

Marshall backs regulator planIn January, Nationals MP Adam Marshall lobbied the NSW Minister for Primary Industries, Katrina Hodgkinson, to establish a dedicated task force. The Northern Tablelands MP has had two puppy farms raided in his electorate in the past year.

Mr Marshall suggested that the government could overhaul the current animal welfare system and look at establishing a separate agency to monitor these cases of animal cruelty.

“These cases highlight the need for more rigorous monitoring.” he said. “If there have been breaches of the code of practice, then these people need to have the book thrown at them.”

Animal welfare groups have been calling for the establishment of the office for the past year.

Animal Liberation spokeswoman Emma Hurst said the Office of Animal Welfare needed to be separated from the DPI.

“The Minister for Primary Industries’ main focus is to protect the financial stability of primary industries and welfare often falls in opposition to this,” she said.

“The current minister is pushing for controversial ag-gag laws, which will prevent issues of animal welfare reaching the public,” Ms Hurst said. “Instead of trying to cover up welfare issues, the focus of any minister with the portfolio of animal welfare should be to rectify them.”

Ms Hurst called on the minister for police to take on the responsibility for the role. “That is the only way it would work,” she said.

Ms Hodgkinson would not comment whether the NSW government would consider establishing an Animal Welfare Office.

She reiterated the NSW government’s commitment to animal welfare through the Companion Animals Taskforce and said that the animal welfare system, “will soon be bolstered even further through the introduction of the NSW Biosecurity Bill”.

According to the legislative framework, the yet-to-be-introduced NSW Biosecurity Bill is designed to “protect the economy, human health and the environment from problems associated with pests and diseases of animals”.

The state’s chief regulator of animal welfare, RSPCA NSW, has declined to comment.

– with Eryk Bagshaw

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Beef industry reform ‘overdue’

LABOR Senator Glenn Sterle has repeated demands for Agriculture Minister Barnaby Joyce to act on structural reforms to benefit the beef cattle industry, as recommended in a far-reaching Senate inquiry.
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Mr Joyce launched the inquiry into the $5 per head levy shortly after he came into office after the 2013 federal election.

A subsequent inquiry chaired by Senator Sterle saw the Senate Rural and Regional Affairs and Transport References Committee hand down its report last September.

Its leading recommendation was to establish a producer-owned body with “the authority to receive and disperse the research and development, as well as marketing component, of the cattle transaction levy funds”.

Work has since gone on behind the scenes between Mr Joyce and industry to progress the major reforms – but the Western Australian Senator says time is running short for the government.

He has reiterated calls made to Fairfax Agricultural Media last November calling on Mr Joyce to adopt the bipartisan report’s recommendations into the system of levies placed on Australia’s beef industry.

“Mr Joyce needs to listen to the views of the industry and overwhelmingly that is in support of the recommendations of this Senate inquiry report,” he said.

Senator Sterle said the inquiry uncovered a levy system that was “ineffective and poorly managed”.

He said growers viewed the levy system as benefiting only small segments of the industry, despite levies being paid by all cattle growers.

“Cattle growers need to feel that the levy system benefits the entire industry and I believe that the recommendations of the inquiry report will go a long way to ensuring that the system is fair and equitable,” the long-term Committee member said.

“Barnaby Joyce likes to think of himself as representing rural Australia, but his continued refusal to respond to this report – a report that was back by his Coalition colleagues – leaves cattle growers in limbo.

“Only by swiftly taking up the recommendations of the report will Mr Joyce ensure that cattle growers will once again have faith in the levy system.”

Mr Joyce has also come under renewed pressure to introduce the reforms from beef industry think tank, the Australian Meat Producers Group (AMPG).

The group launched a social media campaign last week, aimed at maintaining momentum for a proposed Grassfed Cattle Corporation to replace the Cattle Council of Australia (CCA).

A new website is asking cattle producers to vote for action, to gain control of their levy and industry.

“For the last decade the cattle producers of Australia have received ruinous prices, paid record costs and controlled nothing,” the website says.

“The Senate Committee has recommended that the grassfed cattle producers should control their own industry and their own levies.

“Will you please give us your support to control our own levies and take control our own industry as the Senate Report recommends.”

In a statement, AMPG co-founder Cameron MacIntyre said Mr Joyce was to be congratulated for his leadership in establishing the Senate Inquiry.

However, he said, “cattle producers do need to publicly support these much-needed reforms recommended by the Senate Committee”.

“In 2013-14, grassfed cattle producers made up $61.5 million of Meat and Livestock Australia’s (MLA) $117.5m levy income,” he said.

“But despite contributing more than half of the income, grassfed producers received very little of MLA’s output.

“At the same time, Australian producers are going slowly broke, last year receiving less than $2 a kilo for liveweight steers, almost half the returns to US producers for similar stock. Producers are exiting daily – and urgent action is required to restore our sustainability.

“Cattle producers desperately need a well-resourced, accountable body with a sharp focus on improving profit in the industry.

“In short, we need to follow through on the Senate Committee recommendations for a Grassfed Cattle Corporation directing its energies towards strategies that restore the future of grassfed beef production in Australia.

“Producers are not trying to destroy MLA by removing funding,” it says.

“Producers merely wish to assume control over their levy funds, the same as other industry bodies do, and manage how MLA uses it.”

A spokesperson for Mr Joyce said the government was still considering the inquiry’s recommendations, within the broader context of the red meat sector and would deliver a response in due course after proper consultation with industry and affected stakeholders.

“It is clear that there are varying views within industry as to how the inquiry’s seven recommendations should be responded to,” the spokesperson said.

“On December 19, 2014, Mr Joyce held a meeting with relevant industry bodies and organisations to discuss issues relating to the inquiry’s seven recommendations in order to better inform the government’s response.

“This meeting complements ongoing engagement with affected stakeholders since the Senate report was released in September last year.”

The CCA has been contacted for comment.

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Madigan’s MDB warning

Senator John Madigan on last week’s listening tour.Jobs at riskVICTORIAN Independent Senator John Madigan has been warned hundreds of jobs and vital income for regional towns are in grave danger, if the Murray-Darling Basin (MDB) Plan strips water from agricultural production for environmental purposes.
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Senator Madigan toured various MDB communities last week asking leading stakeholders to give him their unambiguous thoughts on the Basin Plan.

The former blacksmith is one of eight crossbenchers in the federal Senate who holds a critical position in determining the final fate of government legislation.

He’s seeking crossbench support to help establish a new federal Senate inquiry to examine whether the Basin Plan’s basic aim to deliver 2750 gigalitres in environmental water flows will cause irreversible damage to agricultural production and river communities.

Senator Madigan will synthesise the key messages from various meetings in NSW and Victoria and take them to Canberra to present to other politicians.

At a community meeting in Deniliquin on Wednesday, Senator Madigan explained to about 30 community stakeholders why he abstained from voting for the Basin Plan when it was signed into law in late 2012.

He said he asked his fellow Senators – including those from the Coalition and the ALP – what they were voting for and nobody could provide him with a coherent response.

“So I refused to vote,” he said.

“I’m not into political expediency – I don’t like it when people suffer. I’m here to listen and I’ll do my very best to try and get you a result.”

Senator Madigan said he had strong personal interest in water as the lifeblood of agricultural production and a family connection to the Deniliquin community.

Facts, not rhetoricWednesday’s meeting saw eight speakers from various community interest groups offer their key messages for Senator Madigan to prosecute in the nation’s capital this year.

However, the public forum’s tone contrasted sharply to a visit the previous day by new Secretary to the Environment Minister Bob Baldwin and Murray-Darling Basin Authority (MDBA) chair Neil Andrew.

Mr Baldwin and Mr Andrew toured various irrigation sites and facilities in the region, gathering views and advice from stakeholders during a crash course on water policy session.

However, simmering tensions hit the surface at the following day’s meeting community leaders expressed a growing lack of confidence in the Basin Plan to the Senator.

They also ventilated frustrations about the recent change of water leadership which has effectively seen four federal water ministers appointed in the past two years.

Backlash towards Mr Baldwin focused on a local media report which claimed he toured Basin communities to listen to their concerns and wanted to be persuaded by facts rather than rhetoric, about the Basin Plan’s failings.

But the article also reported him as saying the Basin Plan wouldn’t be changed and instead would be delivered in full and on time, despite those concerns.

A bit of a contradictionSouthern Riverina Irrigators (SRI) chair John Bradford said he believed Mr Baldwin was “very much a straight shooter” who came out to listen to the community’s concerns, but at the same time the new water boss said he would be forging ahead with the Basin Plan.

Mr Bradford said Mr Baldwin’s comments came a day after embattled Prime Minister Tony Abbott’s speech at the National Press Club in Canberra, where he promised all government members would listen more closely and consult better with their constituents in 2015.

He said Mr Baldwin’s comments to the Deniliquin community were “a bit of a contradiction” to Mr Abbott’s key message.

Local business representative Harold Clapham was also critical of Mr Baldwin’s comments, saying they were “insulting and demeaning” and his reference to a rain dance was “unintelligent and certainly not funny”.

“We know what happens in this district when we don’t have water, far better than you, Mr Baldwin,” he said referring to the rice mill’s closure at Coleambally this year.

Wakool on the marginsWakool Shire Council chair Neil Gorey told Senator Madigan an economic impact report on the Basin Plan’s proposals had highlighted potential community fall out from water entitlement reductions and retiring significant areas of irrigation land.

Mr Gorey said the report highlighted that from 2002 to 2014, water entitlements in the Wakool Shire had halved from 304,000ML to 152,000ML.

He said, during that time, the Shire’s population had also declined by 814 people, or 17 per cent, of which a vast majority came from the rural sector.

Mr Gorey said the community’s towns have “stayed relatively static” despite losing 294 jobs (a 24pc decrease), with ag sector jobs falling by 328 or 40pc of the agriculture work-force.

“Our fear is that, if water entitlement reductions continue that are to meet the water recovery target of 1048GL in NSW, Wakool Shire could experience a further 38pc reduction in water entitlements,” he said.

“If this occurs, we can expect another 223 job losses resulting in an annual loss of wages of $11.2 million and reduced consumer spending in the Wakool Shire of $6.7m per year.”

Mr Gorey’s message was for Senator Madigan to convey to the minister, crossbenchers and Mr Andrew was that his Shire recognised the need to transition to a new future.

But he asked that future water entitlement reductions be postponed five years, to allow assessment of the Basin Plan’s impacts on the regional community and to build resilience from future reductions, to meet targets.

He also requested the federal government provide funding and policy support for the structural adjustment package needed to transition the Shire’s economy to “a future with less water”.

Plan ‘skewed to environment’SRI’s Mr Bradford said the Basin Plan had failed to deliver on its key goal of a triple bottom line result, as it contained an imbalance towards environmental water delivery, at the expense of social and economic outcomes.

He said 25pc of the district’s water entitlement had already been removed, with irrigators already feeling “distressed” and confidence levels low, in terms of future outlook.

“If we don’t get this right, what legacy do we leave for the future?” he said of the Basin Plan.

Mr Bradford said existing environmental water needed to be used better and any water taken from productive use must be accompanied by benchmarking to ensure any adverse third party impacts are identified.

“Water buybacks are a bad deal – full stop – so we need your help to legislate the 1500GL cap on buybacks through the Senate,” he told Senator Madigan.

Irrigation infrastructure iconicMurray Irrigation Limited chair Bruce Simpson said his organisation’s infrastructure was iconic and of “national significance”, not just for its 1200 shareholders and the local community “but to this nation”.

“We must protect it and its productive capacity,” he said.

Mr Simpson said politicians had promised to deliver the Basin Plan on time and on budget but time and money were both running short and “we need to get good politics into this”.

He urged Senator Madigan to use his crossbench influence to ensure “common sense” was applied to the issue.

“We carry all the risk of bad politics so we encourage you at cross bench level to support the 1500GL cap legislation,” he said.

“God help us when the next drought comes along and we have no fat in the system.”

Mr Simpson also said the Commonwealth Environmental Water Holder needed to be more flexibility with application of environmental water trading rules.

He said irrigators get “rapped over the knuckles” if they don’t use water efficiently and operate under enormous regulation and responsibility – but environmental water use wasn’t held to the same standards.

“We’d ask from your point of view, to apply pressure to ensure (Environment) Minister (Greg) Hunt genuinely understands that if environmental water use is not brought to account, it is poor use of public funds,” he said to Senator Madigan.

Irrigators need a championMr Simpson implored Senator Madigan to be a conduit for Basin communities and carry their messages to Canberra.

“Those people perceive we are greedy (and) we are singularly focused on building our balance sheets at the expense of every other bloody thing, including the environment,” he said.

“But we are quite the contrary, and that’s what really hurts me – and it hurts everybody else in this room.

“We need a champion – and if you can be the champion John, and provide facts through to your colleagues on the crossbench, we will do everything we can to help you.”

SunRice chair Laurie Arthur said the local rice mill had been forced to close as a result of the millennium drought, but was back in business now.

Mr Arthur said the local rice industry used water more efficiently than any other in the world and also spread its economic benefits throughout the community.

He said his key message for Canberra was about the ongoing “distortion” caused to water markets by the Basin Plan and urged a period of stability for agriculture to “essentially sort itself out”, given there was now 25pc less water available.

Basin Plan ‘flawed from day one’Riverina and Murray Regional Organisation of Councils executive officer Ray Stubbs said the Water Act which underpinned the Basin Plan’s creation was flawed.

Mr Stubbs said it favoured environmental considerations over social and economic outcomes that were “easily overlooked” by the MDBA.

But he said the MDBA can’t be blamed for acting according to what was prescribed in the Act.

“The Act needs to be stronger; we need to get triple bottom line considerations into the Act,” he said in urging the government to reconsider findings of an expert review of the legislation.

Mr Stubbs said the MDBA’s current consultation mechanisms with communities were working OK, “but can be better”.

Murray Valley Private Diverters chair John Lolicato said Mr Baldwin’s comments were an example of “how far out of touch our politicians are”.

“We should not be putting up with that kind of rubbish,” he said.

He said the Water Act wasn’t about producing the best environmental outcomes but was all about, “how can we squeeze all this bloody water down the other end so we can put 2000GL straight out to sea, and we can keep the salt levels of an estuary system way above what it should be”.

“We’ve had three successive governments now who are prepared to actually live the lies of the Basin Plan and it’s all about providing water for the bottom end,” he said.

“The uncertainty and the mistrust that is going on at the moment, is just unbelievable.

“So 50pc of our entitlement has already gone and as we all know water is the basis of production.

“How much money I make a year is directly related to how much water I’ve got in my kitty, so every drop that we will lose is going to have an impact.

“The Water Act is flawed and it’s been flawed from day one and it has been driven by people who don’t understand what they’re doing and that’s why we’ve ended up where we are.”

Third party impactsSpeakers also raised fears about the Basin Plan’s Constraints Management Strategy causing negative third party impacts, to achieve additional environmental water flows.

Mr Clapham said the Basin Plan was the largest irrigated agricultural industry restructuring ever under taken by a developed economy.

He said was on the basis that it takes commercial water out of production and allocates that water to a non-productive sector of the economy.

“This is not to belittle the need for environmental stewardship; it is simply to highlight the need for accountability and ultimately the consequences,” he said.

“And as far as I can see, there has never been an attempt on this scale, to utilize the existing infrastructure and the imperial data surrounding modern water flows that were developed for commercial purposes, in an attempt to produce an environmental outcome that never existed prior to the industrial development of the existing infrastructure.

“In simplistic terms, the MDB environment was irrevocably altered forever the moment the river flows were changed and the first weir was built and it has been changing ever since.

“It is arrogance beyond belief to think that we now have a comprehensive understanding of an environment that in reality is less than 100 years old.

“In its simplest form, access to temporary water from the Commonwealth Water Holder, would provide the economic arbitrage necessary to lessen the economic and social consequences associated with the implementation of plan.

“It would also provide a much needed circuit breaker for all parties to meet the obligations to their constituents.”

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Port code motion delayed

A MOVE to remove the co-ops exemption in the port access code has been stymied, with a key Senator not convinced by evidence presented an an inquiry.
Nanjing Night Net

The vote on a disallowance motion to remove a special exemption for co-operatives within the federal government’s wheat port access code of conduct has been delayed to March 4.

Western Australian Greens Senator Rachel Siewert told Fairfax Agricultural Media that evidence presented at a federal Senate Committee inquiry hearing into grains logistics in Canberra last Thursday had failed to change her mind on supporting the exemption.

The Rural and Regional Affairs and Transport References Committee inquiry quizzed key grain industry figures about the merits of the exemption.

Witnesses included leaders of WA’s two main farm lobby groups, the Australian Competition and Consumer Commission (ACCC), WA grains co-op CBH and rival port operator Bunge Australia.

NSW Liberal Democratic Party Senator David Leyonhjelm introduced a disallowance motion late last year proposing to remove the co-ops exemption.

The motion was scheduled to be voted on this week when federal parliament resumed, but Senator Siewert said she heard no evidence at the inquiry hearing to “dissuade” her from voting against it.

She said too much work had already gone into developing the code regulations via a grains industry taskforce which was established via amendments the Greens achieved when voting with Labor to pass legislation in late 2012, which removed Wheat Exports Australia.

Senator Siewert said she would be concerned about supporting Senator Leyonhjelm’s disallowance motion if it repealed the entire code – but would still need to clarify whether the proposal only targeted the co-op exemption.

The code is one of the final vestiges of the legislation which empowered the former single desk arrangements for bulk wheat exports, operated by AWB.

But moves to fully deregulate the wheat export industry continue to frustrate the Coalition and divide grains industry stakeholders, especially between east and west coast views.

Senator Leyonhjelm and Shadow Agriculture Minister Joel Fitzgibbon have both criticised Agriculture Minister Barnaby Joyce for approving the co-op exemption.

But Nationals deputy leader Mr Joyce has justified his decision, saying any monopolistic behaviour by co-ops operating in their own market, such as CBH, yields benefits for growers via their inherent business structure.

Senator Leyonhjelm said he would now be postponing a vote on the disallowance motion, which had seven sitting days of parliament remaining as of Tuesday.

He said he would use that additional time to try and gain support from Labor and Mr Fitzgibbon and any “liberal Liberals” who support his views on full deregulation.

Senator Leyonhjelm conceded his disallowance would be defeated, “if the Libs all stick together”, given the Green’s continued supported for the regulations signed-off by the Coalition on October 1, last year.

“There are quite a few Liberals who would support my approach to deregulation,” he said amid speculation some Liberal Senators may abstain from any future vote on the disallowance motion.

“My feeling is that if regulation of port access was required anywhere, it should be in WA.

“I don’t think CBH should be favoured with an exemption but it looks like the Greens are not going to go with that.”

The Senate Rural and Regional Affairs and Transport References Committee’s inquiry was established in mid-2014 with an original reporting deadline of December, which was extended out to June 4 this year.

The inquiry was re-adopted for pursuit by the current parliament in late 2013, following a similar long-running investigation by the Committee into grain handling ownership arrangements.

That inquiry played a key role in raising issues of concern to growers around reduced competition and ownership of ports, during the proposed $3.4 billion takeover of GrainCorp by US multinational Archer Daniels Midland which was rejected by Treasurer Joe Hockey in late 2013.

The broad terms of reference underpinning the Committee inquiry’s latest iteration includes looking at on-farm and off-farm grain storage networks and how the movement of grain to ports impacts farmgate returns.

Reactions to co-op exemptionAt last week’s Senate inquiry hearing, WA Pastoralists and Graziers Association grains committee chair John Snooke said exempting co-ops from “certain aspects of the code” would essentially give CBH, “a licence to do as they wish”.

“It is rewarding CBH for being a co-operative rather than a corporate because the Minister favours co-operatives,” he said.

Mr Snooke said CBH’s past “bad behaviour” in the WA logistics supply chain – which the ACCC had identified and sought to rectify – “will continue”.

“If you give CBH a little bit of slack, it will take it,” he said.

“That is our concern. We have put CBH up on a pedestal. It is not back in the pack with the other bulk handlers where it should be.”

Mr Snooke said if there was no code, the ACCC would only have powers to address any issues – of market power abuse – retrospectively.

He said the PGA also believed the grains industry had taken “a slight step back from the full path to deregulation” due to the code, which should have retained a sunset clause, instead of a three-year review.

“We have given a privileged exemption to an organisation that has some track record of anticompetitive behaviour,” he said.

ACCC chair Rod Sims said an exemption for CBH was “very much a policy issue” which required policymakers having to consider the merits of “co-operation versus competition”.

“The vast majority of farmers in the west are members of CBH, so the issue of policy is whether you think those farmers in the west will be better looked after by the co-operative that they are members of or whether you think that the farmers would get a better price for their wheat if there is competition to buy their wheat,” he said.

“That is the policy trade-off: do you leave it to a co-operative to look after the farmers or do you rely on competition to buy the wheat?”

Mr Sims said the WA market had about 20 players currently trying to buy wheat from farmers and at least 10 of them are “major players”.

“It is an active market for that wheat,” he said.

“CBH, the last time I looked, exports less than 50 per cent of the wheat, so the other 50 per cent is being exported by other players. You have a lot of competition there.

“I guess the question is about whether that competition is a good thing for farmers or whether it is better to rely on CBH to look after its members in an optimum way.”

Mr Sims conceded CBH has had several matters before the ACCC quoting an example of the co-op, “acting in a way that sought to reduce competition for rail transport”.

He said he also believed in sunset clauses for regulatory arrangements and regular reviews.

“That (review) might allow you to say that there are enough extra ports being built to provide the competition,” he said.

“In general terms, we support sunset clauses.

“But, for there to be a change in circumstances and to get rid of the code, you would need a lot to happen in the wheat market.”

Bunge Agribusiness Australia general manager Chris Aucote was steadfast in repeating his personal philosophy that, “less regulation is better in the long run”.

“I believe fundamentally that that is the way the industry should go,” he said.

“Certainly other companies will have different views on that but I strongly believe that the market will work it out.

“Competition will help solve some of these issues in the long run.”

Asked by Senator Leyonhjelm how he’d feel if the port access code applied at the Bunbury where Bunge has established its own export facility, and not to CBH, Mr Aucote said, “That is something we would have to work through”.

“We have had discussions with the ACCC around what the requirements are,” he said.

“Our port in Bunbury is a boutique operation to some degree.

“The intent of the regulations is to allow for innovation and competition in the market.

“I would hope that that is what the regulations would support.”

WAFarmers grains section president Kim Simpson told the Committee that the State regulations, which govern CBH’s operations – the Western Australian Bulk Handling Act – ensured competition in marketing grain.

He said CBH had a grain handling monopoly, “simply because we built them and they do the job so well that no-one else is likely to come in in any big way and make any money out of it, unless they cherry pick parts of it”.

“In marketing, that State legislation ensures that CBH sells anybody’s grain, and takes anybody’s grain as long as it is up to standard,” he said.

“Since deregulation slightly more than 50 per cent of the State grain crop which has been handled by CBH has belonged to other traders.

“There will always be a disaffected voice here and there but by and large my understanding is that those traders find the system works very well.”

Mr Simpson said he believed concerns about CBH’s market behaviour weren’t driven by port access agreements but by the “philosophical backgrounds” of growers and whether they believe in the difference between corporates and co-operatives.

“As I have said, they have wanted to corporatise CBH from day one, I think largely because they think they can make a dollar out of it,” he said of corporate leaning growers.

“Perhaps some of them do not have kids who are going farming so they figure they can make a dollar on their exit.”

But Mr Simpson said more than 90 per cent of growers supported the co-op structure.

“The surveys done not so long ago amongst the younger growers indicate that they, and all growers, are realising, as the gap opens up between the costs of our handling system and the costs of equivalent handling systems in the country, how valuable CBH is to them,” he said.

In his opening statement to the hearing, CBH CEO Dr Andy Crane urged the Committee to remain “really cognisant of just why the co-operative exemption was included in the first place”, when considering the disallowance motion.

Dr Crane said some of the reasoning “gets forgotten in the cut and thrust of some of these grain industry deliberations as various companies and agri-political groups push their particular objectives”.

He said the co-operative and mutual business model is “fundamentally different” to a corporate model.

“Unlike Australian publicly listed companies, those assorted foreign owned and controlled multinationals and even privately owned traders, CBH as a cooperative exists solely to create and return value to growers,” he said.

“We only have one beneficiary. We are not trying to make money out of one group to provide value to external shareholders.

“We do not exist to make that profit and return dividends to those faraway shareholders.”

Dr Crane said it was “enshrined” in the CBH constitution that the co-op exists to promote the development of the WA grain industry and its purpose is to create value and return it to the State’s 4200 grain growers.

He said removing the exemption would force extra costs on growers with about $1 million annually already being forced on CBH to comply with regulations.

“Removal of the exemption will leave unnecessary regulation in place in attempts to protect growers somehow from the actions of their own supply chain,” he said.

“Our growers demand full and open access to the network so they can sell the grain to as many marketers as possible.

“We have no incentive – the board gives us no incentive – to hinder access, so the removal of the exemption will create just another layer of regulatory burden.

“Retention of the exemption recognises the inherent difference of cooperatives and that a guarantee of access is already assured.

“The Western Australian Bulk Handling Act applies solely to CBH and requires the cooperative to receive and outturn all grain tendered to the system.

“The DNA of our cooperative demands this – as does competition law.”

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Big year for sorghum harvest: ABARES

RECENT good rain in Queensland and NSW is expected to boost the upcoming grain sorghum harvest by about 66 per cent compared with last year to 1.8 million tonnes.
Nanjing Night Net

In its latest Australian crop report the national commodity forecaster, Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), says good rains in December and January in parts of the summer cropping belt in Qld and northern NSW had boosted sorghum plantings by 23pc to 604,000 hectares.

The bulk of the increase has been in Qld which was now tipped to produce 1.2 million tonnes from plantings of 422,000ha.

ABARES modelling indicates some potentially top sorghum crops around Emerald, Biloela, Roma, Kingaroy, west of Dalby, Goondiwindi, Inverell and Gunnedah with good finishing rains.

The latest seasonal outlook for February to April from the Bureau of Meteorology has indicated a slightly higher chance of drier than normal conditions across the summer cropping regions of northern NSW and Qld.

NSW was forecast to harvest 585,000 tonnes of grain sorghum from 180,000ha.

The news for cotton isn’t so bright with plantings forecast at about 210,000ha compared with 392,000ha last year on the back of the reduced availability of irrigation water and soil moisture.

As a result ABARES predicted a 47pc fall in cotton production to 470,000 tonnes of lint and 665,000 tonnes of cottonseed.

Average yield was forecast to fall by one per cent to 2.2 tonnes a ha, down from the high average yield of 2.3 tonnes the previous season.

Rice plantings were forecast to fall by 7pc in 2014-15 to around 71,000ha on the back of water shortages in southern NSW with production forecast at 684,000 tonnes.

ABARES said Australia’s just-harvested winter grain crops produced 38.2 million tonnes, a fall of 13pc. National wheat production fell 12pc to 23.6 million tonnes while barley output dipped 18pc to 8 million tonnes and canola dropped 10pc to 3.4 million tonnes.

Tough seasonal conditions in Queensland, NSW and Victoria cut total winter grain production below the 10-year average.

Production fell to a lesser extent in South Australia (down 12pc to 7.6 million tonnes) and Western Australia (down 16pc to 14.6 million tonnes).

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