Bell's attempts to dismantle vesting threaten rice industry's future

5 Dec 2012 11:46 AM - Media Release

The RGA says continued attempts by SunRice’s second largest shareholder, rice grower Colin Bell to dismantle vesting threaten the viability of the Riverina rice industry and the regional families and communities that rely upon it.

RGA President Les Gordon described Bell’s claims in the financial press this morning that deregulating the export market would open up competition and deliver higher prices for Australian growers as “nonsense”.

“Everyone in our industry knows that prices are not set by competition in the Riverina – they are set by competition overseas. If we end up with two mills operating in our region as Mr Bell proposes, both trying to access the same overseas markets, the only thing that those markets can differentiate us on is price. That means lower returns and it’s the grower that will ultimately lose out,” he said.

“While we generally support free trade, the fact remains that it doesn’t exist in the global rice market. The majority of our export markets are highly regulated and if we don’t have strong regulation in Australia via a single desk, we lose our negotiating power. We won’t stand a chance with the buyers,” he continued.

“The vesting of the Australian rice industry also underpins SunRice’s buyer of last resort obligation. As the industry’s peak body we cannot stress enough to Mr Bell and the NSW Government the importance of the surety that SunRice will take every last tonne of production for the 1500 farming families that make up the industry. Under the current arrangements we get the same price for the first tonne as we do for the last.

“While that means there is a small penalty price per tonne, the gross return far outweighs that. If we lose this surety, the Riverina rice industry will certainly retract and families, communities and businesses will suffer as a result. .

“Finally, I think it’s important to understand that the company Mr Bell is attacking is owned by us, the growers. If we don’t like the direction it is taking, that’s what our voting rights are for. We’ll change the Board, not switch companies,” said Mr Gordon.

“It’s critical that the NSW Government continue vesting and the sole and exclusive export arrangements; they have been proven – time and again – to be in the best interests of the growers and the regional communities our industry supports. That’s why their continuation was unanimously supported at every RGA Branch meeting and at meetings across our regions attended by the heads of industry, business and community.

“These attempts to destabilise our industry and our company will have disastrous consequences if they succeed.”

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