Rice Industry Monopoly Hampering Growth?

Article by: Hari Yellina

Rice farmers in the Northern Rivers claim they’ve been handed another blow after losing half their harvests in the previous floods. The sole rice marketing desk in New South Wales will be extended for another five years, preventing northern NSW farmers from accessing export markets. The decision comes after the NSW Department of Primary Industries conducted a five-year assessment of rice vesting procedures. Riverina rice growers, who produce 98 per cent of Australia’s rice harvest and mostly supply SunRice, which owns the country’s sole export licence with the Rice Marketing Board, have applauded the decision. However, Steven Rogers of the Natural Rice Company of the Northern Rivers said he was surprised and dismayed that the present vesting procedures will be kept.

“The rice sector in Australia is a monopoly, and anyone wanting to get into it gets pushed back so far that they disappear,” Mr Rogers said. Northern NSW rice is farmed without irrigation, relying primarily on summer rain, unlike rice grown in the Riverina. This, according to Mr Rogers, provided them with a point of differentiation that importers were very interested in. “For their sustainability, the globe is seeking for our kind of rice… that low-emissions, low-water-use rice.” He estimated that half of the region’s crops were lost in the seven-week floods. The NSW DPI investigation found “no clear evidence” that vesting was yielding higher pricing for NSW rice exports by restricting export competition.

SunRice, the current exclusive export licence holder, was likely to continue to get support from the majority of its producers, many of whom had a financial and controlling stake in the company, according to the report. The choice to have a single rice marketing desk, according to NSW Agricultural Minister Dugald Saunders, gave certainty to most growers. Mr Saunders stated, “The input I received from growers was that they appreciate the vesting arrangements as they are.”

According to him, there was only one point of contact for buyers and sellers of Australian rice thanks to the Rice Marketing Board and their partnership with SunRice. “If you split that up and put various individuals on the field, you may find that your potential to obtain the greatest deal overseas is harmed. He did, however, accept that adjustments may be done to help other rice-growing regions, launching an independent report into some of the issues outlined by the NSW DPI review. “Part of the point of conducting a study is to determine what would work for both southern and northern growers in order to ensure that both parties have a future.

Rob Massina, president of the Ricegrowers’ Association of Australia, from Finley in the Riverina, said the independent assessment was welcomed. Mr Massina explained, “It’s about adjusting to change and recognising what the rice sector would require in the future.” Rice markets around the world, according to Mr. Massina, are closely regulated by governments. “Gaining scale from an Australian rice business to compete in multiple markets and at different periods can give rice growers a lot of benefit.” In contrast to the flood-ravaged Northern Rivers, the Riverina is witnessing a bumper rice harvest, with total tonnage delivered expected to be close to 700,000 tonnes. Mr Massina said it was more than ten times what had been produced in previous seasons, which had been hampered by drought and low yields.