Review of the Rice Marketing Act 1983 - Report and Information Paper

Report

Download the report:

• Review of the Rice Marketing Act 1983 - A report prepared for the NSW Minister for Primary Industries (552kb PDF)

Information paper

1. Why review the Act?

The Rice Marketing Act 1983 (the Act) requires the NSW Minister for Primary Industries to review the Act by the end of 2010. Statutory reviews such as this must comply with the State's National Reform Agenda commitments. The review’s Terms of Reference and consultation process are detailed in Attachment 1.

2. What will be reviewed?

The review will examine the objectives of the Act and whether the Act is the best way to achieve those objectives. Given that the Act's principle feature is to constitute the Rice Marketing Board of NSW (the Board), the role of the Board will be a focus of the review.

3. What is the review process?

The Minister for Primary Industries, the Hon Steve Whan MP, has appointed an independent consultant to conduct the review. Industry & Investment NSW will assist the consultant with the following review process:

4. Main features of the Act

The Act was originally named the Marketing of Primary Products Act 1983 (MPP Act) and constituted a number of marketing boards and committees, including the Rice Marketing Board of NSW. Marketing boards often had 'vesting' powers, whereby a designated crop was legally owned by a board rather than growers to facilitate collective marketing. Over time, MPP Act boards and committees have been reformed or reconstituted under different legislation. The Rice Marketing Board is now the sole NSW agricultural statutory authority with vesting powers.

5. Domestic rice market deregulation

Prior to 2005, Ricegrowers Ltd (trading as Sunrice) was the Board's sole domestic and export rice selling agent. However, National Competition Policy reviews in 1995 and 2005 resulted in the National Competition Commission (NCC) recommending removal of the domestic monopoly. This recommendation was effected by the passing of the Rice Marketing Amendment (Prevention of National Competition Policy Penalties) Act 2005, which maintained a single desk for exported rice but deregulated the domestic market. Consequently, a number of agents (authorised buyers) are approved to buy and sell rice domestically, however, Sunrice is the sole agent authorised to export NSW grown rice.

Deregulation of the domestic rice market necessarily resulted in a recasting of the Board's proclaimed objects (goals). The Board now has three objects:

1. to encourage the development of a competitive domestic market for rice;
2. to ensure the best possible returns from rice sold outside Australia based on the quality differentials or attributes of Australian rice;
3. to liaise with and represent the interests of all NSW rice growers in relation to the Board's functions and objects.

6. The export rice single desk

The review will consider the balance of benefits and costs of the single-desk.

Export 'single desks', such as that operated by the Board through its sole agent, SunRice, have the potential to generate price premiums for producers which are offset to some extent by the administrative costs of the Board.

While these benefits and costs will be considered by the review, the views of ricegrowers about the balance of these benefits and costs will be critical to the overall assessment.

7. Restrictions on competition

The Act forces certain things to occur that would not occur in an unregulated market such as:

1. the prohibition of rice exports by anyone other than the Board's sole export agent (SunRice);
2. the requirement on domestic traders to pay authorised buyers fees; and
3. the requirement for domestic rice traders to be licensed.

While these regulatory provisions require that certain things occur, they may be beneficial if their associated benefits outweigh their costs. The review will therefore invite submissions on the benefits and costs of NSW rice industry regulation from the perspective of both growers and the broader community.

8. Support for the Act and the Board

In considering whether the Act and the single export desk generate net benefits, the level of support for them by growers will be important. The review will therefore consider the extent to which growers are aware of the benefits and costs of the Board's single desk operations on an ongoing basis.

Attachment 1 - Terms of Reference and consultation

Terms of Reference

• Identify the objectives of the Rice Marketing Act 1983 and consider whether the policy objectives of the Act remain valid;
• Assess if the Act remains the most efficient way to achieve those objectives with the least impact on National Competition Principles, namely that legislation should not restrict competition unless it can be demonstrated that:
  • the benefits of the restriction to the community as a whole outweigh the costs;
  • the objectives of the legislation can only be achieved by restricting competition.

Consultation

The review team will attend Ricegrowers' Association of Australia Inc. regional branch meetings in June to canvass the review objectives and processes with growers. (See below.)

The NSW Government invites written submissions to the review. Submissions can be sent to the address below, emailed to julia.trethowan@industry.nsw.gov.au or handed in at RGA branch meetings.

Rice Marketing Act 2010 Review
Ms Julia Trethowan
Locked Bag 21
Orange NSW 2800

Feedback is also invited via the online survey at www.surveymonkey.com/s/ricereview

The deadline for written submissions is 5pm Friday 23 July 2010.

Attachment 2 - Tables

Table A1: Irrigation water allocations in rice growing areas 2000-2009

Table A2: Rice production statistics 2000-2009