Given the significant role rice plays in supporting businesses and communities in the Riverina, it is critical ricegrowers and others interested in the prosperity of this industry participate in the current NSW Department of Primary Industries’ review of state government vesting and export arrangements.
Globally, Australia is a small rice producer, with our rice grown almost exclusively in the NSW Riverina, around the Murray and Murrumbidgee valleys.
Smaller rice industries also exist in Queensland and the NSW North Coast.
In years of average water availability, the industry usually produces less than a million tonnes, of which around 80 per cent is sold to export markets.
While some people may advocate a deregulated export market would benefit the rice industry, as it has for certain other Australian crops, it is important to highlight how rice is different.
The small volume of rice exports means the industry is in a relatively weaker position to compete in the global rice market.
Unlike growers in the majority of other major rice producing nations, Australian rice growers receive no subsidies or tariff protection from government.
There are also no material barriers to foreign producers who want to import rice into Australia.
Many rice export markets have country-specific quota systems and rice was not included in the recent much heralded free trade agreements that Australia negotiated with key countries in Asia.
For example, Japan, South Korea and Taiwan limit the amount of rice that can be imported from Australia, overseen by a single government buying agency, and Australian rice cannot enter the Chinese market due to government imposed non-tariff barriers.
When it comes to addressing some of these challenges, it makes no sense for multiple sellers of Australian rice to be dealing with single desk buyers or fixed country-specific quotas, and it can also make it difficult for Australia to negotiate the removal of non-tariff barriers.
It would mean Australians competing with Australians, pitted against a sovereign buyer, all vying for a small slice of a protected and restricted market.
Every past review has assessed the export arrangements since they were first implemented in 1983 (there have been four such reviews since 1995).
These reviews supported the findings that current arrangements enabled SunRice, the holder of the export licence, to deliver significant price premiums in export markets to the benefit of Australian growers.
These price premiums are largely achieved by exporting the majority of rice as packed consumer products under SunRice brands.
Many of these brands have become synonymous with high quality rice products associated with NSW-grown rice, and are backed by SunRice’s research and development activities, processing infrastructure and supply chain quality assurance.
Independent reviews have found SunRice’s export price premiums, which are achievable through vesting arrangements, totalled almost $250 million between 2013 and 2015.
For the year to April 30, 2015 alone, SunRice delivered a price premium to growers of $82 million.
These premiums contribute to the paddy price per tonne achievable for Riverina growers.
In addition, the reports have showed SunRice has achieved average medium grain export prices greater than other international competitors for the majority of the last four years.
Rice vesting and its export licence together maintain a competitive advantage for NSW-grown rice.
These arrangements allow SunRice to consolidate export channels, maximise sales and marketing scale, and drive supply chain efficiencies to provide stability and continuity for NSW rice growers, who compete in international markets without any production or export subsidies.
Importantly, the majority of rice growers support the continuation of existing vesting arrangements, with all branches of the Ricegrowers’ Association of Australia (RGA) passing unanimous motions for the renewal of these arrangements at meetings in June.
In 2012, 93 per cent of all submissions to the NSW government review favoured retaining these arrangements.
To show their support for the NSW rice industry and to protect the future of the rice export price premiums it generates, Riverina rice growers, businesses and communities have until September 14 to lodge a submission in support of rice vesting and export arrangements.
For more information on how to make a submission is available from Rachel Kelly at Rice Growers Association (02) 6953 0433.
Submissions can be sent to rice.review@dpi.nsw.gov.au or mailed to Rice Vesting Review, C/- Ms Leah Mansfield, Department of Primary Industries, Locked Bag 21, ORANGE, NSW, 2800.
Jeremy Morton is president of the Ricegrowers' Association of Australia
