Wheat Port Code Declared Obsolete for Current Industry Needs
- 08-Nov-2024 12:14 PM
- Journalist: Emilia Jackson
The Department of Agriculture, Fisheries and Forestry (DAFF) has published its review of the Wheat Port Code, recommending the transition to an industry-managed framework to replace the existing code. This review, which highlights the need for a modernized regulatory approach, finds that the Wheat Port Code, originally introduced in 2014, is no longer adequately meeting the needs of the grain export industry.
The Wheat Port Code was established to regulate the conduct of port terminal service providers (PTSPs) and ensure bulk wheat exporters had transparent and fair access to port facilities. However, the review concluded that while some components of the code still offer benefits to the wheat export industry, the overall framework is outdated and no longer "fit-for-purpose."
In response, DAFF has recommended that Grain Trade Australia (GTA), in collaboration with the broader grain export sector, develop an industry-managed code to replace the current regulatory framework. The review also suggests that this new industry-managed code should be reviewed by the government within five years to ensure that it is serving its intended purpose and addressing evolving industry needs.
The Wheat Port Code was originally set to expire on October 1, 2024, but considering the review’s findings, the Attorney-General has deferred the "sunsetting" of the code until October 1, 2026. This extension provides the government additional time to carefully consider the review’s conclusions and to implement any necessary amendments. The consultation period for public feedback on the review’s findings is now open and will close on January 31, 2025.
DAFF’s recommendation for a new industry-managed framework includes several provisions aimed at improving the functioning of the grain export sector. Among these proposed provisions are a commitment to deal in good faith with grain exporters, the timely publication of port loading statements, a formal dispute-resolution mechanism, and a commitment to publish standard terms and reference prices. These elements are intended to promote transparency and fair practices throughout the supply chain.
However, the review also highlighted significant differences in opinion within the industry regarding the future of the Wheat Port Code. While most stakeholders agreed that the existing code is no longer suitable, there were divergent views on how to proceed. Grain terminal operators and port service providers have largely advocated for the code to sunset and be replaced by an industry-managed framework, or in some cases, no code at all. On the other hand, exporters and businesses within the broader supply chain expressed mixed opinions. Some believe the code should remain in place, albeit with amendments, while others feel that no code is necessary.
Grower representative organizations were particularly vocal in calling for continued regulation of the export supply chain. Many grower groups acknowledged that the Wheat Port Code was no longer fit for purpose but argued that a more effective regulatory regime was needed to address concerns over the potential misuse of market power by port terminal service providers. A key issue for these groups was the lack of sufficient measures in the code to address concerns related to price transparency and the overall efficiency of the grain export supply chain.
In addition to recommending changes to the Wheat Port Code, the report also explored the idea of extending the code’s principles to cover all grains, not just bulk wheat exports. The review concluded that applying the "good faith" principle across the entire grain export sector would improve the overall functioning of the code, whether through an amended version of the Wheat Port Code or an entirely new industry-managed framework.
The report also highlighted calls from grower groups for a broader inquiry into the grains market and the entire supply chain. They believe that such an inquiry could help inform the development of a more comprehensive regulatory framework to cover all aspects of the grains industry, extending beyond the current focus on wheat port access.
As part of the public consultation, DAFF has encouraged all stakeholders, including industry participants, to submit their views on the proposed changes. The feedback period, which will remain open until January 31, 2025, presents an opportunity for the grain export sector to weigh in on the review’s findings and provide input on the development of any new industry-managed framework.
Matt Lowe, Deputy Secretary for Agriculture, Fisheries and Forestry Policy, stressed the importance of stakeholder engagement, saying that the public submissions process was a critical opportunity for industry players to share their perspectives. He emphasized that the government was keen to ensure that the future regulatory framework supports the long-term success and competitiveness of the Australian grain export industry.