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Senate inquiry into fertiliser pricing continues

By Lauren Jones

The Federal Government established a Senate inquiry into chemical fertiliser pricing and supply in February this year, with the first public hearing held on 16 May. The original reporting date was 16 June but has since been extended to 16 October to accommodate the 47 submissions received at the time of writing. Further public hearings are planned for July and August this year.

Around 50% of Australia’s fertiliser is imported but world cartels and Australian suppliers alike have been dramatically increasing prices over the past year, some by up to $400/t, threatening to put many already long-term drought-stricken farmers out of business.

Chaired by Liberal Senator Bill Heffernan, the Senate select committee examined why fertiliser prices had risen so dramatically, whether there was evidence of collusion by fertiliser manufacturers or distributors, or whether world supply shortages and a growing global demand were responsible.

The revenue earnings of the major fertiliser companies did not escape scrutiny, to see whether they were taking advantage of the demand situation.

Among the first to give evidence to the inquiry were representatives of the National Farmers’ Federation, NSW Farmers Association, Department of Agriculture, the Australian Fertiliser Services Association and the South Australian premier’s special drought office.

In the transcript from the 16 May hearing, Senator Heffernan said there were two issues at hand in controlling the price of fertiliser. “There is the price gouging (sic) of the supplies that were in store and could have been sold at a delivered price earlier in the year, and then there is the global situation and whether cartel behaviour is linked to the rise in prices.

“One of the great frustrations for New South Wales farmers and obviously for those in South Australia and other places is that a lot of the traditional forward ordering, with a price and a delivery, was this year absolutely ignored. The other thing that is a great curiosity… is the import parity price. I am sure that we will be filled with bright and brilliant information on how difficult it has all been. But this has been a one-off, golden opportunity this year to profiteer.”

McLaren Vale viticulture consultant and Australian Viticulture columnist Tony Hoare said rising chemical fertilizer prices were a direct result of increasing oil prices (a component commodity of fertiliser) and world demand. Grapegrowers were just one of many agricultural industries competing for scarce fertiliser supplies.

“Many grapegrowers are choosing to save on fertiliser this season by not applying post-harvest nutrition. They are also leaving the mid-rows unsown to covercrops due to the massive increases in fertiliser costs and added price hikes in seed,” Hoare said.

“This means the mid-row is a less effective tool in assisting growers to manage areas of yield and quality variability in their vineyards. Yields could be reduced and vine growth could be compromised early in the next season with reduced fertiliser use, especially when coupled with the current lack of sub-soil moisture and increased risk of extreme hot weather close to harvest.”

Hoare said he had noticed growers making a change towards pelletised, organic options of fertiliser and raw and composted manures.

“Products such as Dynamic Lifter and Neutrog’s slower release fertilisers have a reputation of being friendly on soil health and offer vines a steady rate of nutrition and growth. Pelletised options means there is less risk of excess becoming run-off, therefore, keeping the waterways clean,” he said.

This article first appeared in the July/August issue of Australian Viticulture. Australian Viticulture will continue its coverage of the inquiry in a future issue. For further information about the Senate inquiry visit www.aph.gov.au/senate/committee/agric_ctte/hearings/index.htm



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