AUSTRALIA'S largest wheat grower, Ron Greentree, has alleged to a Senate inquiry of price fixing, abuses of monopoly power and high levels of obstruction by fertiliser giant, Incitec Pivot, following attempts earlier this year to try and buy and import his own fertiliser supplies to beat exorbitant domestic prices.
Mr Greentree, who will this year plant 94,000 hectares to wheat, barley and chicpeas in the north-west NSW cropping belt, claims there is an arrangement in place preventing farmers like him from dealing directly with manufacturers to buy fertiliser.
He also alleged domestic retail prices on the Australian east coast were fixed, and set at the same level by Incitec Pivot and Orica.
Mr Greentree is a large user of anhydrous ammonia, or NH3, and is "very frustrated" with the way fertiliser is being retail-priced to farmers.
He said he had been trying to get a price quote for NH3 from Orica, which has a plant based at Newcastle, and IPL, based at Brisbane, but neither company would quote or sell fertiliser to him outside the retail market.
He explained that while he was being told by IPL that current prices for urea and NH3 were competitive with world prices, these prices were well in excess of what he could buy and freight the same product for from the west coast.
"An FOB price out of the Burrup plant in Western Australia or any other plant in the world is around $US200 to $220 a tonne or about $300 Aussie dollars," Mr Greentree said.
"When you (add) $40 (a tonne) ocean freight to come from WA around to the east coast and $80 to get up country, $30 farm delivery and $20 for commission for a retailer it comes to about $450 to $470 Aussie a tonne.
"The price at the moment to get it on farm from IPL retail yesterday was $1062 a tonne delivered on farm. At the same time, urea was $660 a tonne."
Mr Greentree said the retail price for what he can have delivered on farm in north west NSW – almost an equal distance between Brisbane and Newcastle - were nearly always exactly the same from either plant, even though they've got different owners.
Mr Greentree told the hearing the market would not allow him to compete against IPL or break the arrangement of supply, forcing him to a single purchaser.
"IPL have got one price that they sell to us as farmers, and they have a price that they buy from Orica to sell into explosive products," he said.
"In WA it's a global market price, but when it comes back to Newcastle it's whatever the market will bear locally."
He claimed there was "most definitely" evidence of price collusion.
Mr Greentree said attempts to import his own urea this year were up there with some of the hardest experiences he has ever had.
"We decided we wouldn't take any more of this nonsense on this NH3 and, through a local retailer, we set up a contract to import some urea ourselves," he said.
"We eventually got it. The price of urea today that I can deliver onto my farm here at Mungindi is AUD $660 a tonne, at the time we did the deal it was about AUD $820 and we finally landed the urea on farm through Yarrah (another major international fertiliser firm) to land in March at $525 a tonne.
"They (IPL) put every obstacle in the way. The shipment was actually late, it was loaded out of Libya, we bought in 10,000 tonnes and IPL got word of it and really slowed it down because there wasn't a full boatload and it was made up of some IPL urea as well,
"As they slowed it right down, that fertiliser didn't make it into Australia until the middle of April when it was supposed to be here at the end of February.
"They put everything in the way to make sure we couldn't get that, but we won in the end and that saved us from paying in excess of $300 a tonne on a retail price, and we still used a local retailer."
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