NSW Productivity Commission submission to the 2021 Rice Vesting Review

About the submission

Under the Rice Marketing Act 1983 (NSW) all rice produced in NSW for export is the legal property (known as ‘vesting’) of the NSW Rice Marketing Board who issue one Sole and Exclusive Export Licence (SEEL). This is Australia’s only remaining single-desk statutory marketing board.

The NSW Productivity Commission submission to the Department of Primary Industries’ (DPI) 2021 Rice Vesting Review presents the results from independent economic analysis of the net benefits of rice vesting. The independent economic analysis was a key input into the Rice Vesting Review and was undertaken by the Centre for International Economics (CIE) for the NSW Productivity Commission. The submission and CIE analysis were informed by significant industry engagement, comprising 39 separate industry meetings and workshops with growers and industry representatives in the Northern Rivers and Riverina/Murray.

Read the DPI Rice Vesting Review Report

Key findings

• The NSW Productivity Commission found no evidence that rice vesting is resulting in higher export prices than would be achieved in the absence of rice vesting. Observed export price differences are better explained by the power of product differentiation and branding.
• If the rice vesting arrangements were removed, the current SEEL holder, SunRice, would retain a dominant market position due to its existing infrastructure, domestic and export arrangements, and regional economies of scale.
• Removing rice vesting and domestic regulations would increase the net value of the NSW rice industry from the growth and development of domestic and export supply chains, with benefits for the Northern Rivers and Riverina regions. These benefits are expected to be higher over the longer term as the industry develops and innovates.
• Growers will continue to receive a competitive return for their rice because of competition between supply chains and supply chains needing to encourage rice production in the face of continued competition for use of land and water.
• The emergence of new supply chains following the removal of vesting would increase regional economic activity, including employment. There would be a small reduction in freight scale advantage of $1.4 million.