Feedgrain users call for ethanol mandate cost benefit analysis

Beef Central, 29/06/2015

AN ALLIANCE of feedgrain users opposed to the Queensland Government’s proposed ethanol mandate has questioned why a quantitative cost benefit analysis has not been undertaken, particularly given concerns about the net benefits of the policy and “lack of due process undertaken to date.”

Don Mackay

Don Mackay

Alliance spokesman Don Mackay, president of the Australian Lot Feeders Association, said in accordance with the state’s Regulatory Impact System (RIS) guidelines, an RIS must be undertaken in association with the development of primary, subordinate and quasi-regulation.

“However, no RIS has been completed – a concerning issue particularly given concerns raised in other jurisdictions where mandates have been considered or introduced,” Mr Mackay said.

“The Victorian Government, for example, decided to not pursue an ethanol mandate because the costs and risks were seen to outweigh any purported benefit.”

“The Federal Government decided to not implement a mandate because no prima facie case had been established, the objectives of the mandate could be achieved by other less costly Government policies and that the unintended consequences of mandates were many, Mr Mackay said.

“The NSW Treasury has also routinely warned that the costs of its mandate outweigh the benefits, there was no net benefit to motorists in terms of fuel prices, the environmental advantages are dubious, and that the only beneficiary was Manildra who have been given a legislated monopoly and a captive market,” he said.

The Queensland Government in its own 2009 qualitative public benefit test analysis also concluded that there was no net benefit from an ethanol mandate.

“Given such concerns, why hasn’t a quantitative regulatory impact statement been undertaken in consultation with stakeholder groups?” Mr Mackay asked.

“The Minister has referenced a Deloitte report in several media statements, but the report does not focus on the costs or benefits of a mandate, merely the potential benefits should all future proposed bio-refinery projects proceed, a large assumption given only one out of fifteen projects since 2002 have eventuated.”

“Importantly the report recommends that assistance should not be provided to the sector as this leads to a mis-allocation of resources and scarce public funds being captured by owners of subsidised businesses.”

The latest concerns about due process follow the recent completion of a public consultation process held after (rather than before) the decision to implement a mandate was made by the ALP Government.

“With this flawed regulatory and public consultation process showing contempt to the general public, it is seriously doubted everyone really understands its overriding negative impacts,” Mr Mackay said.


  • The ‘Against Ethanol Mandates Alliance’ comprises organisations that represent the dairy, cattle feedlot, pork, chicken and egg industries, the marine industry and stockfeed manufacturers.




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  1. Russ Sangster, 23/09/2015

    Just as a sideline to this.
    Grain sorghum exports rose 66% in 2014/15 (preliminary ABS to (890,000 tonnes), China increased 97.1% to $306.9 Million up from $182.2 Million the previous year to be 98% of all Queensland sorghum exports (they like to make some type of beer out of it I believe). Like wise with animal feedstocks exported rose 19% in 2014/15 to $214.8 Million, China had 6% of the 2013/14 exports but increased this to 23% of the total exports last year. Indonesia our largest historically took 23.9% last year. Feedlotters not only may have an ethanol market to contend with but a growing export market for staple feedstocks for feedlots, this will lead to competition I imagine, good for grain growers, feedlotters not so much perhaps.. Awesome to see growth in feedlots as grain fed product to Japan increased to 47% of our total exports last year up from 39-40% seen 2 years ago and 30% 20 years ago.

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