TOUGHER competition laws, independent price monitoring and better fertiliser supply deals.

That's what's needed to ensure farmers pay fair prices for their fertiliser, a Senate inquiry says.

In its final report, the inquiry said the exercise of market power by local fertiliser companies had contributed to soaring fertiliser prices last year.

"An effective monopoly may exist in relation to the fertiliser industry in Australia," the report said.

"Key industry players are able to manipulate the market."

It suggested fertiliser giant Incitec Pivot Ltd may have hoarded fertiliser to keep prices high and exploited a supply deal with Nauru to obtain cheap supplies of rock phosphate.

The National Farmers' Federation welcomed the report, saying farmers had been "disturbed" by the big gaps between local and world fertiliser prices.

"Better transparency in price fluctuations should give farmers much greater confidence they're not being ripped off and allow them to make informed choices about their purchases," NFF chief executive Ben Fargher said.

But Incitec Pivot Ltd slammed the report for repeating "false allegations" and making "factual errors".

"I'm very disappointed the report repeated a number of allegations, including claims about the purchase of phosphate rock from Nauru and the hoarding of product, which were shown by Incitec Pivot to be patently untrue," IPL's Australian fertilisers general manager, Gary Brinkworth, said.

He said IPL was "very supportive" of greater transparency in pricing and was taking steps to achieve this and reduce price uncertainty for growers.

The report said ABARE should monitor global prices and get the information out to farmers.

Trade practices laws should have more teeth to crack down on market power abuses, including "trust-busting" divestiture provisions, it said.

Fertiliser companies should publish information on stocks and provide more certainty in filling orders, and, where possible, supply deals should be more structured and include standard contractual terms.

And there should be uniform description and labelling of fertiliser products across Australia, with regular sampling, it said.