February 9, 2007

  

Australia wheat growers send mixed signals on export monopoly

 

A large meeting of wheat growers Friday in the southern New South Wales town of Narrandera strongly endorsed the operation of a wheat export monopoly by a unit of AWB Ltd., even as national grower lobby Grains Council of Australia again decided against backing the company.

 

Ron Boswell, leader of The Nationals in the Senate, the junior member of the governing Coalition who attended the meeting, said 450 growers unanimously resolved AWB's international unit should be the only licensed exporter of bulk wheat for the 2006 and 2007 harvests, and called on the government not to issue more export licenses.

 

"The growers that I have met and spoken to are telling me clearly that the single desk is their last defense against the high subsidy nations, including the US and the EU, and that the only people who will benefit from its demise are Australia's overseas competitors," Boswell said in a statement.

 

"Any growers that want the single desk dismantled, or want more export licenses issued, are proving very hard to locate in the crowd," he added.

 

Feelings about the future of the wheat export monopoly are running high among growers as a four-member panel appointed by the government consults with growers and the industry about their export wheat marketing needs. The panel is holding 25 public forums around the nation, the first of which was held Jan 31 in Queensland, with the last scheduled in Perth on Feb 23.

 

The government will use the panel's report, which it wants by Mar 30, to inform a decision it will make about future wheat export marketing arrangements.

 

Annual wheat exports from Australia in a big year can nearly reach 20 million tonnes by volume, and almost A$5 billion (about US$3.896 billion) by value.

 

Meanwhile, a meeting of Grains Council of Australia this week recommitted to the principles it believes should underpin any future wheat marketing system.

 

"The policy principles are based on a belief that the industry will never return to the status quo that existed prior to the Cole Commission," Murray Jones, the council's chairman said in a statement.

 

Grains Council wants government policy to take a long-term view for the economic benefit of "growers and the industry as a whole," he said.

 

Also, Grains Council believes some form of regulation of wheat exports must remain, but are not prepared now to go further than that, he added.

 

Jones rejected a suggestion by Boswell that Grains Council should support AWB, saying the council's members, which are autonomous state-based lobbies, have the right to present their own models to the consultative committee, based on their regional priorities and export profiles.

 

South Australia Farmers' Federation grains council this week, for instance, called for a staged deregulation of wheat exports.

 

The council's principles include ownership and control by growers of the export system, security of payments, maximisation of net returns through supply chain efficiencies and market development, high levels of governance and transparency, ownership of the "single desk franchise" to be separated from any organisation providing commercial services to it, contractual arrangements between service providers and the single desk owner to be transparent and contestable.

 

The government's move to consult on export marketing needs followed a report from an inquiry about AWB's payment of US$221.7 million in kickbacks to the former Iraqi regime of Saddam Hussein under the UN oil-for-food programme.

 

That inquiry, headed by former state judge Terence Cole, found AWB might have broken local criminal and corporate laws by making the payments. 11 former AWB executives were named to have possibly acted illegally. A police task force is looking into the report.