February 16, 2006

 

Australian report backs deregulating farm marketing           
 

 

A report commissioned by the Australian government has found merit in deregulating agricultural marketing - just as a debate about a wheat export monopoly operated by AWB Ltd. intensifies.

 

The report noted that for many years up to the 1990s, the sale of many Australian agricultural commodities was controlled by statutory marketing authorities. This meant farmers had little or no involvement with their output once it left the farm.

 

"The freeing up of most Australian agricultural marketing arrangements has increased the scope for the sector to respond to changing demand and encouraged more innovative work between supply chain participants," according to the report, which was issued Thursday.

 

The report to the government, "Creating Our Future, Agriculture & Food Policy For The Next Generation," was prepared by the Agriculture and Food Policy Reference Group headed by National Farmers Federation President Peter Corish.

 

Australia is a major global supplier of many farm products, including grains, meats, fibers, horticultural and dairy products.

 

Its agriculture and food sector increasingly mirrors global market trends such as consolidation through the supply chain to retailing from processing and production, the report said.

 

Effective supply chains and market structures that can adapt to meet these and other changes will be important to the success of Australian businesses, it added.

 

The report urged the government to accelerate the development of consumer-driven, efficient supply chains.

 

It also noted that the most significant export monopoly remaining is that for wheat operated by AWB, with a review of this under national competition policy scheduled for 2010.

 

It noted strong views about the future of the monopoly, with many growers passionate about the benefits "they believe it continues to offer," while other growers, including some larger ones, prefer competition for their business.

 

Freeing marketing can be daunting for some producers, but as they gain experience in a less regulated system, the great flexibility of action and ability to respond more rapidly to market demands will provide increasing benefits, it said.

 

Under the competition policy review, those advocating a continuation of the status quo for the wheat export monopoly must establish its continuation in the public interest, it said.

 

Corish said the report identifies the major issues that need attention to ensure the sector's success in the next decade or more, and is broadly aimed at improving profitability, sustainability and competitiveness.

 

"The priority is to develop self-reliant and profitable agriculture and food businesses," he said in a statement.

 

A partnership approach linking farmers, food manufacturers, representatives, communities and governments is often the best way to tackle challenges, he said.