March 24, 2010

Australia's wheat export needs further free-up

Australia's wheat export market should be further deregulated, the Productivity Commission has recommended.

In a recent draft report, the commission also said the abolition of the single desk, through which all Australian growers had sold wheat to the same buyer, had gone "remarkably smoothly".

The commission proposed accreditation of wheat exporters to be scrapped from September next year, along with Wheat Exports Australia and the Wheat Export Charge. 29 bulk wheat exporters have become accredited since abolition of the single desk.

"Looking to the future, the benefits of accreditation will rapidly diminish in the post-transition phase, leaving only the costs," the report said.

The report also found the access test, which aims to ensure wheat-export companies other than the port owner have fair access to the port, should end in September 2014, with arrangements to rely on the Trade Practices Act for dispute resolution.

Grains Council of Australia chairman Jamie Smith agreed accreditation could be scrapped but said some export regulation was needed to ensure Australia's brand was not damaged by exports of inferior wheat.

He said the access test for ports should continue. "We still have natural monopolies on control of the ports in each state. In South Australia, there is a total monopoly," Smith said. "We'd like some oversight there to make sure there is equal access for the rest of the marketers."