April 5, 2006

Australia's grain council unveils new model for wheat exports

Australian wheat company AWB's monopoly on exports would be broken under a new plan to overhaul Australia's wheat marketing system.

The new plan was prepared by consultants Marshall Place Associates (MPA) on behalf of the peak grower body, the Grains Council of Australia (GCA).

AWB would lose its power to veto bulk exports by other companies and its competitors would be able to gradually increase their capacity to ship wheat to international markets.

AWB faces damaging evidence at the Cole commission of inquiry that it propped up the former Iraqi government with US$300 million in kickbacks. GCA chairman Murray Jones said the Cole inquiry should be seen as an opportunity for positive change.

MPA's plan would see the Wheat Marketing Act amended to place ownership of the single desk in the hands of growers and set up a new system of primary and secondary export licences. AWB would remain the primary licence holder, but its status be reviewed after three years.

Tonnage under secondary export licences would increase over the next four years to a maximum of 2.5 million tonnes--five times the current level.

Australia has said it would not consider changes to the export monopoly before Commissioner Terence Cole delivers his report, due by the end of June. It is also resisting pressure from the US and the EU to scrap the wheat export monopoly, saying it would not give up the single desk without concessions on market access and farm subsidies.