June 6, 2007

 

Australian wheat growers meet to mull future marketing plans
 

 

Australian representatives of five state-based wheat grower lobbies met Wednesday in Melbourne to begin what could be the complex task of deciding on future arrangements for export marketing of their product.

 

The working group will in due course consider possible models for export wheat marketing, but at this inaugural meeting, it is likely to set up broad housekeeping arrangements, such as the position of chairman and spokesman, as well as being briefed on the progress of a possible demerger of AWB Ltd's international unit, which managed exports for the company, an industry source said.

 

Prime Minister John Howard told growers late May to come up with a new entity to manage the wheat export single desk, which could be a completely new entity or AWB's demerged international unit.

 

If growers cannot agree on a new entity by Mar 1, the government will propose other marketing arrangements, which would include further deregulation, he said.

 

The government will extend existing wheat marketing arrangements for exports, which include a veto power held by the agriculture minister, up to Jul 1, 2008. Under the earlier system, AWB held the power to veto export proposals by other entities.

 

The meeting was to be briefed by AWB and by Deutsche bank, which has been appointed by AWB to advise on the demerger.

 

John Ridley, chairman of the grain section of the New South Wales Farmers' Association, one of the grower lobbies participating, said an independent consultant would likely be appointed to coordinate formation of a new single desk company in the event AWB shareholders reject the demerger proposal.

 

Ridley said there has been outside interest from financial firms interested in backing a new single desk, according to a report on Australian Broadcasting Corp. radio.

 

Agriculture Minister Peter McGauran said Wednesday that while growers had asked for time to progress the demerger or establish a new company to manage the single desk, the government did not task any particular group to drive the process.

 

Growers indicated that they want a company that is owned and controlled by them, and the government is giving them the freedom to determine how that will be structured and operated, McGauran said Thursday through a spokesman.

 

The conditions placed on the process by the government are that the new entity is registered under the Corporations Act, that it is completely legally separate from AWB, and that it has a strategy developed to allow it to take over management of the single desk before the 2008/09 harvest, he said.

 

"Management of Australia's wheat exports is a significant undertaking and the government will need to be satisfied that the new entity is up to the task before it designates it as the single desk holder," he added.

 

This is an opportunity for growers to come to an arrangement that suits them, he said.

 

Peter McBride, a spokesman for AWB, said the demerger is its preferred option to reform the current arrangements.

 

"We will work cooperatively with the grains industry on these issues," he said by telephone.

 

Brett Roberts, chairman of the grains section of the South Australian Farmers Federation, which wanted a staged deregulation of wheat exports, fielded a representative at the Melbourne meeting.

 

Noting that the government has made a decision about the process of deciding future export arrangements, Roberts said it is better for farmers from his state to be involved in the process and in the working party.

 

Other state-based organisations at the meeting represent wheat growers in Queensland, New South Wales, Victoria and Western Australia.