June 19, 2008
A Western Australian farmer lobby Thursday (June 19, 2008) called for a full forensic audit of the activities of AWB Ltd. (AWB.AU) in its dealings with growers' compulsorily pooled collective wheat export sales over the past eight years.
Leon Bradley, chairman of PGA Western Graingrowers, said excessive costs have been systematically deducted from growers' funds in the national pools operated by AWB since privatization in 1999, with these benefiting the company, its management and other parties.
On Tuesday, Agriculture Minister Tony Burke told parliament an annual report to growers in 2007 by the Export Wheat Commission looked at AWB's ship chartering arrangements and found that for 39 charter vessels, the national pool was AUS$14.5 million (US$13.73) worse off for growers than it would have been if prevailing commercial shipping rates had been used.
"I have directed the Export Wheat Commission to investigate this issue and I am awaiting their report," the minister told parliament.
Peter McBride, a spokesman for AWB, pledged the company's full cooperation with this investigation and with any future inquiry.
Burke also said an addendum to the growers report issued Monday "concluded that AWB's hedging strategies were speculative and placed unacceptable risks in the 2005-06 and 2006-07 national pools."
The commission reported Monday AWB's international unit incurred AUS$260 million (US$246.12 million ) in losses on behalf of growers on hedging wheat sales from a crop grown in 2005.
Bradley said Western Graingrowers regards this loss as pure speculative hedging, as there was no offset in a higher sales price for growers.
Nevertheless, AWB recovered this loss from the national pool, in a typical example of the one sided arrangement that skewed a system that was supposed to protect growers' interests, he said.
"Australian farmers deserve a full and truthful accounting of the period," he said.
AWB's McBride declined to comment on the call by PGA Western Graingrowers.
