June 4, 2008

Australia farm ministry wants senate to approve bulk wheat export bill

 

Australian Agriculture Minister Tony Burke said Wednesday (June 4, 2008) urged the Senate to approve legislation covering liberalization of bulk wheat exports, after the bill won majority support in the House of Representatives.

 

The legislation was supported in the lower house by the Liberal Party, the majority partner in the opposition coalition. Support by Liberal Senators in the upper house - which now looks likely - will ensure passage of the bill.

 

Burke said he is grateful for the support received in the House of Representatives and hope the law would receive similar support in the Senate.

 

A key issue in the legislation is the level of formal regulation applied to upcountry and export terminal infrastructure.

 

But in supporting the bill late Tuesday, Opposition Leader Brendan Nelson said he does not want bulk handlers at ports to be subject to heavy handed regulation.

 

"The bulk handling companies should be given the opportunity to prove themselves in the new bulk wheat exporting environment," he told the house. "If no problem arises then there is no need to impose heavy handed regulation."

 

Broadly, the legislation reflects the Liberal Party's philosophical belief in individual freedom and the freedom to choose, Nelson said.

 

Wheat export arrangements will move toward the same deregulated system that operates for virtually every other commodity, including those often produced on the same farms as wheat, bringing the benefits of competition to growers by giving them a greater choice in selling their wheat, he said.

 

The reality is that retention of the single desk would not serve growers well, he said.

 

"Under a deregulated system, new opportunities will be available from the innovation and diversification that will arise," he said. "The time has come to introduce competition and choice into the wheat export market."

 

Under the legislation, regulator Wheat Exports Australia will accredit multiple exporters, ending a protected system that allowed AWB Ltd. (AWB.AU), to operate an export monopoly or dominate exports.

 

At stake in the legislation for the 10 to 12 domestic and global commodity marketers expected to seek accreditation as bulk exporters is a share in an annual export trade that has in the past reached nearly AUS$5 billion in value and almost 18 million tonnes of wheat, or more than 15 percent of the annual world wheat trade.

 

"Australian wheat growers are getting a better return than they would have if they were only able to sell under AWB. I don't think you would get a better example of what competition can deliver," Burke said.