AWB’s role as Australia’s monopoly wheat exporter may officially still be in the balance, but Western Australian wheat growers have already begun preparing for a shake-up of the 68-year-old wheat marketing system.
AWB’s role as Australia’s monopoly wheat exporter may officially still be in the balance, but Western Australian wheat growers have already begun preparing for a shake-up of the 68-year-old wheat marketing system.
The report by the Cole Commission, tabled in federal parliament earlier this week, recommended 11 former AWB staff be investigated by a newly formed taskforce for possible criminal and corporations offences over the $290 million in kickbacks paid to Saddam Hussein’s regime.
Prime Minister John Howard has pointed to the likelihood of legislative changes to the single desk marketing system and the role of AWB Ltd, but the coalition remains divided over the extent of the changes.
Richard Koch, managing director of commodity analysts ProFarmer, said the industry had been preparing itself for the worst since the early days of the Cole inquiry.
“It’s pretty much as bad as anticipated. Really the writing’s been on the wall [for AWB] since the early days of Cole,” he said.
Mr Koch said there had been a groundswell of support to initiate some immediate changes. Among these is a stripping of AWB’s power of veto on wheat export applications, with an independent regulator such as the Wheat Export Authority to assume this role.
But the criteria around how the government instructs the WEA, which has been criticised in the past for being a toothless tiger, to issue export licences will be a critical factor.
“They could just shift the power of veto from the AWB to the WEA, but make it so restrictive that the change isn’t effective,” Mr Koch said.
“On the other hand, if they were to structure some loose criteria around the issuing of licences, it could have a significant impact on this year’s crop.”
He said comparing the potential fall-out and structural adjustment costs of wheat export deregulation with that of the dairy industry was “absurd”.
“The wheat industry has been shaped by competitive forces for the past two to three decades, and we have a strong internationally competitive industry,” Mr Koch told WA Business News.
Although AWB has been gradually losing grower confidence since the early days of the Cole inquiry, there is still strong grower support for the single desk as a marketing concept.
WA Farmers grains council president Robert Doney believes the single desk marketing system should be retained, but under grower control.
He said the government should consult with growers on any legislative changes.
“I hope they make a quick decision, but not a hastily developed decision,” Mr Doney said.
He was also quick to highlight that the single desk itself was not under inquiry, and that the reputation of the product internationally was unlikely to be adversely affected.
“The AWB probably has a black mark against it, but not WA wheat growers. The single desk has done no wrong,” he said.
Geraldton zone wheat grower Richard Cobley believes the AWB did what it had to in order to secure wheat sales to Iraq in a highly competitive market.
“AWB’s job is to sell wheat, and they have to compete against the US and the UK who pay their farmers subsidies,” Mr Cobley said.
“If the rules of engagement are that you paid this trucking fee, if you didn’t do it somebody else would. But that doesn’t excuse what some [AWB executives] did.”
Mr Cobley said he supported the lifting of the AWB’s power of veto this season, provided the allocation of licenses was tightly monitored by a regulatory body.
