Mr JOHN COBB (1:35 PM) —I rise to speak on the Wheat Marketing Amendment Bill 2002 as somebody who is very much involved in the industry, being a long-term grower of wheat and somebody who has dealt with wheat growers for a long time. Wheat is Australia's most important grain crop. Australia exports $3½ billion worth of wheat, on average, every year—although probably not at this current time—and accounts for 17 per cent of the world's export demand. It is our dominant grain crop, representing one-quarter of all Australian farm production. Wheat accounts for approximately 16 per cent of Australia's total farm exports and contributes around $8 billion in annual revenue to the Australian economy. Well over 100,000 farming family members and 70,000 direct employees depend upon wheat for most of their income. The wheat crop affects over 550,000 people, most of whom are in rural and regional or country Australia and in small enterprises. Wheat is particularly important in my electorate of Parkes. Parkes is the largest federal electorate in New South Wales and home to some 3,000 farmers, most of them operating a mixed farming enterprise with a very significant annual wheat production as part of that enterprise.

Average Australian wheat production in the last five years was over 21 million tonnes—about four per cent of the world's output. Record production of 24 million tonnes was achieved in 1999-2000 but, as most people would remember, that was a downgraded crop. Those were the years in which the top half of New South Wales was inundated with rain and flooding. It was a very big crop but a very downgraded crop and therefore not as profitable as some. Australia exports about 16.5 million tonnes of wheat each year, or 16 per cent of the world trade, worth around $4 billion, making us the third-largest exporter of wheat in the world, behind the United States and Canada.

We as a government recognise the value of wheat production to the Australian economy and certainly to country people. As a commodity wheat is vital to the strength and prosperity of our whole economy and, again, definitely vital to the rural economy. It has made us a very powerful player in international trade and a very respected agricultural exporter. Over the years the Wheat Board has gone out of its way to educate buyers—to teach them how to use our wheat to produce the sorts of bread that each particular country wants.

One of the reasons why we are respected was underlined very recently when our government purchased 100,000 tonnes of wheat which, because of the war, obviously could not be sold directly to Iraq and was stranded. The government purchased the wheat by agreement with Australian Wheat International, and it is going to be given to Iraq as a humanitarian gesture. That will also stand Australian wheat growers in very good stead when we sit down after the conflict to work on the 50 years of trading harmony that we have had with Iraq—not with those who run Iraq but with those who deal with the grain, those who mill it. This gesture of 100,000 tonnes of wheat bought by the government to give to the citizens of Iraq will stand us in very good stead in the future. Our government is very keen to protect that market. That is why we are moving to protect our international reputation as a wheat dealer and that is why we are moving to amend the Wheat Marketing Act 1989 to provide for the continued funding of the Wheat Export Authority, the WEA, by the wheat industry.

The Wheat Export Authority is an independent statutory authority which was established on 1 June 1989 as part of the restructure of the Australian Wheat Board when it was privatised to basically give growers control of their own board. The WEA was set up to control the export of wheat after the transfer of the government's wheat marketing and selling role to AWB Ltd, a private company controlled by wheat growing shareholders. The Wheat Export Authority operates independently from AWB Ltd and its subsidiaries, which include AWB International Ltd.

The WEA operates under the Wheat Marketing Act 1989 and has three main functions. The first of these is to control the export of wheat from Australia—in other words, who can do it. Obviously the single desk means that all bulk wheat and a very high proportion of container wheat can only be exported by AWB International. The WEA's second role is to monitor AWB International's performance on wheat exports and examine and report on the benefits to growers of that performance. Its third role is to conduct a review of, and report to the Minister for Agriculture, Fisheries and Forestry on, the way AWB International Ltd uses its wheat export rights under the legislation before the end of 2004. I will come back to that. The 2004 review is an important time in the lives of wheat growers and of the AWB in terms of how it performs its role and how the single desk continues.

With this bill we are proposing to set up a funding mechanism which would allow the wheat industry to meet the running costs of the Wheat Export Authority. The first component of the bill consists of a charge applied to all wheat exports to commence during the first half of 2003. Essentially, this means that the industry would continue to fund the body that represents them. I believe that the wheat industry, rather than the government, should fund the Wheat Export Authority. We have privatised it. It is no longer run and controlled by government; it is controlled by the growers. We want the WEA to do a job for us in reporting to the government on how the AWB is doing but, more essentially, the Wheat Export Authority has to monitor the way in which the single desk and niche markets are utilised. It is doing that on our behalf, for our profitability, and I think that we are the ones who should fund it.

Without a doubt, wheat growers are the main beneficiaries of the Wheat Export Authority and the single desk marketing system it represents. As the previous speaker, the member for Maranoa, said, without doubt the vast majority of growers do support the single desk. I fully support the wishes of wheat growers—I am one myself—and I certainly support the single desk. I have not been much of a wheat grower this last season, though. A lot of us in New South Wales, especially those in the west, have had to take a bath as far as any wheat—let alone wheat exports—is concerned. But let us be a bit optimistic for the future.

We must have a system whereby those who seek out profitable small markets can take advantage of them on behalf of the grower, because this is essentially about the grower and about niche markets. Any system you set up to monitor and report has to be funded; it is as simple as that. This bill is about ensuring the harmony of the wheat industry. I repeat: it is about ensuring the harmony and progress of the wheat industry, essentially the export industry. Although some growers put their money into the pool through the Wheat Board, many do not. In New South Wales we have a huge domestic industry; in fact, the majority of wheat in New South Wales is consumed domestically. Western Australia has a huge export industry; far and away the majority of Western Australia's wheat is exported. In this day and age there are many options for the wheat grower, both domestically and internationally. If growers or their agents are able to seek out container markets—niche markets—with obvious profitability, we need to look after them. A lot of the time the Wheat Board, dealing in bulk wheat, has neither the resources nor the desire to do so.

The Wheat Export Authority's functions have to be funded and it stands to reason that, as we privatise wheat boards and grain handling authorities, government is now merely the factor that legalises the way in which wheat is dealt with, not the factor that controls it. That is essentially in growers' hands. I very firmly believe that it is up to the industry to fund that process. We cannot have our cake and eat it. This legislation is necessary and I very much support it.

I totally support the single desk and at the same time I also support the right of exporters or growers, who find niche container markets, to take advantage of a price above the norm. For that to happen we have to ensure that growers contribute to, and have a certain degree of control over, the body that represents them. The levy proposed in this bill asks growers to contribute to the Wheat Export Authority, the body that represents the single desk and the export value of their commodity. But the Wheat Export Authority needs money to work. Wheat growers agreed—in fact, they expressed a desire—to privatise the wheat board, and that includes the responsibility to fund it.

There are varied views about niche markets and container traffic and there are many arguments as to why grain dealers should be able to export to niche container markets. Most of these markets are small but profitable. The containers quite often go to ports that cannot take the deep draught of a bulk ship. Quite often millers simply cannot handle the vast quantity of bulk grain on a container ship; they can only handle containers and small amounts of grain—but by and large they are profitable. Sometimes it is simply a matter of the importers not being able to use bulk wheat because physically the ships cannot get in. But those markets are real, they are there and they are genuine.

As I said, bulk wheat shipments should remain under the single desk system. However, I believe that the Australian Wheat Board would be well advised to take note of the activities of those who want to take advantage of niche markets, strictly in container traffic—I am not suggesting for one second that this would ever be part of the bulk market. Given that there is no question of bulk wheat shipments going outside the single desk—certainly not at this time, because I agree that the vast majority of growers believe utterly in the single desk—the Australian Wheat Board would be well advised not to be overprotective in its advice to the Wheat Export Authority when applications are made by exporters for container shipments.

Container traffic is well under five per cent of total wheat exports and not likely to go above that. But it is a good market. It is one that brings profitability to a lot of people and exporters who work on the growers' behalf—as does the wheat board. It is unfortunate that so many people, especially grain growers, have been affected by the drought in recent times. As we get nearer to late April and May—we only have a month—people will be looking to sow. Many areas of Australia—and certainly in New South Wales, including my areas in the west—have not had rain and that would lead us to believe that we will not be able to get in a big crop. However, I hope that this year we will get a good crop. I commend this legislation to the House and to the Senate.