Mr ADAMS (8:20 PM) —The honourable member for O'Connor (Mr Tuckey) has put down his comments on the bill—and in a fair way he has some serious problems with its make-up and has listed those for the parliament to hear—but he says he is going to follow the party line. I think there are a lot of wheat growers in Australia who have serious problems with this Wheat Marketing Legislation Amendment Bill 1998 .

This bill has quite a long history and it is linked to the ongoing development of the Australian Wheat Board, which came about to provide some sort of security during difficult times for wheat growers many years ago. But in making sure that there was a single desk, or one voice, to speak for the growers in export negotiations, it has taken on the role of a monopoly. It seems that agricultural marketing boards were initially established in the early 1900s. Before their advent there is little doubt that private traders and users underpaid growers for their commodities. In an article recently in the Australian Financial Review, Stephen Wyatt revealed that collusive buying practices, particularly by flour millers, triggered the move towards boards. He went on to say that the Marketing of Primary Products Act 1927 set up marketing controls to assist farmers who were perceived to be in a weak bargaining position compared with the buyers of their crops. Farmers were isolated. They did not know what price their produce was trading at in the world market or indeed in the domestic market centre. There was no general legislation to prevent collusive market practice.

The Australian Wheat Board was established in 1948 and has existed continuously since then. Its principal function is to control the export and overseas marketing of Australian wheat. Its other functions include domestic trading in wheat and export—but not control—and trade in other grains. Times have changed since its inception, of course. The Trade Practices Act was introduced in 1974, and was extended and then strengthened by the Competition Policy and Reform Act in 1995. Farmers are better informed and have access to modern communications—telephones, faxes, computers and now the Internet—even to the extent of having chat lines to debate the issue of the current changes to the Wheat Board. In fact, their chat is recorded on the home page of the Wheat Board and makes interesting reading for those of us who are interested in getting that up.

One at least gets a feeling about the thoughts and aspirations of some of our farm comrades out there. As might be expected, a lot of the discussion is about whether or not it is raining in different parts of Australia. There are also lots of information workshops, and there is excellent potential for passing on information on these sorts of issues. But the discussion also gives a clue about how farmers are thinking on the Wheat Board changes. There does seem to be some concern amongst growers about the structure of the Wheat Board as to whether or not it will satisfy their needs with regard to long-term grower control. The member for Burke (Mr O'Keefe), our shadow minister for primary industries, spoke about this earlier today in this debate. In fact, there is a conflict of interest in the dual class share structure which the honourable member for O'Connor mentioned earlier.

Some growers see that the existing `grower corporate model' structure contains a conflict between the interests of growers, A-class shareholders, and the interests of investors, B-class shareholders. The growers' interests will be subordinate to those of the investors. As the investors will seek to get the highest return and the highest dividends, it would be in their interests to ensure that the farm gate price is as low as possible. So that is a possibility in the future. The growers' shares will be subsidised by those of the investors. Therefore, if there is some suggestion that the board be privatised, those interests could well be taken offshore and then there would be no control over the price of wheat at all.

I found Mr Wyatt's explanation quite interesting in this regard: there are two sides to any monopoly. It can be a buying or a selling monopoly. Marketing boards in Australia generally have both sides of the game sown up. Growers have to sell to the board—termed `vesting' for the buying side of the monopoly—and the board is the only seller of the commodity, both domestically and internationally.

In 1989, changes began to occur when the Wheat Board deregulated the Australian domestic wheat market. This set a blueprint for the other boards to give up domestic buying monopolies but retain the international ones; the idea being to trade off control over the domestic market in order to keep control of the export market. It is said that the review assumes that export monopolies actually confer a net benefit on Australia and that an export monopoly does not impact on the domestic market. But that is not, in fact, true. It is the export monopolist that sets up the domestic market. The criticism is that it is a half-hearted attempt to free up the domestic market, but it does not work. More and more people are reaching that conclusion. The reason given for this is that if the monopoly exporter controls the sale of the vast majority of that commodity in the export market, then it must also control the price of that commodity in the market from which the commodity originates. The major seller must be the major buyer. Other buyers will just price against the major. This is what the Australian Wheat Board do: they set the tone for the market.

There needs to be some way of making sure that there is grower control in the day-to-day decision making process. It seems that the interests of growers and investors are impossible to reconcile and that ultimately the decision making processes will develop a bias in favour of the principal providers of the capital—namely, the B-class shareholders or investors.

No amount of refining or redrafting of the memorandum of the articles of association will provide an adequate solution to this conflict of interest as, at the end of the day, it is not possible to serve two masters. The opposition would prefer to see a different organisation. We would rather see a well structured corporation adopting modern cooperative principles which not only would have a better chance of surviving the single desk review process—which I would certainly support—but also would have better prospects of commercial success and of satisfying grower requirements in a deregulated market. In a deregulated market a cooperative wheat exporting enterprise could be sustained by reason of the strong grower loyalty that could evolve out of grower ownership and control. The member for Burke emphasised the opposition's position on this.

I think the amendment to stand aside this legislation for one year so that we can look at this and so that the growers can chat more through the Internet, in meetings and by coming together to workshop this issue is a fine amendment. Everything aside, I think it should be taken on board. The government should take on board what the honourable member for O'Connor said. I think he was very sincere in what he said. He represents a considerable number of wheat growers. Twelve months deferral of this bill would not really be of concern. That is what is really needed at this time. I support the bill being deferred and will certainly do that when it comes to the vote. I ask the government to extend the existing WIF credit guarantees for a further 12 months, as has been suggested in my colleague's amendment. I am sure the many people on the other side of the House who have considered this would like to support the amendment when it comes to the vote.