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Tuesday, 3 June 2008
Page: 4286


Ms LEY (11:30 PM) —Everyone interested in this debate on the Wheat Export Marketing Bill 2008 and the Wheat Export Marketing (Repeal and Consequential Amendments) Bill 2008 should read the conclusions and recommendations of the Senate Standing Committee on Rural and Regional Affairs and Transport at chapter 4 of their report on the bills. My position on this legislation comes from my representation of wheat growers in the electorate of Farrer, but it is also strongly reflective of the committee’s conclusions. In speaking about my electorate and the views of the wheat growers I represent, I think it is fair to say that many who were once passionate supporters of the single desk are now ambivalent about the rationale for its existence. Many farmers have accepted that the days of the single desk are over. Some are impatient for the new arrangements to begin, believing that a contestable and competitive market gives them the best opportunity to realise the maximum return for their wheat.

Many farmers have moved away from the wheat-marketing models of the past. However, many have not. The group of farmers that passionately support single-desk marketing arrangements for wheat are facing a difficult time. I accept that they hold their views with great conviction and they fear for the future of their family businesses, for their livelihoods and indeed for the very fabric of their rural communities. In meeting and speaking with them and reading their letters and emails, I am touched by their passion, which is in no way ordinary. We should treat their views with dignity and respect. Unfortunately, I cannot agree with those views. I cannot agree to requests from constituents that I support the restoration of single-desk wheat-marketing arrangements. I do not agree that such a restoration would be in the interests of Australian wheat growers, even if it were possible. I am sorry that in this instance I am unable to support the views of a section of my constituency held honestly and with conviction.

My own views, held with equal honesty and conviction, are that the best interests of wheat growers for the future lie in implementing the arrangements contained in this legislation. The Leader of the Opposition went over the time line of wheat-marketing arrangements, and I think that history very well demonstrated that over the course of the last 20 or so years there have been gradual changes to the way both domestic and export wheat are marketed. The current legislation represents a logical and sane progression through a succession of inquiries, responses and restructures as well as legislative and administrative changes, which brings us to the present situation—seeing the final dismantling of the single desk for export wheat.

AWB, for so long the operators of the single desk, appear to me to have completely lost interest in continuing with it. Their evidence to the Senate committee proved this when they said:

The reality is that Australia’s wheat export marketing arrangements have fundamentally changed over the last 18 months and there is no longer a single desk in place.

I would like to just touch on a couple of arguments put forward by supporters of the single desk. Concern has been expressed about multiple sellers competing against each other for a fixed share of the international market. I disagree. In a more competitive market, buyers will drive up the price. Multiple buyers will compete with each other to get sellers to deal with them. Although there can be no national pool under the proposed arrangement, there will still be regional pools. The current AWB pool is a series of pools that open and close in response to world grain prices. I expect reform and innovation to happen in the area of pools, allowing growers to commit early if that is what they want, with a relatively small wash-out price. In fact, AWB has already announced it will offer pools for the forthcoming harvest and has said that harvest loans, payments, regular pool distributions and incentives—in fact, all of the selling and financial features growers are familiar with—will be in place for the upcoming harvest. Banks have announced that properly accredited and licensed marketers will not mean less security of finance for farmers, who will have access to finance under the new arrangement.

There is every indication the grains industry is getting ready for the future in terms of the formation of market alliances and cooperatives that allow members to take greater control of the sale of their wheat. The ‘buyer of last resort’ argument is often made, but what does that really mean? In practice, there is no buyer of last resort because, although the Wheat Marketing Act says that the holder of the export licence must receive all grain presented to the exporter, the exporter does not have to accept it—and there is evidence to the Senate inquiry demonstrating that.

We need this legislation to pass so we can all get on with life in the wheat industry. I have listened to a great deal about this issue over the last few years. Increasingly, I find the arguments for a single desk in today’s world do not pass the common-sense test, evoking a strong emotional attachment but not much more. I am not convinced, and never have been, that AWB delivered the best returns to farmers. A number of studies have demonstrated this. Competition through the supply chain must drive benefits, particularly as a number of different marketers will be competing for wheat. AWB did not have to be an aggressive seeker of the best price in the market because they already had ownership of the wheat. In a more deregulated market, exporters will have to be aggressive in getting the best price so they can accumulate grain against the competition. Multiple sellers will compete with each other to provide the best possible service to customers, and this competition to provide the best possible service from the local grower to the overseas consumer should produce a price premium for growers.

Farmers need representative bodies that sit down at the table with key industry and government stakeholders and decide how to make the new set of arrangements work as much as possible in their own interest. The government has provided significant sums of money to carry out the industry good functions, technical support and education. I urge our farmers and their representatives to grab this opportunity with both hands, secure your share of this money and have your say about the future of the wheat industry, which I know is very bright.

Wheat farmers should not be any different from cattle farmers, horticulturalists, wool and lamb producers or indeed producers of other grains, such as barley and canola. They all operate in corrupt world markets, and returns from all would be higher if we did not have the subsidies and tariffs of our European and American competitors. But having a single desk for selling wheat will not militate against these subsidies and tariffs.

It has been argued that changes to the wheat market will disadvantage small family farmers. I believe exactly the opposite is true. In fact, I was approached by a farm adviser who explained how his clients, having made their domestic arrangements to sell wheat on a regular, possibly handshake, basis year after year were suddenly told not to send their wheat. AWB had gazumped their sale to fill a domestic contract of its own.

There are opportunities for small family farmers in this legislation. Remember the biggest export from Australia at the moment is empty containers. Not everyone will want to make their own arrangements, but nothing in this legislation prevents those who want to use pools from using pools and delivering to the same receival point they always have. The grain handlers have announced they will provide a service which essentially aggregates a crop, probably on a geographic basis, and keeps the supply line from farm to port working well and operating to capacity.

The Leader of the Opposition has foreshadowed amendments we will move in the Senate, and I seek those. Much has been made of supposed levels of support for the single desk of 80 per cent. I assume this comes from the survey from the member for New England, but I do not believe that a survey that represents 10.8 per cent of the total number of wheat growers can be used to prove this point. I submit that this legislation does act in the interests of wheat growers and a strong, competitive and secure domestic wheat industry.