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Wednesday, 4 June 2008
Page: 4396


Mr COULTON (9:55 AM) —I rise to oppose the Wheat Export Marketing Bill 2008. For many in this House and this debate, last night and today, this has been an academic debate. But for me it is extremely personal. My family has been growing wheat since the 1800s. My brother is still farming on a property that has been held by our family since 1913. I personally helped plant my first wheat crop when I was 10 years old and I have been involved in the industry ever since. Last year and the year before, when the wheat farmers became the sacrificial lambs of the 2007 federal election over the Cole inquiry, I was sitting on a tractor trying to grow a crop. I represent an electorate that has just under 3,000 wheat growers, and I would suggest that they are possibly the most advanced wheat growers in the most productive area for wheat in the world.

As children growing up, when we would ask my father for a bedtime story, the scariest bedtime story that he could ever come up with, that absolutely scared the pants off us, was about his earlier days in the late 1930s when he was kicking off. He was trying to pay off a farm by shearing off-farm and trying to grow a crop, only to find that he was at the mercy of unscrupulous grain traders. He was a great supporter of Don Barwick and the crew that set up the Australian Wheat Board. Until the day he died earlier this year he was a great proponent of orderly wheat marketing. We have to understand that we have moved on. In the 1930s, when my father was trying to market wheat, he had a party line and virtually no access to the outside world. The farmers in my area are very much in tune with world markets. Thanks to the previous government they now have broadband connections. Last year when I was harvesting my crop I was marketing it on a mobile phone while I was still on the header. Farmers are now using marketing tools like forward selling and whatnot.

While you might think that in an area like that they might be considered free traders, and many do, there are just a couple of things I would like to highlight to the House that I think have slewed the argument. One of them is that for the last seven or eight years we have not produced a large wheat crop in Australia. Many of the farmers that have been fortunate enough to grow a crop—and they have grown a crop because they are at the cutting edge of technology—have largely been able to market it domestically. Some of the farmers in my area have exported in containers and have found markets right across the world, boutique markets, for grain. There is one thing that does concern them—and this is pretty well universal, although the member for Brand spoke about a generation gap. I have been meeting with wheat farmers right throughout the electorate since I became elected, to try to gauge their feelings. Even the most innovative marketers and the younger farmers are terribly concerned about what is happening. The logistics involved in what this bill would bring in—and there is talk of multiple sellers in an international market—is just not possible when you are talking about large volumes of wheat.

The money in wheat is the knowledge of where that wheat is and the specifications of that wheat. If you are Fred Nerk, grain trader from Gunnedah, and you are loading a ship of 50,000 tonnes out of Newcastle, you cannot just find 50,000 tonnes and get it to Newcastle. Logistically that does not happen. You have to source wheat from a large area and you need trains to get it there. Exporting wheat, by the logistic nature of it, is a job for a large company.

The concern is that in New South Wales GrainCorp presently control most of the up-country storage. They control the terminals, and there is a fair indication that they are going to have an interest in the grain trains that are running. At the moment Cargill owns a percentage of GrainCorp and there is nothing to stop that increasing. My growers are terribly concerned that we are going to hand over the Australian wheat handling system and, by default, the marketing system to an overseas company. In the last 12 months the farmers have become very aware of the dangers. What happens when fertiliser becomes the domain of one company? Fertiliser prices have gone up by 100 per cent this year purely due to the predatory nature of a monopoly and the indication that there might be solid prices for grain. Farmers have been paying through the neck for fertiliser and many of them still have not had planting rain. So they are well aware of what happens when a monopoly takes control.

My farmers are forward thinking; they are not looking to the past—we have to move on. But the problem is that what is on offer is not going to help them; it is going to be detrimental. In 1991, the member for New England was a member of a selection panel that chose me to go to America on a Rotary group study exchange. He did not know I was a National then—his ingrained hatred of the National Party had not been honed to the fine point it has today! During that trip I spent two weeks as the guest of an American grain company, Continental Grain. I started in Chicago and spent time on the floor of the Chicago Board of Trade. I went to Memphis and spent a couple of days with grain buyers on the Mississippi, and then I finished up at their terminal in New Orleans. That terminal exported 17 million tonnes of grain—one American company; 17 million tonnes. That is not that different from an average Australian wheat crop. Certainly, that is what we would hope to grow on the eastern side in a good year.

That system was not set up to help the American farmers. They had barges and were relying on the Mississippi. They were taking 36,000 tonnes on one barge with a crew of three, and the only time they had to start the motor was to slow down to go around corners and negotiate bridges. They could put that grain on a ship in New Orleans and send it to anywhere in the world. One of the people with me was a grain buyer at the time. He worked out that he could buy grain in Illinois, float it down the Mississippi, put it on a ship and send it to Sydney for about the same freight charge as you would pay from Moree to Newcastle. So the idea that, if you are a farmer and you have 10,000 tonnes of wheat you are a world player, is just not right.

You have to understand that the Australian wheat industry has some great advantages. The disadvantages are that we are on the opposite side of the world to most of our markets, so we have enormous freight charges, and we have a variable climate. Our advantages are that we grow extremely high-quality wheat and we have managed to open up markets in the Middle East and other places through very innovative work, mainly by the AWB, with the construction of flour mills and port facilities. Australian farmers, by backing the AWB in previous times, have managed to set up this world market. You have to understand that not only was Australia a single desk seller; a lot of our customers are single desk buyers. They will only deal with a single desk representative of Australia. There has been no indication as to how that is going to be overcome by the new legislation.

I am pleased that the minister has attended the House for this entire debate, but I am disappointed that we have not been able to come up with a more workable solution. There is a bit of good news this week in my electorate—we have had up to 40 millilitres of rain and there are massive plantings going on now. My electorate covers areas like Walgett, Coonamble, Moree, Croppa Creek, North Star and Weemelah, which are massive wheat areas. If we pull off a large crop there is great concern that, come December, we are going to have large piles of wheat under canvas at Walgett, Coonamble and places like that with no organised marketing structure to meet the world market. Then we will be at the mercy of the international grain traders.

I strongly oppose this bill and hope that the minister could at least reconsider his position.