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Tuesday, 30 October 2012
Page: 12634


Mr ADAMS (Lyons) (20:54): Thank you to the honourable member for Hume, who just spoke, who I work with on committees in this parliament. He is somebody who has a strong view about this. I see his honesty in where he has come from to reach his position on the Wheat Export Marketing Amendment Bill. This bill implements the Australian government's response to the Productivity Commission's review of wheat exporting marketing arrangements, which was also considered under the House of Representatives standing committee on Agriculture, Resources, Fisheries and Forestry.

In June this year that committee made a number of recommendations to be included in the bill. The Productivity Commission review was done early on because the coalition insisted that this clause be included in the Wheat Export Marketing Amendment Bill 2008. So there had to be a Productivity Commission review early in the process. The government had argued for this to be conducted at a later stage. The committee was aware that the current supply chain infrastructure is divided into regional monopolies developed through historical circumstances. However, delaying deregulation would not necessarily improve these trading conditions. Indeed, probably the entrance of new players into the market may be aided by deregulation and the abolition of accreditation.

In relation to market information, the committee agreed with the evidence that information relating to wheat stocks should be improved and freely available. A number of submissions and witnesses explained that wheat stock information currently available would be insufficient for a deregulated wheat market to function properly. I would have thought that industry would have wanted to make this information as freely available as possible. The committee, therefore, on this occasion recommended that the industry funded entity be developed to deliver services to the industry in the areas of quality, standards and stock information, and that the government consider appointing an industry funded grain industry ombudsman for a five-year period.

The industry should manage quality, and in fact the current laws reflect this situation. I would think that the customer would let you know what he wanted. If it was not up to the standard, the miller might say, 'I don't think it's what I want. You'd better give me what I want, otherwise I won't buy it off you.' The ombudsman, as we recommended, would be paid for by industry, by those that needed to use an ombudsman if there was a dispute. There are several models in Australia along these lines. Also, the committee recommended that the government support improving the sharing of wheat stock information and that this process might be initiated through using funds from the Wheat Industry Special Account.

The transition to a fully deregulated bulk wheat export market began on 1 July 2008 with the abolition of the single-desk wheat marketing arrangements. The decision to abolish the WEA was taken, of course, after consultation with all industry sectors, including development of the Wheat Export Marketing Amendment Act 2008 and the Productivity Commission review. There has been no task force dominated by large grain marketers. The Wheat Export Marketing Amendment Act 2008 established a scheme for regulating the export of bulk wheat where exporters of bulk wheat must be accredited under the Wheat Export Accreditation Scheme, called the scheme, administered by Wheat Exports Australia and primarily funded from the wheat export charge. The Productivity Commission report on its inquiry into the wheat export marketing arrangements was tabled in parliament on 28 October 2010. This bill will implement the commission's recommendations relating to the act, but under a staged approach to ensure that full benefits of the 2008 reforms are released. It will abolish the scheme and the WEC on 30 December 2012 and wind up the WEA on 31 December 2012. This will give the WEA time to complete outstanding tasks, such as the final annual report and the 2012-13 report for growers.

The requirement for providers of grain port terminal services to pass the access test as a condition for exporting bulk wheat will be retained until 30 September 2014. This is a bit of a contentious issue. The access test will then be abolished, on the condition that a non-prescribed voluntary industry code of conduct covering access to grain export terminals is in place. That code will apply so that people cannot use their monopoly position to take advantage of market situations. If such a code is approved, the market will move to full deregulation from 1 October 2014. All aspects of the industry will be subject to general competition law administered by the Australian Competition and Consumer Commission, the ACCC, and complemented by the code. If a code is not approved, the access test will continue.

The Code Development Committee is making good progress on port access issues. It is conscious of the need for a strong compliance mechanism, which will be a key element in the government's consideration of whether the code is of an acceptable standard. It has also reached in-principle agreement on the release of increased stocks information. It should be noted that not all growers want stocks information made public, particularly those in WA.

This bill will bring the bulk wheat export market into line with other agricultural commodity markets and promote further competition in the wheat industry, leading to increased productivity and profitability. It will mean that more buyers will be competing for wheat, helping growers to get prices that reflect market value. The bill is expected to drive further marketing innovation and improve the services that marketers provide to secure supplies of wheat. It is expected that the industry will also benefit from the removal of the costs associated with bulk wheat export market regulation.

This is obviously the future of the sale of wheat from Australia. We need to ask ourselves why this bill is necessary. People might remember the scandal in 2007, when the Australian Wheat Board was illegally selling wheat to the Middle East. An article in the Australian in November 2011 states:

Despite the national wheat marketing monopoly being disbanded in 2007 after an international scandal—

when bribes were paid—

… by its gun-toting farmer-directors to Saddam Hussein's regime in Iraq, the grains president of the WA Farmers Federation says he would welcome its return.

A grain farmer is quoted as saying:

We really had a good thing going for years - they did our hedging, marketing, exporting and pricing, and that left us farmers free to just concentrate on growing the very best crops we could.

That was marketing under some people's philosophy, no matter what its effect was on the public good, the nation's principles or what the nation was trying to achieve with the international community.

However, it was revealed in the same article that not all farmers are of the same mind. It says the 'hankering for the glory days of the wheat board monopoly, when it had sole rights to sell Australia's $6 billion a year wheat crop on the global markets' is not shared by some of the younger, progressive farmers, who believe in the merits of trading wheat independently. If you talk to some of them, they will certainly tell you that. The article points out that some of these younger farmers, who were 'privately selling grains such as barley, canola and lupins 15 years ago, long before the wheat board was abolished' enjoy 'the sense that after delivering harvested grain to nearby depots' they can optimise their returns by choices made later on their computer. So modern farmers are using modern technology in a modern world.

The Wheat Export Marketing Amendment Bill 2012 requires the ACCC to monitor continuous disclosure rules—contradicting Mr Cobb's statement that the eyes of the WEA will be gone. The ACCC will become the eyes to make sure that nothing wrong is occurring. It only demonstrates what a lack of leadership there is in the opposition on rural sector issues. There have been massive changes in the last few years. We should not be going back to the old Wheat Board days; we should be looking forward. But that is not occurring in this parliament. We are looking at old ways and going backwards instead of forwards with that sort of leadership in rural Australia. It is disappointing for young people like the member for Wannon over on other side. I know his concern about what is occurring in his own party room. I know that he wants to have a free marketing process because that is the way forward.

I think the miller of wheat should decide whether the wheat quality meets their needs, whether it is to make noodles, pastry, Weet-Bix, flat bread or high loaves. The industry needs to work this matter out. Along with the changes that this bill assists, we should have a website to highlight what wheat is available to sell. The industry should be able to work those things out in a modern way, as do many other industries in today's world. The wheat available would be there on the website for people to see. I do not see what could make people think that you could not modernise this industry. This could give a better indication to farmers as to what wheat to grow, helping them to choose by seeing what people want to buy. If the quality is there and it meets the needs of the millers, there are more opportunities to look for new uses and new products.

As with many other agricultural products, there needs to be research and development in this industry so that a strong future can be mapped out for wheat and other cereals. We need to be on top of the health issues in terms of the effect of food products, especially in assisting allergies by developing alternatives.

Why are the opposition trying to make it harder to market Australian wheat? We need to ensure that we can always be on the cutting edge: looking for new markets, taking on changes, considering the latest in research and looking for other cereals that can complement what we already grow.

So this bill will complement the many changes and innovations being made in the agricultural industry generally by this government—not with the opposition. I think it is important to allow competition to be part of the process, which means we can be in front of Europe and the United States in opening up our markets to new ideas and new technology without being at the behest and control of the some of the subsidies operating around the world.

I have seen that wheat grain exports in August this year totalled 2.2 million tonnes, or 59 per cent more than in August last year. I know that we have had a good year but I think it is happening—we seem to be out there selling more wheat and servicing more markets and more customers within each market. It seems to be happening; since the wheat board has gone we have diversified where we are selling wheat. We are selling more wheat, therefore our producers will need to grow more wheat and we will need to know what we need.

The discerning Asian market has grown. Here is the opportunity. We have been talking about the Asian century and the opportunity to sell grain. I was in Korea with the trade committee not long ago. I was in a bakery where the guy wanted to buy organic wheat from Australia because he only sells organic products. It is a very modern bakery which has a French sort of theme selling lots and lots of pastries. So I think the opportunities are there but we have to be able to capture them, and we should be able to capture the new markets. I support the bill.