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Monday, 16 June 2008
Page: 2135


Senator BOSWELL (8:10 PM) —Today the Wheat Growers Action Group and the New South Wales Farmers Association rallied outside these chambers. They were protesting about the Wheat Export Marketing Bill 2008 and related bill before us. They know that the major parties have signed off on deregulation of the wheat export market. And they know that only the Nationals stand with them in opposing the deregulation that will see profits from wheat growing move away from the family farmer to the shareholders of major international buyers. They knew what was happening, yet still the wheat growers came. They were in the gallery this afternoon. They came to see their representatives in this parliament change their lives forever. When the Senate divides on the Wheat Export Marketing Bill, wheat marketing in this country will be changed forever. They know that the Nationals in government negotiated a single desk for them but, with Labor in power, all that has come to nothing. The previous PM committed to a single desk.

For some senators, this is a debate about Cole and the war in Iraq—I think that is where the Democrats and the Greens are coming from—and, for others, it is about market principles. But, for the wheat growers and for the Nationals, this debate is about what to do when the market has no principles, when overseas countries subsidise wheat growers and corrupt the world market and when major multinational corporations play growers off against each other and inevitably deliver lower returns to growers. The only factor that should weigh on senators’ minds tonight when they consider their vote is the Australian wheat grower. They have a right to say how their product should be marketed. They have a right to be listened to. They have every right to protest when this does not happen. I went around to all the rallies in Queensland. I can honestly say that I could count on the fingers of one hand the number of people who wanted deregulation. Perhaps they were not game to go to the rallies or perhaps they were there and were too scared to speak up, because the overwhelming majority—I would say it is 85 per cent—of Queenslanders want a single desk.

What we had outside this place today was a large group that represents the majority of Australian wheat growers. By far the single-deskers were in the majority. I would put it up as high as 85 per cent. They have spoken. They have told us, the legislators, what they need to survive and keep their industry strong. They want the single desk for export wheat to remain. It is, in the end, as simple as that. They have talked to committees and ministers and to spokespeople and the media. They have talked to MPs and senators. But the bill before us is not about listening; it is about turning away from growers and their working families. I stress ‘working families’ because, when you are on a farm—and Senator Joyce is probably the only legitimate wheat grower in this Senate that I know of—


Senator Adams —I am sorry?


Senator BOSWELL —I am sorry. Senator Adams is a wheat grower; I forgot about that. But Senator Joyce does represent wheat growers. We are not listening to wheat growers, because we think we know better than they do how their industry should be run. There was a perception that Western Australia wanted to abandon the single desk, and it was Western Australia that was leading this debate. The majority of farmers in Western Australia are absolutely terrified of this because they export the majority of Australia’s export wheat. And that is where it is going to hurt—in the export industry.

This legislation is about selective listening to a minority of growers and taking no notice whatever of what the majority of growers want. This legislation is about listening to what our trade competitors want and then giving it to them—serving up Australian wheat growers on a platter so that American interests will take over our traditional markets. I hope that senators are very conscious of the burden they take on today if they support this legislation. When they read in the papers that wheat growers have left the industry due to poor returns and high market volatility, senators must remember their vote. When they read of credit crunches in the wheat sector, when they read obituaries of the family farm, when they read of previously healthy wheat communities becoming unviable and putting out their hands for assistance—senators must remember that their combined vote led to that.

Already we have reports confirming what the wheat growers have been saying would happen. Two prominent market analysts have stated that the drop in pool participation will lead to much lower advances and a rise in cash sales. Grains market analyst Brett Stevenson says that smaller companies not able to loan against exclusive rights to all bulk wheat exports, like AWB could under the old system, would be less likely to be able to pay pool advances without having sold the grain prior, so pool advances would become smaller. He said:

With the old pool structures, the standard advance was 80 per cent of the estimated return … now I would suggest it will be closer to 50 per cent ...

I hope he is right about that, because I believe it could go much lower. Mr Stevenson says that many growers will be tempted to sell for cash rather than get a low advance and expose themselves to the risk of pool returns dropping. Malcolm Bartholomeus says that growers will not be fully protected, because grain buyers who are not exporters will not have to get accredited. It does not really matter if you are a grain exporter and you do get accredited; the government is not prepared to stand behind you. I do not know what the purpose of the accreditation is. Anyone can rock up and the government will give them a tick. There does not seem to be any way of seeing whether they are financially stable, and so growers are being exposed to the risk of selling their grain to an entity which ultimately may fail commercially.

Many growers say they will not be able to afford to wait longer to be paid for their grain, as it can take more than a year to sell a large crop on the world market, particularly when we do get a bonzer crop, like we may this year. As a grain grower commented on the Land website:

There will be very few pools and why would there be when there will be heaps of unsold stocks of farmers’ grain at harvest time as the market looks after its immediate needs and withdraws.

Mr Stevenson said:

Under a National Pool the operator had a AAA-rating and could borrow money to fund Pool advances in US dollars at wholesale rates. Now we face reduced cash prices, reduced first advance and higher supply chain cost.

What the hell is this government doing to us? Rudd said the new system would not leave growers financially worse off. Once the Domestic market is filling up the prices will drop back as the harvest moves south as always.

When Mr Rudd went out and solicited votes from wheat growers, he said:

The Australian Labor Party has supported the single desk wheat marketing arrangements for over 65 years since 1939. During that period Labor has been a strong supporter of the current single desk marketing arrangements and it remains Labor policy that the single desk should remain in place while ever these arrangements have support from the growers and the community as well as delivering a benefit to Australian wheat growers.

There has been a change in the Prime Minister’s view. Another person commented on the Land website:

Under crippling financial pressure from 8 years of drought and 2 crop failures growers will be forced to sell or face storing unsold grain for a long time.

There are many farmers who do not have much on-farm storage. He continues:

Wake up Australia this will be the end of many family farms. We have to have a vote on this madness. We have to have a grower owned and controlled National Pool.

The WGAG chairman, Peter Cannon—who was here today—said that the new deregulated system also removes all associated benefits, like golden rewards and national pool freight rate advantages which hardworking growers rely on. He said that the legislation will see quality standards currently set by the national pool operator replaced by the National Agricultural Commodities Marketing Association, NACMA—standards that are set by traders, not by growers. Already NACMA is upsetting growers with proposed changes to quality standards, and wheat grades with a higher risk grain will be downgraded to a lower price than under the current national pool system.

Wheat growers claim that this legislation will see a sharp decline in annual wheat production in Australia, with serious implications for food security in Australia and vulnerable communities throughout the world. That only stands to reason. If you take the profit out of farming then farmers will not be there to supply food. I believe the wheat growers when they warn that this legislation threatens the livelihood of thousands of growers and removes the only advantage that Australian farmers have over heavily subsidised international competitors. This legislation will abolish the national pool and buyer of last resort, which has been an effective and orderly marketing system for the past 60 years.

I believe the growers when they say the new law favours big business and multinationals by granting them licence to export Australian wheat. Growers are worried the export companies will drive down prices as they compete against each other with Australian grain to secure overseas markets. I believe the growers who have grave concerns about the regional monopolies controlling the movement of wheat and the bulk-handling companies restricting growers’ access to up-country storage and port facilities.

The CWA also believes them. At its recent conference, the CWA called on the government to retain the present wheat marketing system for the 2008-09 cropping season. The WA Farmers Federation, that represent, I suppose, 90 per cent of the wheat growers in Australia also support the single desk. They have confirmed their support for the position taken by the Wheatgrowers Action Group.

At one stage, it seemed as though Kevin Rudd was listening to growers. As I quoted, he promised Australian wheat farmers that if Labor came to power, and if growers wanted the single desk, Labor would retain it. But the wizard of weasel words changed his tune after getting the keys to the Lodge. Kevin 07 curried favour with growers by telling them their single desk would stay. Kevin 08 gets rid of the single desk. How can anyone respect anything he says? No wonder the wheat growers feel cheated and angry. As a grower on the Agmates website commented:

How politicians that know nothing about grain production decide for us the future of our industry without adequate and proper consultation, thus putting the industry in a perilous situation is just inconceivable and ludicrous. They are leading us, like lambs to the slaughter, straight into the hands of multinationals, whose sole interests are profits and shareholders.

Another grower summarised the situation this way:

The vast majority of Australian wheat growers support the continuation of the orderly marketing of our bulk wheat exports with a single seller into world markets and national pools to minimise market risk, and maintain our excellent quality reputation. There appears to be no sound reason for dismantling the system which is the enemy of our competitors in the world market, and is our only counter to the huge government subsidies paid to growers in the USA and Europe.

I am committed to seeing that the voices of wheat growers are heard in this parliament. An executive member of the Wheatgrowers Action Group says:

We, the majority of wheat growers, are also very frustrated that our concerns are not being listened to, and we feel our democratic rights have been stripped away in favour of big business and their shareholders. After seven years of drought, two crop failures and input costs going through the roof—that is, fertiliser tripling in price within three years—government interference in our export wheat marketing system is the last straw.

Long-time wheat industry leader, Bob Iffla, describes the government’s action in the bill before us:

The government is breaking up the industry in a way that the Australian wheat grower will be hung out to dry. The bill represents the divide and conquer approach traders and our international competitors have been wanting for years. Wheat growers deserve better than what the government is proposing. The minister needs to ask himself why our competitors are so ecstatic over the proposed changes, and how he is going to prevent the takeover of the Australian wheat industry by foreign interests.

This bill is the catalyst for wholesale change to the growing, financing, transporting, storage and marketing of Australian wheat. Under the new system there will be increased pressure on port monopolies, as the system is not designed to cope with large short-term movements of grain. With the state governments’ failings with the freight rail system, most grain will have to be moved by road, which will be an impossible task, forcing increased storage and carrying costs at growers’ expense. Then the Greens and the Democrats want to talk about the environment. We are going to have an environmental nightmare with this grain pushed onto roads.

There is no financial security for growers at point of sale, or after. There is no receiver of last resort. This is necessary in a large production year, or back-to-back good harvests, and in years where quality is outside the normal receival standards. Blending grains to bring them up to a higher quality, and a better price for the growers cannot be done efficiently on a national scale without the national pool. Who handles and pays for the delays of shipments and delays because of customer complaints on quality?

Eastern and Western Australian grain ports are owned by a monopoly Australian operator. Ownership could fall into the hands of foreign interests with recent changes to GrainCorp. There is no risk GrainCorp will be a takeover target for Cargill or ConAgra—one of those; probably Cargill. In its essence there will be no sharing of risk across a national pool to share gains and diminish losses for the individuals. There will be extreme pressure to take marketing positions because of oil volatility, and the risk will now be taken by the individual farmer. Forward marketing and hedging was done by the national pool operator, which could spread the risk over all the Australian harvest. For the first time in 60 years there will be no body chartered to maximise returns to growers. We still do not know how the premiums for quality Australian wheat will be preserved. We do not know how multiple buyers will gain fair access to the storage, handling and shipping facilities which are, effectively, state based monopolies. Nor do we know how the ‘industry good’ benefits of the single-desk manager will be continued.

The core question remains unanswered in the legislation before us: how will a multitude of licensed exporters compete effectively against subsidised growers overseas, especially to single-desk buyers? Whatever the differences now between the coalition parties on wheat deregulation, the fact remains that, if the Rudd government had not won the election, we would not now be facing the dismantling of the single-desk export marketing system. Today is a terribly sad day for Australian agriculture, and wheat-growing families and communities. Let every senator cast their vote in the full knowledge of the consequences which I have outlined—as told to me by the growers. The Nationals are their voice. If only there were more of us.