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Monday, 16 June 2008
Page: 2135


Senator ELLISON (9:40 PM) —The incorporated speech read as follows—

Mr President, as a Senator representing Western Australia which is a major producer and exporter of wheat, I believe that the wheat market should have the opportunity as much as is possible to export wheat to whomever it wants. This is an issue in which I have a close involvement over the last 18 months. In the WA Division of the Liberal Party, we have long felt that West Australians did not have the opportunities that we could otherwise have were it not for the single desk.

There is no doubt that there has been considerable debate over the preferred wheat marketing arrangements between individual wheat growers.

Last year, the Coalition, whilst in government, set in train the first steps to reforming the wheat export arrangements in Australia. As the current arrangements expire at the end of June this year, there will be further uncertainty among wheat growers, grain merchants and financiers if these Bills are not passed. It was made clear during the hearings of the Senate Committee on Rural and Regional Affairs and Transport that all parties involved in the industry want certainty and that the industry is at a critical juncture without the marketing arrangements for the coming harvests and beyond.

It appears that the industry has accepted, admittedly unwillingly from some parties, that a multi-licensing system in some form will be introduced. It is clear that there is now no going back to the single desk marketing system.

If the new arrangements were to be rejected prior to the changeover on 1 July 2008, wheat growers would be left high and dry. Consequently, the proposed Bills should be supported with a number of amendments. These amendments arise from the Senate Committee which conducted a comprehensive inquiry into these Bills.

Objectives

Firstly, support needs to be provided for the inclusion of the overall objectives of the Bill. These were explained in the Senate Committee Report in brief. While the proposed objectives recognise the provision of choice improved by increased competition, transparency and security for wheat growers, the role of the regulator does not need to be specified in the overall objectives. This should be dealt within Part 5 Division 1, where there establishment of Wheat Exports Australia and its functions, powers and liabilities are defined. This is a much better place for dealing with the regulator.

Accreditation Eligibility

It is clear that the accreditation needs to provide additional choice for growers in the marketing of their wheat. It is imperative that as many participants enter the market as possible, as it is in the best interests of wheat growers to have many buyers competing for their wheat. More competition generally provides for a higher price at the farm gate.

It was therefore suggested that wheat growers should be exempted from the Act if they wish to directly export their own wheat to a third party. I believe this is an inherently sensible idea and consequently strongly support and endorse this. Wheat growers who have the expertise to establish direct links with third parties deserve to be encouraged in their commercial endeavours rather than be subdued by red tape and have their hard earn profits taken by middle men. Regardless of their incorporative status, individual wheat growers should not need to be go through the full accreditation process in order to sell their own wheat directly to a third party.

This could be achieved through a provision in Part 2, Division 1. It would exempt an individual wheat grower where the individual wheat grower:

  • Provides a statutory declaration to the WEA stating that the wheat has been solely produced by the individual wheat grower;
  • Provides supporting documentation to the WEA evidencing the contract for export sale by the individual grower to a third party, including such information that is protected by commercial-in-confidence provisions; and
  • Complies with all applicable Australian quarantine and quality requirements as ordinarily apply to exported wheat.

Minimum Standard Trading Terms

During the hearings, there were a number of calls for minimum standard trading terms, to include a number of issues. Transparent and easy to understand information is important for growers. As such, there should be a number of industry standards to include truth in pricing and minimum standard payment schedules.

One recommendation of the Committee was the provision of transitional financial education and counselling should be provided through appropriate channels such as existing farmer organisations for three to four years. This could look into a number of areas including marketing and risk management and it would help existing producers readjust their business plans in their readjustments to the new market operating environment.

The Access Test

In a more competitive market environment, it is vital that there is non-discriminatory access to the bulk storage and handling facilities that are required for all market participants. This access has to apply to a number of issues including ‘up country’ storage facilities, port storage facilities, shipping stem, and information. A bulk handler, the Co-operative Bulk Handling, has a proposed Grain Express initiative which could both provide efficiency and choice.

All the non-bulk handling company potential market participants agreed that such access is necessary for the optimal operation of the proposed new wheat marketing system. Of course any such system needs safeguards against price fixing however this can be achieved.

The three bulk handling facilities are trying to find a solution to the issues associated with the supply chain for wheat growers and this is to be commended.

Information

It is important that there is timely and accurate information on the grain stocks in any area. I believe that reporting should not be just be daily, but also weekly and monthly, run by the ABS and/or ABARE. This disseminated information would:

  • Ensure that market participants can properly price their product and/or services, so growers can access this information;
  • Be gathered from sources including growers, exporters and end-users;
  • Identify forecast crop tonnage, actual crop tonnage, tonnage available for sale and tonnage exported.

Wheat Export Marketing (Repeal and Consequential Amendment) Bill 2008

On reading of the Bill, it does appear that the WEA will not be subject to FOI legislation. This is inappropriate and thus the Bill should be amended so that the WEA is subject to FOI legislation and enquiries.

Review of Legislation

Finally, I support the Committee recommendation that there is a review of the legislation in 2010 with the report to be tabled in Parliament by the Minister. These requirements must be enshrined in the legislation, with the Productivity Commission conducting this independent economic review, with an analysis based on the costs and benefits of the system.

These Bills continue the work done last year in reforming the wheat export arrangements in Australia. These Bills will also bring to wheat growers who export wheat a greater opportunity to get the best price for their wheat.