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Thursday, 29 November 2012
Page: 10229


Senator EGGLESTON (Western Australia) (13:23): I rise to speak on the Wheat Export Marketing Amendment Bill 2012, which is before the Senate today. I was one of those who worked with the former member for O'Connor, Wilson Tuckey, and the late Senator Judith Adams towards ending the single-desk marketing system. According to all accounts, deregulation has brought great benefits to the West Australian wheat growers, whose properties are generally larger than those in the eastern states and whose wheat is largely exported. The experience so far in WA has been that deregulation and open marketing has brought great financial benefits to WA growers.

According to the latest Australian Bureau of Statistics figures, the gross value of the Australian wheat crop during the period 2011-12 increased by seven per cent to $7.5 billion. In my home state of WA, again according to the ABS, the value of the wheat crop doubled to $2.8 billion in 2011-12 over the previous year. This period followed the abolition of the single-desk marketing operation in 2008 and surely demonstrates that the strong support by the WA farming organisations in WA for deregulation was proved to have been well worthwhile and in the interests of the Western Australian industry.

The single desk was a monopoly marketing body for wheat overseen by the Australian Wheat Board—AWB. By this process, returns from growers for the sale of wheat, both domestically and internationally, were pooled together on a national scale, the prices were averaged by the Australian Wheat Board and farmers were paid that average price for their wheat. As I mentioned, this covered both domestic and international sales until 1989, after which it focused exclusively on exports before being limited in scope again to bulk exports in its final year of operation.

However, over the years the winds of change for a different wheat marketing system gathered momentum. There was a National Competition Policy review of the Wheat Marketing Act in 1989 which ultimately found no clear benefit to Australian growers from the single-desk arrangements then in place for the export of wheat. Importantly, increasing dissatisfaction with the operation of the single desk mounted, especially in Western Australia. As I have said, farmers in WA have experienced improved financial returns since deregulation was introduced with the abolition of the single desk. Those improved financial returns have in fact been quite substantial. It is therefore unsurprising that WA growers have been very vocal in support of the Wheat Export Marketing Amendment Bill 2012, which, if passed, will complete wheat marketing deregulation following the process set out by the Productivity Commission in an orderly way, albeit with a slight delay from the recommendations of the Productivity Commission.

I acknowledge, as home to the largest grain producers, who are staunch supporters of deregulation, WA and its growers do stand to benefit most by the enactment of this legislation. While not always united in their views in the past, WA's largest and second-largest farm lobby groups, the WA Farmers Federation and the Pastoralists and Graziers Association of Western Australia, respectively, are now united in their support for the process which will lead to the full deregulation of wheat marketing that will follow the passage of this bill.

Farmers in WA have been pleased with the significant increase in sales and the broadening of the market which deregulation has brought so far. Similarly, the Co-operative Bulk Handling Group, one of Australia's leading grain bodies based in Western Australia, with more than 4,500 grain grower members, also supports this bill. Simply put, WA wheat growers not only are pleased with the deregulated environment in which they work now but also have overwhelmingly benefited from it and wish to see that situation maintained and continued.

I do recognise in saying that that some growers in the eastern states have a different view to those in WA about how wheat is marketed. This is a reflection of the fact that the circumstances and form of the wheat industry differ from state to state. While Western Australian farmers have large acreages and their wheat is mostly exported, by contrast most farms in the eastern states are smaller in acreage and the wheat is largely sold domestically.

I believe it is high time these differences in the form of the wheat industry across Australia were recognised and it was accepted that a 'one size fits all' approach to marketing wheat is just not appropriate. Because of these differences, I believe the growers in each state should have the right to decide their own marketing arrangements and should have local control over how that is done. In other words, I believe wheat marketing should be devolved to the states to organise and run. There are many precedents for this: in the past, the states had marketing boards for products such as eggs, potatoes, rice and so on. There is not a national iron ore or coal marketing board dictating to Western Australia or Queensland the terms and conditions under which iron ore and coal are marketed respectively. Instead, the sale of these commodities is left to the WA and Queensland governments to arrange themselves.

Similarly, I do not believe that the federal government should have an overall role in legislating for the marketing of wheat given the differences between the states, and the facts are that most wheat produced, as I said already, in the eastern states is sold on the domestic market whereas the grain produced in WA is exported to world markets. As I have also said, this legislation will enable the completion of the process of deregulation of wheat marketing by following the steps recommended by the Productivity Commission, albeit with a slightly delayed time frame of about a year for each of the steps.

Australia is a large island continent, and, as I have said, it has to be acknowledged that there are significant differences across the country and one size does not fit all. This legislation embodies the preferred outcome of the majority of the WA wheat industry participants, as expressed by the WA Farmers Federation, the Pastoralists and Graziers Association and Cooperative Bulk Handling. In addition, the WA Liberal Party has supported this legislation and has been consistent with its support for market deregulation. As a Liberal senator for Western Australia, I support the objectives of this legislation.