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Wheat farmers consider the future of single d -

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(generated from captions) the end, Australia will benefit

the end, Australia will benefit from having had that debate as we move Matt Peacock with that report. The Cole Inquiry into the AWB wheat scandal has provided its own form of shock and awe, but until this week it hadn't had any adverse impact on wheat farmers themselves. But the Iraqi trade ban on wheat supplied by AWB, ending the outcome of the Cole Inquiry, has put a question mark over one of Australia's biggest wheat export markets, many worth hundreds of millions of dollars. It also presents a dilemma for an industry which has traditionally supported AWB's monopoly position in wheat exports,

the so-called 'single desk'. The extraordinary developments over the past few weeks have forced farmers to re-examine the benefits of one of the last of Australia's export monopolies. Peter McCutcheon reports. Late summer on Queensland's Darling Downs is a time when farmers are usually talking about the sorghum harvest. But lately the buzz has been about a crop that isn't even in season. There's growing anger and confusion about the state of Australia's wheat industry. We're under siege by our international competitors, our international customers obviously are starting to scratch their heads. We're starting to see out of the Cole Inquiry that it's actually coming back to the farm gate and it's affecting all of us now. I declare that the 47th annual general meeting of Grain Growers Association open. Representatives of thousands of wheat farmers from the three Eastern States met in the Darling Downs township of Dalby this week as the AWB scandal over kickbacks to Saddam Hussein's regime continued to escalate. Our members are disturbed, I guess, and confused. No-one really knows how things are going to play out. Growers had a lot of trust in AWB. They had a lot of comfort in the system and the system has failed them. The Cole Inquiry took on a new significance for wheat farmers this week, with the announcement that Australian wheat would be locked out of Iraq, at least until the inquiry runs its course.

This is probably the worst news that the Australian wheat grower has received so far. Victorian wheat farmer Andy Delahunty acknowledges there are other international markets, but he's worried Australian wheat will have to be sold for a lower price. Who do you blame for all this? I blame the AWB International. I mean, they're in control of all the contracts and they do the deals and to go and corrupt the Australian Wheat Board Growers' name overseas. I mean, they've got to be held accountable for this and it's really disappointing. To the average person it's a despicable way of doing business,

but that's the way business is done in many of these countries. Some farmers like Queensland grain grower Laurie Black see other villains in the piece. There's a lot of politics involved in this and I think that it's a very unfortunate and unfair thing that's been done and probably encouraged by outside influence. You mean the US farm lobby? Absolutely. They've been quite outspoken about - they hate our single desk. They think it gives us an advantage, an unfair advantage

and disadvantages them and they say that all the time. The single desk is an arrangement by which nearly all Australian wheat exports are required by law to go through one company - AWB Limited. The theory is that this stops Australian companies undercutting one another,

ensuring a better price on the international market. Certainly our membership is very supportive of the retention of a single desk and that's basically where our policy position is. A grain market power back towards growers. Chairman of the Grain Growers Association Dan Mangelsdorf doesn't want the single desk to be a casual of the AWB scandal. We've always maintained that there's two issues here. There's the single desk on the one hand and the management of the single desk on the other hand. Nevertheless a small but significant breakaway group of wheat farmers wants a more radical approach. There's lots of economic argument out there to suggest that the single desk is not providing any value to growers. Chris Kellock is a spokesman for a group calling itself Eastern Wheat Farmers. I think it's extremely important going forward for the future of the wheat export industry

that it has a number of players that are best able - and with their reputation intact - to market our wheat. It's a view that's not all that popular with many delegates to the Grain Growers Association, for whom the single desk is almost an article of faith. But support for the single desk does not mean support for the AWB. Farmers have been complaining for a number of years about service charges to AWB Limited and its subsidiary, AWB International. The Australian wheat grower is 80% in support of the single desk, which means that when someone wants to buy Australian wheat

they've got one face, and one person to contact. And I agree that's a fantastic system. But it's just when all the charges between the two companies start effecting me at my farm gate, that I get concerned. So your problem is not so much with the problem of a single desk, but how it was being run? Absolutely. And the news yesterday that AWB may be prepared to forego its monopoly on a temporary basis is seen by many as a step in the right direction. Any monopoly becomes power drunk and they make the rules and it's like the power of veto of export. If they hadn't have had that power of veto and had allowed some exports of grain, which I think were appropriate to occur, then we wouldn't be as big a mess as we are today. These are confusing times for grain farmers caught up in the legal and political mess of the AWB scandal. And although there is disagreement over what is the best export model for Australian wheat, nearly all growers agree the present system has some serious flaws.

The problem I have with the Cole Inquiry, it could go on for months,

I guess and we can't be out of a market for that long. We can't afford to be locked out of markets around the world. We need all the markets we can get.

That report from Peter McCutcheon.