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Wheat industry likely to lose single desk.



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PM

 

Wednesday 30 April 2008

Wheat industry likely to lose single desk

 

MARK COLVIN: After nearly 70 years it now seems certain that wheat growers around the country will lose the single desk wheat marketing system. 

 

The single desk has meant that one exporter - AWB Limited - has had the sole right of exporting Australian wheat overseas. 

 

But after the Cole inquiry into AWB and the kickbacks it paid to Saddam Hussein's regime, there were calls for the monopoly to be removed. 

 

Late this afternoon a Senate inquiry handed down its report and it recommended that the single desk be scrapped.  

 

Brigid Glanville reports.  

 

BRIGID GLANVILLE: Since 1939 only one company has been allowed to export wheat overseas - AWB, the former Australian wheat board. 

 

But since the Cole inquiry, AWB Limited was stripped of that power and now the market is officially open to other exporters. A Senate inquiry into what's known as the single desk has recommended it be removed. 

 

John Begg is the secretary of the Australian Wheat Growers Association. 

 

JOHN BEGG: Well we are indeed pleased. We have been campaigning for a long time for the introduction of contestable marketing and if the legislation is removed then it will provide growers with a choice of the buyer to whom they wish to sell. It will provide them with competition from many buyers and it will provide them with security through an accreditation system. 

 

BRIGID GLANVILLE: Wheat growers have argued about the single desk for years. Some say it protects them in an international market and guarantees them a good price. Others say it prevents competition. 

 

Senator Barnaby Joyce is disappointed with the decision. 

 

BARNABY JOYCE: Well unfortunately the Senate inquiry has recommended that the single desk, Australia's major and most successful marketing arrangement for one of our major national exports and our major rural exports, be removed.  

 

And now we'll have the ridiculous position of Australian wheat competing against Australian wheat overseas in areas where there are single desk buyers. We'll have given a free kick in front of the post to regional monopolies who will now open up and have the capacity to control wheat from its receival to its transport to its export to the export sale. 

 

BRIGID GLANVILLE: The National Party says the majority of wheat growers around Australia support a single desk, but other grain traders disagree.  

 

Companies such as CBH in Perth argue the single desk has prevented them from getting the best price for growers, but Barnaby Joyce says removing the single desk won't let smaller companies in as the larger ones rule the market. 

 

BARNABY JOYCE: This just plays straight into the hands of regional monopolies and we see that already I think GrainCorp have come and said that their share price would go right up. Well they've got that one right. I mean their share price should go through the roof.  

 

And CPH in the west, well, they've already had a vote where they've got about 60 per cent of the cooperative members wanting to corporatise. When they corporatise, they'll be looking after their shareholders, not the growers. 

 

BRIGID GLANVILLE: For many years AWB has had the monopoly and some of these companies would argue that they're just now allowed to get into the market and make some money. 

 

BARNABY JOYCE: If that's the case, then two wrongs certainly don't make a right. And removing one monopoly and replacing it with three, if that argument stands, is hardly a solution to any problem. 

 

BRIGID GLANVILLE: The Senate committee has recommended education and counselling be provided to growers. 

 

AWB said it was unavailable to comment this afternoon. Its executives are still reading the report. 

 

MARK COLVIN: Brigid Glanville.