Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

It gives me pleasure to rise to speak to the Wheat Export Marketing Amendment Bill 2012 and the consequent amendment. To cut to the chase, the amendment is to defer the winding up of the WEA, the Wheat Export Authority, until some other measures are taken within the reform and deregulation of the Australian wheat export industry.

I must say that farmers generally—not all of them, but generally—have welcomed the deregulation of the wheat industry, and younger farmers in particular are participating very strongly in what is now a fully deregulated market. There are around 40 exporters out of Australia now, and those who would suggest that there are still some constraints on the operations of those companies or their ability to set up business in the first place are not being strictly truthful.

This debate is not so much about wheat at all; it has now moved on and is about the grain handling chain and the path to export for all grains—not just wheat. In fact, we have reached a situation where what were government-protected and grow-our-own monopolies in the handling and port system of Australia have largely moved into other hands and are presenting impediments in the marketplace for some of these other operators to work within. The coalition is urging the government to show a little bit of caution and hold back on winding up the WEA until we fix up some of these problems that are still within the industry.

The WEA was established primarily to approve new companies into the export market, and it has done so quite well indeed. In fact, I agree that it is doing very little at the moment; it is collecting a levy of 22c a tonne from growers. It is right to ask the question: why not shut it down? What is it doing? The problem is these issues of unfinished business. I am still involved in the wheat industry—I own a farm—and at the moment wheat is worth somewhere between $200 and $300 a tonne on average, and yet it is costing growers up to $90 a tonne to get it onto a ship and into that export market. So growers are intensely interested in the cost in the path to market for their products. It is interesting to note—and we are fully aware of this—that there is a somewhat different opinion in Western Australia to the rest of Australia. It is worth, in the House's interest, pursuing why that is the case. At around the time that the single desk in Australia was wound up, the community owned assets built up by farmers under government regulations and government protection for many years and those assets were passed into corporatised bodies, and for most of Australia from there into privately owned institutions. In Western Australia the primary bulk handling company is still owned by the growers. In the rest of Australia those companies are owned by independent companies, and that is why we have a different opinion in the West from the rest of Australia on this issue—bearing in mind that I believe that sometime in the future there will be a push to corporatise CBH Western Australia and in the future the temptation to realise those assets could be as strong in Western Australia as it was for the rest of Australia, so Western Australia too will face the same issues, some of which are apparent at the moment.

One of the biggest bones of contention for those people operating in the export market is that the three regional monopolies control the market information. If as a grower I deliver grain to the local silo system and I have unsold product, I know where the unsold product is and the body that receives the grain knows where it is—in this case, these three regional monopolies. The three regional monopolies also operate marketing arms. In the case of most of Australia those marketing arms know exactly where those pools of grain are and other marketers do not. They have privileged information and this is the biggest issue the industry is grappling with at the moment. For instance, I come from the Eyre Peninsula region of South Australia which is entirely an export market. To get grain off the peninsula I need to engage a bulk carrier to move a load of about 40,000 tonnes. That bulk carrier needs to dock at the Viterra site which is a regional monopoly in Port Lincoln, and my grain must be delivered at some stage into the system. Whether or not I have sold to a different buyer becomes academic, because at some stage the grain has to enter the system. That means that buyers in the market have to be certain when they book shipping space, sometimes some months in advance, that they can fill the ship. If they have committed to the shipping program and later find they can only accumulate 15,000 tonnes or 10,000 tonnes then they are left with an unfilled order. They do not have the information to know where to go to accumulate extra tonnage, but their competitors do. Those that control the bulk handling system do have that information, so this is a very serious issue for the industry.

It is true that the Wheat Export Authority in their current form cannot fix this. They do not have the authority to fix it, but they are in an ideal position to become the authority that can fix it. When we talk about an unregulated market, which is basically what we have, we can throw our mind to the operations of other markets—the financial services sector, the banking sector, the superannuation sector. Sure, we have free and open competition, but we do not have it without any rules at all. In this case, we are asking for the other companies to have access to that market information so they can accumulate their tonnage, they can go to farmers and offer them prices on the same basis as their competitors. Talking about the marketing information that the bulk handlers hold, the WEA in their submission to the Senate inquiry into the operational issues in the grain export networks said:

This results in a significant marketing advantage to the associated accredited exporter of the bulk handling company. The committee will note a number of public submissions presented to this enquiry state that the retention of stock and quality information by the bulk handling companies creates market asymmetry, providing them unfair advantage in marketing and trading of grain and reduces effective competition in the market.

Surely all sides of politics agree that we want open and fair and vigorous competition in the marketplace. For the bulk handling companies to make the assertion that it is not in the growers' interest to have this information in the marketplace I find very difficult to comprehend. It does not matter what you are selling—if it is real estate, cars, washing machines or even Tim Tams—you want the world to know that you have some Tim Tams, washing machines, cars or real estate to sell. You do not want to keep it a secret, but at the moment that is the case. That information is held tightly by one company. You can understand why growers are frustrated about this.

We have an opportunity, before the WEA is finally wound up, to give it some new instructions and say we need to get this cleared up before we remove the last vestiges of regulation. I believe that the message is getting through somewhat to the bulk handling companies at the moment. I believe there are moves afoot to try and establish a code of conduct. I believe they are recognising that growers have a genuine interest. But if we signal that this parliament has lost interest in achieving this outcome, I think we will take away the pressure to continue on the reform path. If that is the case, we will be dragged back here within a few years to reinstitute something similar to the WEA to do exactly what we should be asking it to do now. In this case, we are saying hold off for a couple of years and give the industry a chance to sort it out and we will sit down with the industry and come up with the new guidelines in which it can operate. If the bulk handling companies have moved that far in the interim period that we do not have a problem then we will not have any work to do, will we?

But to just wash our hands of it and say that this parliament no longer has any interest in the issue is abandoning our farmers.

Those who say that this is a stalking horse to bring back the single desk could not be more wrong. This is not about the single desk; this is about having properly functioning bulk handling and port authorities around Australia. It has nothing to do with the particular commodity. It is the fact that all of these products have to be funnelled through the one set of infrastructure. There is a similarity in Western Australia that I know the member for Brand will be very familiar with. We had a High Court case within the last two weeks wherein Fortescue Metals had a win to say they will be able to use Rio Tinto's railway lines. They will be able to put their trains on existing infrastructure. This is a very big move, and it has been in the courts for a number of years. There are great similarities here, because in the end farmers pay for all the infrastructure. They do not want to have to go out and invest in a whole heap of new infrastructure to allow new companies to operate in the same space.

There are some other loose ends to be tied up too. There are cases, particularly in South Australia, in the industry that I know the best. There are changes, and the ACCC has made some moves, but we have had a system where all companies have had to book places on the shipping stem for their export program. All companies have been charged a fee of $5 a tonne; but, in the case of the company that actually controls the shipping stem, if they default, they pay the $5 to themselves. It is a nice little deal if you can get it. After all, if you buy a monopoly you expect to be able to operate like a monopoly. There is some movement in that area, because the ACCC said we have to go to a full auction. I am looking forward to seeing how that operates. But it is yet to be proven.

There are concerns among the growers about upmarket access, about delivery fees—because of course if you deliver to a private operator and then it has got to come out of his private storage and go back into the bulk handling authorities, there are extra receiver fees. So all these things are extra impediments that make it harder for the competition to operate.

Not everything is bad. Like I say, I think there is some movement in the industry. But I do not think now is the time to just walk away, for this parliament to wash its hands and say, 'We don't want to have anything more to do with the Wheat Export Authority. Twenty-two cents a tonne—sure. I do not like paying any fees out of my wheat either. Growers are particularly incensed about the number of levies they have to pay. But 22c a tonne is certainly not one of the big ones. And I am getting no feedback from my growers about that particular 22c a tonne.

It is interesting: in this debate, as we have gone through the period of deregulation of the wheat industry, the grower representatives of the wheat growers in South Australia were some of the strongest allies of the Western Australians in the abandonment of the single desk. This was where the strongest voice came from. It made sense because, as has been said in other speeches, South Australia and Western Australia are pretty much totally export markets. But those same grower representatives—many of them friends of mine—are coming to me now and saying, 'No, it's different this time.' I understand the Western Australians have a different point of view because of the reasons that I outlined at the beginning of my speech. They still have grower control of the bulk handling company. But I ask them to have some understanding for the rest of Australia and also to realise that maybe their control of that bulk handling company is not forever and they can face exactly the same issues, for other operators trying to get into the market, as the rest of Australia is facing at the moment.

Gary Gray (Brand, Australian Labor Party, Minister for the Public Service and Integrity) Share this | Link to this | Hansard source

I listened intently to the member for Grey's observations, and I have absolute confidence in his knowledge of his local circumstances, given his own background. But I have to say: how can members opposite turn a blind eye to the numerous public appeals by Co-operative Bulk Handling Ltd in Western Australia, such as the WA Farmers Federation and the Pastoralists and Graziers Association—groups which represent the majority of Western Australian farmers and are their voice on this subject. Even the Western Australian Liberal Premier has pleaded for Western Australian Liberal members to support this bill.

The CBH terminal in Kwinana is in my electorate and stands to lose up to $1 million a year if the coalition votes down this final step towards deregulation by dismantling Wheat Export Australia. The CBH terminal is a cooperative. It is owned by farmers. Farmers will lose that $1 million. In addition to that, individual wheat growers in Western Australia stand to lose a further $3 million in revenue for their own farm businesses.

Western Australia is the biggest export wheat state. This is Western Australia's biggest agricultural industry. It is worth around $3.5 billion a year. It is one of the great pillars of the Western Australian economy, and it is beyond belief that some members on the other side, who claim to represent the interests of WA wheat growers, are prepared to betray them and sell them short for purely political reasons.

It is beyond belief that they are prepared to reject this Wheat Export Marketing Amendment Bill 2012 and cost wheat growers in Western Australia millions of dollars in lost revenue and continue to add to the administrative, regulatory red-tape burden of the CBH operation in Kwinana and the administrative, regulatory red-tape burden of all farmers in Western Australia. It is beyond belief that the personal appeal of 10 senior Liberal Party members in Western Australia who, on 4 October, wrote to all Liberal MPs and senators, will have the door slammed in their faces.

I seek leave to table the letter to all Western Australian Liberal MPs and senators from those 10 senior Western Australian Liberals: Barry Court—a substantial and thoughtful Western Australian Liberal; Murray Nixon; Andres Timmermanis; Steve Martin; Alex Butterworth and Gordon Thomson, President of the Durack Division; Richard Wilson; Sandra Brown; Steve Cleaver and James McLagan. They deserve to have their voices heard and their opinions heard within the Liberal Party. Their voices and their opinions count on this matter and their voices and their opinions are the voices and opinions of agricultural Western Australia—that great pillar of our state that built our state through its first hundred years of existence.

I hear members opposite speak of whether or not you are selling cars, washing machines or Tim Tams. I can say this: whether or not you are selling cars, washing machines or Tim Tams, you actually want to have a free market, and that is what we are talking about here—a free market. All of us would believe—and anyone involved in primary production would believe—that it is a reasonable proposition that, before you take your crop off, you should know and understand the conditions under which that crop will be marketed. You should understand that. And I believe that members opposite do understand that. I believe that there is still an opportunity for members opposite to be brought to their senses before an industry is brought to its knees. There is time for thought and for consideration of the critical matters which Western Australian wheat farmers have sought quite properly to bring to the attention of this parliament.

The Kwinana grain terminal in my electorate is a fantastic piece of infrastructure. It was built in the 1960s as a courageous act by Co-operative Bulk Handling. It cost $90 million, and these days, when you talk about the wheat terminal in Kwinana, you get the NIMBYs who would prefer, because it is bright blue, that it not blight their skyline. You get the people who do not like the dust that occasionally settles on the sea and helps grow fantastic mussels. You get the people who question whether or not that terminal is in the right spot. That terminal is a critical piece of Australian infrastructure. It cost a cooperative $90 million 40 years ago. It is an investment that today would not be made. Today, if you had to replace it, it would cost over $2 billion. It is an investment for future generations of Western Australians from great farmers who made a decision to build it. The beneficiaries today are a grateful generation of farmers and of workers in my electorate who work at that terminal. It exports our principal export crop. When you are dealing with a principal export crop, you want to deal with the freest, most open market circumstances that can be created, and you want to deal with that before you take your crop off.

The grain industry in Western Australia has a courageous and a unique history. From the days of its creation in the middle 1830s, at a time of starvation and malnutrition, our farmers in Western Australia began to understand the poor nature and the poor quality of their soils and they began to understand the importance of trace elements. The development of that industry grows in concert with the understanding of the addition of trace elements. It also grows at a time of the expansion of mechanised farming, the introduction of the internal combustion engine, and the opening up of a fantastic grain belt, made available to farmers in Western Australia because of science and because of an appropriate combination of agricultural common sense and know-how and industrial technology. So we develop a grain belt in Western Australia which is beyond any doubt the envy of the world.

Just the other day I was at a CBH function which marked a massive investment in grain rail infrastructure, an investment in infrastructure to carry five billion tonnes of grain around Western Australia and to bring it to our ports and our silos. Of those five billion tonnes, 3½ billion tonnes are our wheat crop, and it is that wheat crop that we discuss in this bill here today. The grain industry in Western Australia is a critical pillar of our social development, our community development, our own sense of being and, importantly, our economy. It is why our Premier supports this bill. But, unfortunately, our Premier does not have a voice in this parliament on this issue, because his own party in this place has deserted him.

The Western Australian grain rail system involves 1,200 kilometres of rail capacity to carry this crop to our markets. Five hundred million dollars from the Western Australian government, from the Commonwealth government and from CBH, from farmers, has been invested in the latest technology upgrade and uplift to bring our grains to market. We want it to come to the best possible market. We want it to come to a deregulated market. We want it to come to a transparent market. We want it to come to the market that our farmers want to take it to. All of us in this place should celebrate the removal of regulation and not seek to extend regulation, even for limited periods of time. Where we can, we should take regulations out of the system. We all know that. A decision not to support this bill is a decision to send a bill of $3 million to our farming community and to then impose a further bill of $1 million on our combined bulk-handling operations.

Today, wheat is exported from Western Australia to more than 20 countries. Major shipments go to China, Japan, South Korea, Indonesia, Iran and Pakistan. They go in bulk and they go in containers. Our systems for managing and handling our grain exports in Western Australia are built on the great insight that is brought to this industry by combined bulk handling, by the insightful decision made in the 1960s by Mick Gayfer to put into the industry a $90 million investment, which at that time people would have thought was mad. The generation who are the beneficiaries of that courageous investment, of that courageous decision, now want to say, 'Let's really get the benefit of what our forefathers have done.' By putting in place the best grain-gathering system, by investing in that grain-gathering system, by investing in our export infrastructure, we have made available the capacity to deliver great gains and great benefits for Western Australian farmers. This season is not going to be a great season. It did not rain much in June or July. The August rains did not really get into our grain belt and much of the September rains did not get into our southern wheat belt, although some did get through to the northern part of our wheat belt. But it is not going to be a bumper crop like last year's 14 million tonnes. It is probably going to be closer to nine million tonnes. At a time of pinched markets and difficult circumstances for our farmers because of increased costs and the difficult situation with the high Australian dollar, why would we want to make it harder for our principal export market industry, the grains industry in Western Australia? Why make it harder?

Members opposite have conceded: 'In time, we will get around to it. In time we will get around to this deregulation.' The time is now, a month before the grain crop is taken off in Western Australia, a month before up in the northern part of the grain belt they start to get their machines going to harvest their crops, and six weeks before they start to do that around my family's wheat properties in Kellerberrin and Doodlakine. It is around a month before they will do it in other parts of the southern wheat belt.

Farmers deserve to know the conditions under which they will sell their crops before they take off their crops. I can do no more than politely plead with this House and the members opposite to heed the views of Western Australian wheat farmers, heed the views of the Western Australian Premier on this matter and heed the views of those farmers who genuinely want to gain the best dollar they can for the crop into which their families have invested their livelihoods—a crop which saw an extremely uncertain 90 days at the start of this growing season and which is critical to the sustained health and welfare of our farming sector in Western Australia.

I know and I understand what difficult decisions look like. I know and I understand that the Australian wheat industry is not the same on the east coast as it is on the west coast. But I am a Western Australian and a person whose family connections are with this industry, a person who knows it and cares about it. Every November I take great pride in taking my sons with my father-in-law up to the family farm to watch the crop being taken off. It is reasonable that at the time at which we watch that crop being taken off, my brother-in-law and his family should understand the conditions under which it will be sold. That is a reasonable proposition. It is a sensible proposition.

What the government and the parliament are attempting to do here in this bill is consistent with years of discussion. It is consistent with undertakings given by this parliament on many occasions to seek to remove the wheat export arrangements currently in place. It is good public policy. It is good policy for the farmers of Western Australia. They have reasonably sought that their Western Australian parliamentary representatives support them in this place, and I am extremely pleased that Mr Crook has agreed to do just that. I am extremely pleased that people are listening to the Western Australian farmers. But I plead: this is an important matter, and there is time before this vote is taken for people to change their views and consider the central, thoughtful proposition that farmers, before they take their crop off, should understand the conditions under which their crop is to be marketed. I thank the House for its indulgence.

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

The Australian wheat industry is heavily exports focused, with as much as 70 per cent of wheat production each year being exported throughout the world. Australia, historically, has been one of the top five major wheat-exporting countries. Let me from the outset declare a passionate interest in wheat growing and the future viability and prosperity of the industry. I grew up on wheat farms at Marrar until 1968 and then until 1986 at Brucedale between Wagga Wagga and Junee. My late father, Lance, grew wheat, and two of my brothers-in-law, Gary Brill and Ian Buchanan, are wheat growers at Wallacetown and The Gap respectively.

In 2010-11, Australia was the third largest wheat exporter, behind the United States of America and the European Union. On 4 June 2008, the transition to a deregulated wheat export market began with the abolition of the single-desk wheat-marketing arrangements, a dark day in the eyes of most growers to whom I have spoken. The Wheat Export Marketing Act 2008 established a system for regulating the export of bulk wheat such that exporters of bulk wheat had to be accredited under the Wheat Export Accreditation Scheme, which is administered by Wheat Exports Australia and primarily funded from the wheat export exchange. A total of 32 companies have been approved for export by Wheat Exports Australia, all of which have operated effectively. Nineteen of these are actively exporting.

In 2010-11, 18.5 million tonnes were exported; however, only seven companies exported more than one million tonnes. This wheat was exported to 52 countries for a value of $5.9 billion. Of the exported grain, 16.3 million tonnes were bulk and the remaining 12 per cent was in containers. These statistics highlight the regional monopolies which are operating in the grain market. Furthermore, of the 16 ports, 13 are dominated by the exporter who owns the port.

New South Wales Farmers, Grain Producers Australia, the Victorian Farmers Federation, AgForce, the South Australian Farmers Federation and Grain Producers South Australia all have concerns on the public record about the grain supply for bulk exports currently being dominated by three established bulk handlers, stifling a competitive environment which could benefit farmers. The infrastructure networks belonging to these bulk handlers allow a natural monopoly as they have the integrated receiver, up-country storage and the port terminal services. This undoubtedly provides an advantage in the wheat export market when they become grain-trading entities.

The bill before the House implements the government's response to the Productivity Commission's recommendations on wheat-exporting marketing arrangements. If passed, this bill will remove the Wheat Export Accreditation Scheme and wheat export charge on 30 September 2012, abolish Wheat Exports Australia on 31 December 2012, and continue the operation of the port access test, to be administered by the Australian Consumer and Competition Commission from 1 October 2012 until at least 30 September 2014. The access test will then be abolished on the condition that a non-prescribed, voluntary industry code of conduct covering access to grain export terminals is in place.

The coalition does not support this bill to abolish Wheat Exports Australia and believes consultation with industry is the best way to address the outstanding issues. Consultation with all of the industry is something that has been severely lacking in this, as with so many other Labor policies brought before this House in recent times. The government did not widely consult with farm organisations on this bill and relied on a task force predominantly made up of large grain trader representatives.

The coalition has consulted with a large number of farmer groups and grain marketers and is of the view the majority support the retention of Wheat Exports Australia, at least until unresolved issues are addressed. As a result of these discussions, the shadow minister for agriculture and food security has moved an amendment to the second reading, calling on the government to extend the operation of the wheat marketing authority for not less than six months after the resumption of the 44th Parliament to enable the government of the day to modify Wheat Exports Australia or replace it with another body to better represent the needs of the wheat industry.

Further, the coalition commits to a consultation process that will begin immediately and provide stakeholders with a forum to outline what wheat industry issues need to be addressed. The majority of growers have presented a position that calls for oversight of the market to ensure transparency and competition, which has not currently been achieved. Former National Farmers' Federation president Graham Blight has said there is 'no equity in the marketplace', and he is right, of course. The proposed abolition of all statutory oversight is premature and such a decision should be based on evidence of the effective and efficient operation of the export wheat supply chain.

Many growers feel there is a need for a statutory body to oversee the industry and for it operate in a similar way to the old Wheat Export Authority. This is certainly the feeling amongst growers in my electorate of Riverina, and Ian Munro of Rankins Springs, better known as Jock, has been the most vocal about wheat issues in my time in parliament. I appreciate his forthright stance and his ongoing passion for the industry. Mr Munro describes the current system as 'unfair and inequitable' and believes a statutory body could police the ports and ensure equitable access for traders, especially the smaller traders who struggle against the regional monopolies.

A code of conduct is not viewed by growers as having enough power to ensure all parties will abide by it and it will benefit only the traders, not the growers. Evidence also suggests the export wheat supply chain is not mature enough to self-regulate and there is no precedent for an industry code of conduct in the agricultural sector.

Mr Munro also voiced concerns about the imbalance of the availability of wheat stocks information. This is an important mechanism to determine pricing levels throughout the wheat export supply chain, and Mr Munro's concerns were shared by many submissions from growers and exporters made to the Senate inquiry into the Wheat Export Marketing Amendment Bill 2012. Lack of access to this information has led to dissatisfaction amongst grower groups, market and price discovery inefficiencies and an inability for growers to make informed decisions on what crops to grow.

The current accreditation system also needs improvement to ensure accreditation is based upon performance and not character. The scheme does not need to be and should not be inflexible but must ensure symmetry in the supply chain around stocks intelligence, which could be anti-competitive, and maintain the integrity of the Australian wheat varietal classification system, ensure contract terms and specification compliance and recognise the need for greater transparency and improved confidence in the integrity and quality of Australian wheat.

The farmers organisations that have banded together have called for amendments to the present regulations to ensure accreditation is not a bureaucratic threshold to a competitive market but rather a tool to create a market environment where everyone is on an equal playing field. There is also the need for a monitoring role for export cargoes, bulk and non-bulk, to provide assurances around the quality and varietal integrity of wheat exports.

New South Wales Farmers supports the creation of a scheme to protect and continue to build a premium for Australian grain through quality assurance systems for exported wheat. This view is shared amongst other growers who are concerned a few dodgy operators would have the potential to ruin Australia's reputation for providing quality wheat if the industry goes down this path. Currently, by utilising the wheat export charge as the primary funding source to provide ongoing effective oversight of the export wheat markets, there are adequate capacity and resources. In order for any structure to provide effective oversight it will need a charter that provides appropriate oversight for the new role and function.

New South Wales Farmers President Fiona Simson has voiced her concern about this bill. Her organisation believes the liberalised wheat export market has not yet delivered the purported market benefits to grain farmers in terms of competition for wheat and improved on-farm returns. New South Wales Farmers would also like to see a scheme that requires reporting of information on available stocks of wheat and the quality of uncommitted wheat warehoused by grain exporters. They believe this would also ensure fair terms of access to port terminal services and benchmark the market to build competition for farmers' grain.

This bill certainly has had vocal opposition towards it from the grain industry and has forced grain marketers to address the issues of port access, the voluntary code and other sectors of grain producer representation to try to get a cohesive arrangement working in the best interests of Australian grain. There have been positive signs and industry now needs to build on this with the WEA.

The coalition is committed to continuing discussions with the wheat industry to help create the best environment for it to be able, given good seasons, to prosper. Whilst the coalition is eager to partake in this process, yet again this situation underscores the inability of this Labor government to understand and resolve issues, especially in the agricultural sector. For Australia to continue to be a top quality wheat exporter it is essential that systems are in place to ensure the product being exported has the necessary quality assurance programs and all growers have the necessary access to wheat stocks information to make informed decisions about which crops to grow and what their returns will be.

The latest issue of the Grains Research and Development Corporation journal Ground Cover, for June-July, tells of our quality issues in Asia, the fact the USA is stealing a march on us and that our wheat is losing its relative value. Alexandra Roginski writes:

Australian grain traders need to improve the traceability and consistency of grain within shipments if Australian wheat is to meet the functional needs of end-users and maintain its hard-won foothold in South-East Asian markets.

She added this was the finding of a GRDC funded study by the Centre for Grain Food Innovation in Perth. While Asia is a fast-growing market for wheat and flours derived from Australian wheat, its bakery sector is not satisfied with the traditional bulk commodity approach to Australian exports. This is another reason why the retention of Wheat Exports Australia is important until a proven structure or arrangement is put in place to address the issues that have arisen since deregulation. Professor of Food and Agribusiness Marketing at Curtin University, Peter Batt, who conducted the research with Associate Professor Fay Rola-Rubzen, says Australia still treats wheat as a commodity to be sold en masse. Instead, he argues, there needs to be an urgent shift in focus to maximising value through product differentiation for the range of end-uses in South-East Asia. Tellingly, Professor Batt says that many of those in the industry bemoaned the lack of Australian technical support and people to talk to in the absence of a single selling desk.

Import statistics show that it is a matter of value. In an increasingly competitive South-East Asian market, Australia is a dominant wheat supplier. But Professor Batt says that that volume does not automatically equate to higher prices per tonne. The most recent import statistics per country reveal the position of Australian wheat. Australia was the biggest exporter of wheat to Indonesia and Singapore in 2010, Malaysia in 2008 and Vietnam in 2009. Thai statistics for 2010 show Australian wheat coming second to the US. Where available, statistics on wheat flour by country show Australia as 12th on the list of exporters to Singapore and ninth on the Thai list. In Indonesia's wheat and wheat flour market in 2010 Australian wheat accounted for about 60 per cent of imports, but realised only 58 per cent of the value. This two per cent gap equated to about US$34 million in lost income to Australian growers. By comparison, Canada supplied 13.6 per cent of the wheat but took home 14.9 per cent of the payments. The US provided 11 per cent of the wheat and took home 11.63 per cent of the earnings. In the Thai market in 2010 Australian wheat was priced at US$272 per tonne, compared to US$297.50 per tonne for US wheat and US$282 per tonne for Canadian wheat. Between 2009 and 2010 Australian wheat decreased in price by about $13 per tonne, while US wheat increased by about $4.60 per tonne. Again, this highlights the need to remain steady on this valuable export industry, to get things right, to put in place measures to maximise our potential and to help and protect growers, who have been through more than enough angst in recent times.

National Farmers' Federation President Jock Laurie, on his recent return from Indonesia, said grain importers there raised concerns about the quality of our exports, saying the final delivered product is failing to match the standards of what had been promised in the original contracts. The Indonesian concerns follow the demise of the single desk. Mr Laurie was part of an Australian delegation including the federal trade and agriculture ministers that visited Indonesia in July for important talks on market issues and opportunities. According to Wheat Exports Australia, Indonesia has been Australia's biggest export market over the past seven years, buying an average of almost 2.5 million tonnes per year.

Many growers will steer away from pools and rely on spot cash prices at harvest, which will further weaken the harvest price if this bill goes through. The WEA was able to demonstrate how beneficial it could be to the industry by conducting research into an important aspect of grains marketing, and reporting to industry and government. That is how it should be. If Labor really cared about the Australian wheat industry, instead of shutting down the WEA it would give the authority powers to benchmark the performance of accredited exporters and bulk and container shipments and to publish export information.

Not only is Labor intending to shut down the accreditation process but the bill redirects possibly up to $2 million of paid, unused levy money to the minister to control in a vague, unspecified fund that will almost certainly be used to pay for other government functions in a cost-shifting exercise. You cannot trust Labor with money. How many times have we seen this in recent years? If the WEA is to be shut down, and that is far from settled, grain growers should be the ones deciding where unused levy funds are spent.

This is another example of Labor's contempt for agriculture. Labor has cut $2 billion from the agriculture department in the past four years, and the scrapping of the WEA is just another step in the process of getting rid of the agriculture department. I commend to members an article written by the New South Wales Farmers' Association grains committee chair, Mark Hoskinson, from Kikoira, in The Land, headed 'Bill breaches government promise,' and seek leave to table the opinion piece. (Time expired)

Leave granted.

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

As the member for Riverina and other members on the other side of the House well know, wheat is one of the very last federally regulated commodities in Australia. The Wheat Export Marketing Amendment Bill 2012 is continuing a process of deregulating the bulk wheat export market. That is bringing wheat into line with other agricultural commodities markets and it is doing so for the benefit of wheat farmers, so they can maximise their return, be globally competitive and continue to occupy their place in the national landscape.

I had the privilege of working in the late 1990s with the late Senator Peter Cook, a Western Australian senator, who I know was passionate about two things. One was wheat; the other was free trade. Senator Cook played a key role in the period in which the wheat-for-weapons scandals were being uncovered. The subsequent Cole inquiry began the process that is now underway. This steady movement away from a single desk towards a more market oriented approach is a process that was supported by Liberals on the other side of the House as recently as 2008. But as a media release from the chairman of the Pastoralists and Graziers Association of Western Australia, John Snooke, has noted:

The reason the Liberal Party split from their coalition partners in 2008 and supported Labor's deregulation Bill was that the Nationals' policy on wheat export marketing was proven to be an abject failure.

It goes on to say:

What is very clear is that Mr Abbott has fallen for the old Nationals’ chestnut of confusing everyone into thinking that you can deregulate through regulating.

It finishes up by saying:

All Mr Abbott's joint statement will do is show that the Liberal Party is no longer prepared to stand against the protectionist policies of the Nationals.

I do think it is a pity when those opposite who understand the importance of free markets and deregulation end up falling back into the old DLP tendencies that are so strong in the National Party and that have now come to prevail in the Liberal Party, whether it be scaring the Australian people over foreign investment, whether it be conducting outrageous scare campaigns on market based environmental solutions such as water buybacks in the Murray-Darling or a price on carbon or whether it be siding with the Nationals on protectionism over free markets.

Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

Order! The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour and the member for Fraser will have leave to continue speaking when the debate is resumed.