Alan Eggleston (WA, Liberal Party) Share this | Hansard source

I am very pleased by the action the government has taken to transfer the veto on the international marketing of wheat from AWBI to the Minister for Agriculture, Fisheries and Forestry for a period of six months. By so doing, the government has provided a solution to the immediate problem for West Australian wheat farmers, who face financial disadvantage under the current arrangements, whereby the Australian Wheat Board effectively has the power of veto over international sales. As has been said by other speakers, WA largely produces wheat for export. Were the WA farmers to sell their wheat through AWB this year, their financial returns—given the severe drought they face—would be less than would be the case were they able to sell it through the CBH or Co-operative Bulk Handling.

The transfer of the veto to the minister will be for a period of only six months, which will allow the government an appropriate period of time to fully consider the long-term future of AWB’s management of the national wheat pool. As I understand it, the review of the management of the international wheat marketing system will be done in full cooperation with the wheat growers of this country, which will ensure that the final decision arrived at is a consensus of both the government and the growers of Australia.

There has been concern expressed over the last few years about the way Australian wheat is marketed internationally. Earlier this year I attended the annual general meeting of the Pastoralists and Graziers Association of Western Australia, where the sentiment was very strongly against the maintenance of the single desk marketing operation under the auspices of AWB.

Members of the PGA strongly believed that the single desk was denying the wheat growers of Western Australia the opportunity to sell their wheat at maximum return around the world through other agencies such as CBH. However, subsequently it has become apparent to me that there is a division of opinion amongst wheat growers in Western Australia and that those in the West Australian Farmers Federation, or WAFF, are not necessarily in agreement with the PGA on the subject of the abolition of the single desk as a marketing tool.

Furthermore, in November I received correspondence from the wheat exporters of Australia, a group which represents farmers involved in the wheat export trade, which made some criticisms of both the AWB and AWBI which I do feel warrant further evaluation. This wheat exporters group wrote to express concern about the relationship between AWB Ltd and AWBI in terms of the profit which is derived from providing services to AWBI, as well as concern about the fact that AWBI is exempt under the present regulatory regime from: (1) having to obtain export licences from the Wheat Export Authority, (2) the requirements of the Trade Practices Act and therefore ACCC oversight of its terms in dealings with its client base, and (3) the Financial Services Reform Act. They were also concerned about the fact that, under section 57 of the Wheat Marketing Act, AWBI has a complete veto over the government regulator, which is the Wheat Export Authority, in granting bulk export licences to any other entity, including individual wheat growers seeking to sell their own wheat, and that they must be consulted on container load shipments, thus meaning that advance commercial knowledge is given to them so as to effectively gazump any prospective sale or frighten the potential customer off through the suggestion of future supply problems.

While I do not pretend in any way to be an expert on the wheat industry or the marketing of wheat, it seems clear from the views which have been put to me over this year that there are some problems in this industry. Accordingly I believe the decision of the government to review this industry over a six-month period is a very wise one and will enable a full assessment to be made of the needs of the growers marketing wheat internationally so that, if appropriate, the wheat marketing system can be reformed.

One solution which is fairly consistently put forward by Western Australian growers is that, while the single desk has been a good marketing mechanism and should be retained, at the same time there is a case to be made for some flexibility in its operation to enable growers such as those in Western Australia to sell their wheat in individual spot markets at times. Because of the serious financial consequences which would face Western Australian growers if this legislation were not passed without delay, I urge all my colleagues to support it—bearing in mind that the whole system of wheat marketing is to be reviewed over the next six months by the government. I commend this legislation to the Senate.