Grant Chapman (SA, Liberal Party) Share this | Hansard source

The Wheat Marketing Amendment Bill 2006 establishes new arrangements for controlling the export of wheat from Australia. Therefore, as a wheat grower, I declare a personal interest in the legislation.

This bill was flagged by Prime Minister Howard following the tabling last week of the report of the Cole inquiry into AWB Ltd and AWB International’s corruption of the United Nations oil for food program. It puts into place the Prime Minister’s promise that, in formulating its response, the government’s dominant concern would be the interests of Australian wheat growers and that the federal government would consult widely with growers and the industry before finalising any changes to wheat export marketing arrangements.

Australia has a long history of regulating wheat marketing. The Australian Wheat Board operated from 1915 to 1921 and from 1939 to 1947 under wartime emergency provisions to acquire and market the Australian wheat crop under a pooling arrangement to ensure price stability for growers and appropriate management of this vital foodstuff during wartime. However, it was in 1948 that legislation established the Australian Wheat Board to have a similar marketing role for the first time in peacetime.

My late father, who died in 1999 in his 94th year, was instrumental in this postwar establishment of the Australian Wheat Board. As President of the then Australian Wheatgrowers Federation, which more recently has become the Grains Council of Australia, he led the negotiations with the Chifley government in the immediate postwar period for AWB’s establishment and the operation of the single desk for wheat marketing. This was consequent on his role as one of the leaders in establishing, in the early 1930s, an organisation to represent wheat growers in South Australia, devastated by the collapse in wheat prices during the Great Depression, who were further ripped off by market manipulation by grain merchants. He saw the benefit of the single desk and fought hard and successfully for its permanent establishment after World War II.

The release of the Cole report would have been a sad day for him if he were still alive. A principled and ethical man, he would have been devastated by the antics of AWB Ltd and AWB International revealed in that report—organisations he helped create, albeit operating now as listed commercial entities rather than as a statutory authority. The release of the Cole report has clear implications for the operation of the single desk system for Australian wheat exports and this has caused significant concern to growers, both immediately and in the longer term.

The bill transfers from AWB International to the Minister for Agriculture, Fisheries and Forestry, until 30 June 2007, the right to veto applications for bulk wheat export from exporters other than AWB International. It is a temporary measure to address current concerns in the industry about the wheat marketing arrangements, particularly in Western Australia, where there are fewer domestic marketing options than in the eastern states. It is also an inevitable consequence of AWB’s unacceptable behaviour.

South Australian growers have discussed with me their concerns about the impact of changes to the single desk system on the wheat pool and prices. Their concerns are compounded by the current drought resulting in lower yields this season, rendering it essential that the government’s decisions ensure that maximum and sustained financial stability is available to growers.

Currently, Australia exports wheat to more than 40 countries and, although we grow only about three per cent of the world’s wheat, our total wheat exports represent around 15 per cent of the world wheat trade annually. The Australian government has worked hard to maintain the single desk arrangement as part of all trade agreements, such as those in the World Trade Organisation and the Australia-United States Free Trade Agreement, on the grounds that it offers a transparent and commercial operation. The veto powers conferred by this bill do not represent a change to the Australian government’s single desk policy. For the six months to 30 June 2007, during which the minister will hold the veto, AWB International will remain exempt from requiring export consent from the Wheat Export Authority and will continue to be the buyer of last resort.

In a corrupted international wheat market, where most other exporting countries substantially subsidise their growers and where, in a number of instances, there is a single purchasing authority, I believe the single desk continues to provide benefits to Australian wheat growers. This view is reinforced by the fact that growers and marketers from other countries have lobbied hard over many years for the dismantling of the single desk. Clearly they see it as an advantage to Australian growers. Hence, if a majority of growers seek its retention during the next three months of consultation, I will support them. However, careful consideration will need to be given to the way in which the single desk and the veto are to be administered in the longer term. It is no longer tenable for them automatically to be the bailiwick of AWB Ltd.

This legislation will provide the Australian government with the opportunity to address the current and urgent concerns of wheat growers while allowing the government to develop future long-term wheat marketing arrangements, taking into account all of these issues. I commend to the Senate the speedy passage of the bill.