Judith Adams (WA, Liberal Party) Share this | Link to this | Hansard source

I rise this evening to speak on an exposure draft of the Wheat Marketing Legislation Amendment Bill 2007, which calls for changes to the Wheat Marketing Act 1989. It is a bill to be introduced later this session to amend the Commonwealth legislative framework applying to the Australian wheat industry and for related purposes.

As all those present are fully aware, the wheat industry has gone through quite a lot of turmoil in the last few months with the Cole report being handed down and the Australian Wheat Board having problems as well as poor harvests throughout Australia. I declare my interest here in the Senate tonight. I am a wheat grower from Western Australia.

The government have looked at what they can do to sort out this problem. I congratulate the Australian government on announcing the appointment of the Wheat Export Marketing Consultation Committee on 12 January 2007. This committee is currently undertaking extensive consultation with the Australian wheat industry, particularly growers, about their wheat export marketing needs. It is due to report to the government by 30 March 2007.

The consultation process includes public meetings in major wheat growing regions of Queensland, Victoria, New South Wales, South Australia and Western Australia throughout the month of February 2007. The evidence gained from these 25 public meetings will help inform the government in deciding the future of Australia’s wheat export marketing arrangements. The appointment of this committee delivers on the government’s commitment to put in place a consultative process that allows growers and industry stakeholders to express their views on future marketing arrangements for the export of wheat.

In November last year Senator David Johnston and I proposed the introduction of the Wheat Marketing Legislation Amendment Bill 2006. Today, we have postponed the introduction of this bill and have released an exposure draft of the bill to facilitate greater public consultation and discussion on the issue prior to the introduction of the bill later in the session.

The exposure draft has four government sponsors: Senator David Johnston, Western Australia; the member for O’Connor, the Hon. Wilson Tuckey, who represents Australia’s largest wheat-producing electorate; the member for Hume, Alby Schultz; and me, a farmer and wheat producer from Kojonup in Western Australia. My co-sponsors and I believe our exposure draft reflects a viable solution to the current wheat marketing crisis. It is my view that, whilst many wheat growers still support the single desk concept, a large number no longer support AWB Ltd and its subsidiary, AWBI, as the manager of the system.

In my home state of Western Australia, some 95 per cent of the wheat produced is exported. This is also true of the vast majority of wheat produced in South Australia. This means that wheat growers in these two states are almost totally dependent upon the export market for their annual income. The dependence upon exports is not shared to anywhere near the same extent by wheat growers in other states, as most of that wheat is produced for the domestic market. Therefore, wheat growers in Western Australia and South Australia are left with no choice but to pay the fees extracted by AWB Ltd as the service agent for its fully owned subsidiary company, AWB International.

Whilst the Cole inquiry has brought significant media attention to the export wheat monopoly, I believe the system has been failing growers for many years. There is an inherent conflict of interest for AWBI between satisfying its shareholders and maximising grower returns. This conflict, combined with excessive supply chain costs and marketing costs—particularly in low-production years such as this year—and an underinvestment in the industry, has led to a situation where wheat growers are at the bottom of the food chain in terms of receiving the true market value for their crops.

The exposure draft, which I released today, allows for the single desk to be retained in the hands of the statutory regulator and recommends that a newly constituted Wheat Export Authority become the sole controller of exports by repealing the control now exercised by AWBI. This does not prevent AWB Ltd from conducting its present services, but to obtain export licences from the Wheat Export Authority it would have to prove that it was genuinely operating to maximise grower returns. Here I would like to mention that this should maximise net grower returns. The amendments to the act would remove AWB’s right to prevent others from obtaining licences. This power would reside with the Wheat Export Authority. The Wheat Export Authority would have the power to issue licences to other operators, provided they were confident that they were maximising grower returns—and, once again, I state that is net grower returns. Other amendments in the bill remove the Wheat Export Authority’s obligation to the Grains Council.

We suggest that the membership of the authority consist of a chairperson, one member who is an export wheat grower operating in Western Australia or South Australia, one member who is an active participant in export wheat marketing, a government member and one other member. Each of those members will be appointed by the minister in writing for a specified term of up to three years. The members will hold office on a part-time basis, and the performance of the functions or the exercise of powers by the authority is not affected by vacancy or vacancies in its membership.

I think the most important thing with this is that the Wheat Export Authority would be responsible to only the parliament and would be required to provide the parliament with a report on its actions annually. This report, unlike the current secretive arrangements, would be tabled in parliament and available to all. The issue of AWBI’s inability to pay growers delivering an internationally competitive price to the 2006-07 pool is now well established. Current legislation prevents public reporting of mismanagement by AWBI or AWB Ltd. The exposure draft would ensure that, like all other applicants, AWBI will have to supply adequate evidence of the bona fides of each reported sale to satisfy the Wheat Export Authority that in issuing a licence it has met its legal responsibility to maximise grower returns.

Upon the passing of these amendments, the Wheat Export Authority could no longer refuse to answer questions or plead in Senate estimates inquiries that it has no power or legal right to obtain or provide information relevant to the wheat export trade. As a member of the last Senate estimates committee, I found that trying to get information was impossible and very frustrating. Delivery statistics show that for the 2006-07 harvest 80 per cent of growers at one stage were not committing their wheat crop to AWB International. Growers who continue to participate in the traditional pooling operation, where they assume the entire risk, have no special protection from the changes contained in the exposure draft. However, all growers will have alternative choices and the right to know the full details of the pooling operation. To me, this forms the basis of all coalition party policy: full disclosure and freedom to gain the best deal for your circumstances.

A copy of the exposure draft has been sent to the recently formed Wheat Export Marketing Consultation Committee, which is a Commonwealth initiative that undertakes consultation with key industry players and growers. My co-sponsors and I clearly express our disappointment with the current system in a covering letter to this committee, highlighting the conflict of interest between the director’s responsibility to shareholders and the constitutional requirement to maximise net grower returns. The exposure draft reflects the popular public belief that, whilst many growers remain committed to a single wheat desk, a large proportion no longer has faith in AWB Ltd and its subsidiary, AWBI, in managing the system. The purpose of this bill is to introduce important reforms to the legislative framework governing the marketing of Australia’s wheat crop. My co-sponsors—Senator Johnston; the member for O’Connor, the Hon. Wilson Tuckey; and the member for Hume, Alby Schultz—and I believe our exposure draft reflects a viable solution to the current wheat marketing crisis.