Where to now for wheat?

THE wheat industry is running out of time – and options – for what it wants its new export marketing system to look like.

Either it pursues the idea of an AWB demerger or it puts together a new single desk body from scratch and fast.

For most growers, the alternative to these is unthinkable.

The Federal Government has made it quite clear it expects a workable wheat export model by March next year – and “March” (unlike the forever extending deadlines of the Cole inquiry) means March.

Should industry fail, it would leave growers vulnerable to a push for full deregulation from a Government in the comfortable position of having the election behind them.

So with eight months to go, what is industry’s best bet?

AWB says it can make the deadline with its demerger proposal but only if grower groups get behind the only model it says will get shareholder support.

Pursuing another model – no matter what its merit – is of little use if at least 75 per cent of AWB’s A and B-class shareholders can’t be convinced to throw their support behind it.

Without that support, a demerger can’t proceed – and industry doesn’t have the luxury of time to give it a second crack.

Should industry push ahead with a demerger it would be unlikely to go to a shareholder vote before October/November at the earliest.

If it was then voted down, industry would be back at square one, with just months to develop and bed down a “plan B” - even allowing for the fact they are currently working on a variety of options and contingency plans

Like it or not, AWB’s B-class shareholders (and there’s plenty of growers among them) won’t give the green light for a demerger if it means giving up intellectual property, key staff and payment systems for nothing.

But the prospect of winning tenders under AWB’s proposed essential services model – and the chance to normalise the company’s constitution – could be enough to lure a “yes” vote.

As one letter writer points out this week, the worst possible outcome for growers would for industry to rush into setting up a new marketer with no experience, no orders and no capital backing behind it.

Better to try and discipline a seven year-old and modify its structure than endure the teething cries of a newborn.

* QUESTION: Do you think the wheat industry should pursue an essential services single desk operator, or go for a full services model?

Date: Newest first | Oldest first

READER COMMENTS

Frank
19/07/2007 5:02:07 PM

There is no value in A Class shares for either ABB or AWB because growers were fooled at the conception of the dual class share structures by both companies. They were hoodwinked into believing electing a grower director to a board of a private company would protect their unique and precious ownership of their interests in the grain industry and the single desks for both wheat and barley. That ownership should have been protected by another unique method that gave genuine control that conferred real ownership that could only be lost when the majority of growers wished to relinquish it. It is farcical that a co-operative system of marketing, including ownership, control, intellectual property, control of stocks , varietal and infrastructure ownership and industry development could realistically be preserved by what eventually became publically listed companies without a whimper from growers or their elected representatives. It is an everlasting inditement on the industry's leaders that without so much as a whimper they propose to hand the best marketing system in the world over to public companies to abuse, corrupt and destroy. Then to allow multi-national raiders access to growers produce free of charge. Our politicians and agi-political leaders hang your heads in shame.
Grain Farmer
28/07/2007 7:32:00 PM

Our feed barley we substituted for wheat this year is looking better by the day. John Howard and his National colleagues have effectively destroyed the wheat industry in this country and will be held to account on election day.
Andy
31/07/2007 4:25:26 AM

It is increasingly obvious that wheat growers are looking for choice in marketing. Choice has delivered $264 for feed barley in WA (latest best price) for 07/08 season. It is time for the Gov to get right out of wheat marketing!
Grain Farmer
31/07/2007 8:03:31 PM

I listened very carefully to a presentation by shadow minister for ag, Kerry O'Brien, this week. In that speech he conveyed a message that AWB would not hold the single desk under a Labor Govt. He also explained that the WEMA plan for setting up a new single desk was doomed for failure because of the cost constraints. It left me wondering just what sort of marketing system he would come up with if and when elected to Government. Could one dare to hope that deregulation might be an option even though he concluded during question time that the Labor party supported the retention of single desk marketing for wheat. Is it any wonder wheatgrowers are confused!
Michael Hein
31/07/2007 11:18:27 PM

Barnaby Joyce and Peter McGauran should slowly start to understand that every licence that weakens the single desk is a net gain for farmers. regards
Jock Munro.
1/08/2007 2:03:43 PM

Shareholders voting to redeem their A class shares in ABB was inevitable once the industry moved towards deregulation - I believe if they had not done so the company would have taken steps through the courts to ensure that it did remove the dual share structure. I believe that it is a tragic day for SA barley producers - not only have they lost their grower marketer which had a constitutional obligation to maximise their returns but they will now be in direct competition with each other to secure sales of their barley to over seas customers. Further to this, growers will in future not have a body that negotiates on their behalf to lower freight and handling costs or to act as their voice in securing future rail and handling inititives. To add insult to injury, SA Barley growers will find themselves paying a compulsory levy to a body which will be charged with maintaining standards and the like - all which was provided by a single desk arrangement at negligble cost. The only positive in all of this is that a new generation of growers will see the folly of deregulation and its ramifications and hopefully will lead to a strengening of the resolve required to maintain our wheat single desk.
EWG
1/08/2007 6:18:54 PM

The Single Desk "is running out of time" and has been for years. The Political Iron Curtain that has seen AWB export monopoly survive beyond is use by date has disintergrated except the support from the bottom rung of the National Party. The Federal Government's decision to delay any decision on export wheat marketing has as much to do with giving WEMA and AWB's demerger proposal time to fail, as it did to protect the unity of the coalition. WEMA is made up of state bodies that have a history of blind faith in failed state based marketing monopolies: e.g. NSW Grains Board, Barley single desk Vic., Grain Pool WA. All growers are now enjoying the benefits of free and contestable markets in other grains. It is inevitable that the export wheat market will follow to a free bulk export market and the last one's to realise it, will be the likes of WEMA and its affiliates.
Concerned
2/08/2007 7:49:45 AM

Is Mr Blight still involved in his own private import/export trading business? If so, isn't his appointment a compliance issue of self interest?
Michael Hein
2/08/2007 6:46:59 PM

Kerry O'Brien's comments were indeed very disappointing. Instead of having a policy the ALP offers a few more reviews and inquiries. The industry needs those like a hole in the head. The ALP would be well advised to come up with a decisive policy of deregulating the wheat export. Voters are entitled to know where the ALP stands on this issue. Trying to straddle both sides of the fence just produces more politician's wishy washy as we have seen. Regards
annon
3/08/2007 7:22:52 AM

Would be nice to see the MEDIA reports BALANCED in the SD issue. Must listen to what the MAJORITY WANT! sick of the games being played.
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