Cooperative white knight a fantasy: Flugge

23 Feb, 2005 10:00 PM

FORMER Australian Wheat Board chairman and champion of single desk marketing for wheat, Trevor Flugge, has said that the fight to maintain viable cooperatives in agriculture has been lost.

Speaking at last week¹s Nuffield Farming Beyond Tomorrow seminar, Mr Flugge said the cooperative world was dying, in the context of grain exports.

World politics had won.

But farmers still have the ability to grab opportunities in the export market.

His words will certainly bring smiles to the faces of proponents wanting to restructure Co-operative Bulk Handling (CBH) into a more corporate body and shed the flaking skin of a cooperative.

And though many farmers won¹t let it (the cooperative) die peacefully and still cling to the hope that some white knight will appear from somewhere to make things the way they used to be, Mr Flugge said it would not happen.

³This is an era where WA farmers had to become price makers with clever niche marketing of a variety of products,² Mr Flugge said.

³They have to take heed of world market signals and face the challenges of consumer-led quality assurance regimes.²

Admitting to a healthy dose of cynicism, gained from years of international trade experience, Mr Flugge said farmers had to realise the cut and thrust of world trade.

³I¹m cynical of trade reform,² he said.

³Despite all our arguments over many years with the World Trade Commission, and the many meetings with other countries to achieve trade agreements, when you boil it all down it doesn¹t mean a hell of a lot.

³The huge trade distortions created in the last century, particularly in Europe, would take a huge political will to turn around and that¹s not going to happen.

³Trade reform is not the answer for farmers who want to do better tomorrow, because it will only happen at a snail¹s pace and will be based on political expediency.

³Nobody is out there wanting to help Australian farmers, and the fact is that the bulk markets will decline and will be of less value.

³But all of that shouldn¹t be a barrier to looking for opportunities for Australian agribusiness.²

He suggested one tactic might be to turn efforts to providing the bulk of grain to the domestic market as it grows in a more deregulated and value-adding environment, creating demand for more grain.

³At the moment we export 80 per cent of our grain and sell 20 per cent on the domestic market,² Mr Flugge said.

³I think we should turn it around and strive for 80-20 in favour of the domestic market, because it¹s our best market, in terms of many things including transport and payment.

³I like the United States and Europe too because they can pay for quality products.

³If you assess Australia, it has a good reputation for integrity and capability as an exporter, and we¹re seen as a clean and green nation.

³We also have economic and political stability which allows for continued investment in production systems and value adding opportunities.

³I believe there are opportunities for high quality differentiated products because environmental issues are far more in focus these days and we have to worry about it.

³In the so-called good old days, agriculture virtually drove the market, but with less government interference through deregulation its allowing the market to drive agriculture.

³And the market wants quality assurance and a preferred brand.

³We have to accept that from now on that¹s the name of the game.²



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