Grower control stays only if AWB remains

29 Mar, 2006 08:45 PM
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GROWERS would lose out in many ways if AWB lost control of the single desk, according to AWB director Chris Moffet.

In his presentation to the Morawa meeting last week Mr Moffet said growers would lose their receiver of wheat of last resort and probably lose control of AWB.

"What will happen is that under our constitution if the single desk is lost to somebody else, like the Wheat Export Authority (WEA), we must call an A and B class shareholders meeting to decide if we change the company," Mr Moffet said.

"B class shareholders will call the day and growers will lose control of their company.

"The company will then become just another trader."

Mr Moffet said from that point on there would be no Golden Rewards system where growers were paid more on higher quality grain.

"Who is going to put in place Australia-wide quality standards where at every receival site wheat is judged by the same standards," he said.

Mr Moffet said AWB's market power also enabled it to command lower rail charges for the cartage of grain.

"We have that power and we use that power," he said.

Mr Moffet said without the pool the cornerstone of the wheat industry, the estimated pool returns (EPR), would be gone.

He said the EPR was generally conservative and historically accurate and many a farmer including himself used it as a financial indicator on which to base management decisions.

"You can go to a bank with a proposition backed by the EPR," Mr Moffet said.

He said that in the new world without the single desk and the three sisters in control there would be no information on which farmers could build their businesses.

"There would be financial uncertainty," he said.

Merredin grower Ian Lane asked Mr Moffet who would run and hedge the pools if AWB lost the single desk.

Mr Lane said he heard CBH would stop running pools for prescribed grains because Grain Licensing Authority (GLA) special licences made it difficult to estimate how much grain would be received.

"So if you don't know what wheat is coming in how are you going to run a pool?" he asked.

"Who is going to have the capital to run those pools?"

Mr Moffet said if AWB lost the single desk, a pooling system for wheat would be unlikely.

He said while Wheat Australia - a consortium of CBH, ABB Grain and GrainCorp - could have the money to run the pools, he questioned if they would do it under the new deregulated export wheat market.

Mr Moffet said each year the WEA approved permits for hundreds of thousands of tonnes of wheat for export in bags and containers, but on average only 21pc was used.

He said that without the single desk AWB would probably run its own localised pools, but they would open and close faster than the doors of a hotel.

Mr Moffet urged growers to read their WEA grower reports, which detailed the benefits of the single desk and to see how the system they supported so strongly delivered them results.

O'Connor MHR Wilson Tuckey said an international trader said it would like to run the pools because growers took all the risks.

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