Keep AWB away from discussions

31 May, 2007 07:00 PM
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AWB management will be quarantined from the farmer-based working group that has nine months to establish a new grower-owned and controlled single desk marketing company for wheat exports.

The Federal Government amended wheat marketing legislation last week and instructed grower groups to jointly develop a model wheat export management company by the March 1, 2008 deadline.

The working group will initially comprise presidents and executive officers from farming organisations in WA, NSW, QLD and Victoria.

The group¹s composition is expected to evolve in time.

The door has been left open for AWB to provide input into the mechanics of the new model.

ProFarmer managing director Richard Koch said the government¹s decision excluded growers who no longer wanted to use the single desk system to sell their wheat.

Mr Koch said it would be extremely difficult for the grower groups to set up a new entity without a heavy hand from AWB.

³Our feeling is that it will be impossible to establish this structure without a very heavy hand from AWB Ltd,² he said.

³It is likely the first port of call will be to try and set up a de-merged AWB International, where AWB systems and staff, and possibly assets, may be used to float the new entity.

³But, what would AWB shareholders want in exchange for this ñ rights in perpetuity to extract monopoly rents from supplying services to the new de-merged entity?²

Mr Koch said the key for growers was to ensure that any new system did not hold them hostage to AWB and the continual failures brought on by the old system.

³We can see that, like last year, many growers will withhold their wheat from AWB this harvest and embarrass the Government on the eve of a potentially very tight Federal election,² he said.

³The government will think this creates the right headlines and solves the problem, but does it really?²

WAFarmers grains council president Derek Clauson said accusations that farm lobby groups were in bed with AWB were false.

Mr Clauson acknowledged the groups would need to remain at arms length in order for the project to work effectively.

³I think WAFarmers and the other state farming organisations are very much at arms length from AWB and we now have a plan that we can now start to address,² he said.

³We will obviously be engaging AWB in discussions during this process because it is essential that we do so.

³We need to know exactly what their timetable is so we understand when they plan to go to their shareholders to receive the approvals that they require.

³They also have to put a balanced view point to their shareholders so in constructing their proposal as shareholders we will learn a lot more about how they are intending to handle the transition.²

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