WAFARMERS has exerted more pressure on AWB to release full details of its controversial services agr

15 Nov, 2006 08:45 PM
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Many grower lobby groups, including the Grains Council of Australia (GCA), have called on AWB to release details of the break fee, which came to light following an investigation by the Wheat Export Authority (WEA).

The break fee would compensate AWB shareholders from the pockets of graingrowers if the company lost control of the wheat export single desk.

AWB has said it is now negotiating the service agreement that outlines details of costs exchanged between AWB International (AWBI) and AWB Limited (AWBL) for servicing the national wheat pool, but grower lobby groups are becoming increasingly impatient waiting for the outcome.

It is believed the break fee could cost growers hundreds of millions of dollars and WAFarmers have now raised new concerns over the service agreement believing it contained extra financial liabilities that growers were unaware of.

WAFarmers Grains Council senior vice president Julie Newman deman-ded AWB immediately release the contract that stipulated the costs associated with servicing the national wheat pool.

³With some growers already delivering to the national pool, the pressure is building on AWB to show their trust,² Mrs Newman said.

³Information contained within the services agreement outlines specific details of additional costs and risks associated with the national pools.

³While the base service fee has been reduced from $65 million to $39.5m, the cost does not cover some of the risks listed in the services agreement such as demurrage.²

Mrs Newman said she had read last year¹s services agreement ‹ a confidential document ‹ and had some serious concerns about it.

³There was no priority given to improve net returns to farmers however there was a priority for buyers to buy wheat at the lowest cost,² she said. ³It gave more weight to AWB to reach its benchmarks than it did to maximise grower returns.

³This is my primary concern.

³We need to know a complete list of the marketing risks excluded from bonus incentives and basic pool costs.

³We need to know exactly what is in the contract and why it has not yet been finalised.

³Transparency is essential to ensure security of the pools.²

Mrs Newman said she was unable to speak on behalf of the other members of the WAFarmers Grains Council, but said there was no way she would deliver wheat to the national pool this year until she had read the services agreement and was satisfied that grower returns were 100pc protected.

²I will be warehousing my wheat and using cash markets until I have seen it with my own eyes,² she said.

Mrs Newman said WAFarmers had recently written to AWB upping the ante for full disclosure of the services agreement.

³AWB have replied telling us they will be waiting until after the Cole inquiry hands down its findings because they have not yet reached an agreement yet but we need to know what¹s in it now we are well into harvest,² she said.

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