Self-regulation works: Honey

19 Jun, 2013 02:00 AM

THE transition from a regulated to deregulated wheat market over the past four years has proven that industry self-regulation works, according to Grain Trade Australia (GTA) chief executive Geoff Honey.

Record tonnages and value in the period following deregulation backed up the argument, which Mr Honey has made to a roomful of the world grains industry’s most influential people.

Mr Honey, who has just returned from the International Grains Council (IGC) annual conference in London, made a presentation at the conference outlining the success of the Australian wheat industry since the dismantling of AWB’s monopoly on wheat exports.

“In the past four years, the Australian wheat industry has seen record production, record shipping programs, record growth in container exports and a swing into new markets,” Mr Honey said.

“The crop grown in 2010 set a record of 27.5 million tonnes, which was broken by the following year’s crop of just under 30 million tonnes.”

He said the growth of the industry was not confined solely to mere production, pointing to bustling export programs over the past few years.

“Bulk shipping programs have been running at record levels, while container exports have grown in the past four years from a base of 0.5 million tonnes to over 2.0 million tonnes.

“Our exporters managed to find markets despite record tonnages in a very wet year, which resulted in substantial quantities of feed grain.”

Mr Honey told the conference Australia’s export focus was moving east.

“Historically the Middle East was a major market for Australian wheat, but eastern Asia now accounts for 70 per cent of our exports – up from 30 per cent in 2008.

“This change reflects our natural freight advantage over our North American competition and also the ability and quality of Australian wheat to satisfy the contemporary needs of Asian markets.”

Mr Honey also took the opportunity to highlight the success of the current marketing environment, urging Australian government to go easy on regulation within the industry.

“All this is evidence of the success of the deregulation process, achieved by a co-operative approach across the supply chain rather than through bureaucratic regulatory structure,” he said.

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Philip Downie
19/06/2013 6:08:55 AM

Self serving for the traders Geoff. So deregulation increases production what a load of. Of course higher production would increase exports what else could it do. You can always sell to new markets if the price is right. Why do we have to read such tripe.
19/06/2013 6:57:32 AM

My Honey, please be honest. Improved Australian weather resulted in higher yields which resulted in higher production. As a result farmers had more grain to sell. Farmers are too small on their own to organise export shipments and without their own export single desk, Traders were naturally handed grain to ship. When grain is lobbed in your lap, in a world short of supply from elsewhere, it was not so hard to sell it. Let us see how you perform when US, Canada and EU grain production returns to over supply again and you get access to cheap subsidised grain overseas.
19/06/2013 7:05:36 AM

I wonder how much all of this propaganda by Honey is aimed at conning the Aust Govt into falling for the ADM razzle dazzle to get effective monopoly control over East Aust grain farmers by getting approval to own GrainCorp? The only competition to be discussed then would be the competition between farmers to beg someone to buy their grain. If the Govt would not allow growers to monopolise their own exports, why should they allow a foreign owned private grain trader to have that monoploy?
Bushie Bill
19/06/2013 7:17:42 AM

You may well call this a "load of", Philip Downie, and whinge (you are good at that) about "why do we have to read such tripe", but you do not contest one singe figure or one single argument in a very well reasoned article full of facts and figures. Where is your counter argument and where are your refuting figures? Lazy monopoly-protected farmers cannot live with competition.
19/06/2013 8:18:54 AM

yeah, deregulation of the dairy industry worked fantastically.....for coles and woolworths that is!
Philip Downie
19/06/2013 2:15:35 PM

BB, I contest the whole article and its premise if you could read. Talk about whinging, that is not whinging it is contesting the BS put forward by Geoff. I wonder how happy he would be if traders did not run GTA or WQA and they were run for industry good and not trader good. By the way why do you bother writing, just send in your name and we can all fill in the blanks of you diatribe.
19/06/2013 3:32:58 PM

its growing in tonnages because we have to produce more tonnes to make the same.amount of dollars
19/06/2013 4:18:01 PM

Bushie , FYI , only monopoly operating in the grain job in this country now is the one owned at the moment by Graincorp Shareholders but soon to be sold to ADM, which will then make it a foreign owned monopoly. What Mr Honey is not telling you is that most of our customers are complaining about the lowering of Quality control and the logistics bottlenecks that are occurring at port where multiple exporters are trying to blend consignments and restricting access in the process. Since when did Geoff Honey become the spokesman for the Australian Grains Industry?
common sense
19/06/2013 6:42:51 PM

Farmers are small business's. They risk more than most to produce food and fibre:- including, capital in land, plant and machinery,buildings,water, seed, fertiliser, fuel, chemicals, and other merchandise. They then risk weather to sow, grow, harvest and deliver into safe storage. Other risks are fluctuations in price, payment, interest rates and currency. Down stream business's that feed off farmers include, storers, transporters, produce and derivative traders, processors, retailers banks etc. None of have such exposure to weather. We all rely heavily on farmers surviving. So hear them out.
Bushie Bill
20/06/2013 9:52:21 AM

If common sense correctly assesses the risks faced by farmers, why would anyone willingly take these risks when there are options? If you know the risks, assess them and mitigate them, how can you possibly blame anyone but yourselves if and when things go wrong? Who do you want to blame, and why? You cannot blame retailers or consumers for looking after their own interests. After all, that is what you are trying to do, isn't it? If you can't sell profitably, why do it? Why do you expect protection from the market? You don't buy Oz cars if there is a better or cheaper foreign option, do you?
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