FEDERAL Agriculture Minister Joe Ludwig has accepted the Productivity Commission's recommendations regarding wheat export market reforms.
But what will the deregulation of the wheat export market and reported reduced costs to growers and exporters mean for WA?
Mr Ludwig believed the recommendations would improve future wheat marketing arrangements and said they would be implemented through a staged process to continue the transition towards full deregulation.
He said the first stage would see the application of a "lighter touch" accreditation scheme under current legislation from October 1 this year.
"The decision will reduce the level of administrative red tape for exporters, including accredited port terminal operators and allow growers more time to adapt to the new export environment," he said.
Wheat Exports Australia (WEA) and the Wheat Export Charge (WEC) will be abolished on September 30, 2012 and access test requirements to support open competition will remain in place until 2014.
From October 1, 2014, the market will be fully deregulated and access issues will be governed by a code of conduct and general competition law administered by the Australian Competition and Consumer Commission (ACCC).
Both the Pastoralists and Graziers' Association (PGA) and CBH welcomed the government's decision to initiate a three-staged approach to the transition to full market deregulation in WA.
PGA Western Graingrowers chairman and long-time supporter of free markets, John Snooke said the decision to fully deregulate the wheat export market from October 2012 was a definitive endorsement of the free market and the benefits of competition.
"The decision to abolish the Wheat Export Accreditation Scheme, WEA and the WEC and remove the access test requirements for grain port terminal operators clearly shows the industry has demonstrated its ability to self-regulate without the burden of unnecessary government legislation and cost," Mr Snooke said.
"The government's approach will allow for a more effective transition to full market deregulation and will help ensure the advantages of 2008's removal of the single desk are realised."
Mr Snooke also said the staged transition would ensure accreditation and port access tests continued until 2014 when bulk handlers would be subject to greater scrutiny under general competition law administered by the ACCC.
He believed retaining the access test until 2014 should give industry sufficient time to develop competition to ensure the monopolistic control of the supply chain by bulk handlers was diminished.
On the other hand WA's largest grain handler CBH also welcomed the government's response to the Productivity Commission's recommendations but didn't believe "monopolistic control" was the issue.
CBH chief executive officer Andy Crane supported the full deregulation of the wheat export market because he believed it would lead to the reduced cost of existing compliance requirements which provided little or no additional protection for growers over existing legislation.
"CBH strongly agrees with Mr Ludwig that the transition to a fully deregulated market in bulk wheat exports will improve future wheat marketing arrangements and reduce costs to growers and exporters," Dr Crane said.
"It's CBH's view that the government's phased approach to full deregulation could be done more quickly, with both the abolition of WEA and the removal of a separate port access test for bulk handlers occurring from September 30, 2011 rather than in 2012 and 2014 respectively."
But Dr Crane also said CBH welcomed the certainty the announcement of the government's decision and timetable provided to the industry and the recognition by the government that general competition law was ultimately adequate to protect the industry against anti-competitive behaviour.
CBH also welcomed the government's acknowledgement that a "lighter touch" accreditation scheme should apply from October 1, 2011, to September 30, 2012, leading up to the abolition of the WEA.
Dr Crane said the grains industry needed legislative certainty to provide ongoing confidence in export market development and a solid basis for continued infrastructure investment in the industry.
The Productivity Commission's report recommended removing the Wheat Export Accreditation Scheme and also suggested WEA and the costly WEC, which underpinned the new marketing arrangements be dissolved by September 30 this year.
It said the benefits of accrediting bulk wheat exporters would "rapidly diminish in the post transitional phase, leaving only the costs".
Mr Ludwig said the government had carefully considered the final report and provided its response in due course and based on its consultation with industry.
