What now for wheat sales?

The scandal over AWB’s major breaches of UN sanctions on Iraq has understandably led to major questions about the future of the single desk system used for all wheat exported from Australia. Like all political parties, the Democrats have supported the single desk arrangement, but I don’t believe it can be justified any longer. It is hard to see how the current arrangements can continue to deliver the best price for the average grower, and it is clearly disadvantaging some at present

That means that on this occasion, if the government decided on a course of action to reform the system, Barnaby Joyce would be unlikely to be to able block the changes, as I and other Democrats are prepared to support modifications in the Senate. Indeed the situation facing some growers in WA at the moment is fairly urgent, and I think there needs to be at least an interim solution found for their predicament.

There is a lot of tension within the Coalition at the moment over this question. Some Liberal Senators are proposing to introduce their own Private Senators Bill seeking to immediately allow AWB’s veto to be able overridden in West Australia, while Barnaby Joyce has said he will oppose moves to abolish the single desk in the Senate. This media release spells out our position a bit more fully.

At the moment, AWB has a veto right over any proposal to export wheat. The rationale is that a single seller is seen as being able to deliver the best price for the average wheat grower. This may well have been the case in the past, but frankly the evidence I’ve seen suggesting it is still the case is pretty thin, and there are certainly specific examples where growers who could have sold their wheat for a higher price were prevented from doing so by AWB. Whilst I don’t support moving to a totally unregulated market overnight, it is clear that the single desk cannot survive in its current form.

I don’t have any specific model I’m promoting. I am just acknowledging that there needs to be prompt reform, which should be done in consultation with grassroots growers. There are many different views amongst growers, including some who still believe the single desk is best. The nature of changes could be negotiated in conjunction with ongoing trade arrangements, so it doesn’t make sense to be too prescriptive.

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9 Comments

  1. There seems to be a discrepancy between the Government’s Upper and Lower House repsonse to questions on AWB bribe tax deductibility. Costello seemed much surer that an offence had occurred than Coonan.. he was able at least to quote a section of the Income Tax Assesment Act, whereas Coonan could only surmise.

    Are you following up on this matter?

    PS Now that ASIO are challenging the Scott Parkin Federal court verdict, I can see this story becoming a major pre-election test of civil liberties in Australia. I hope so.

  2. Andrew Bartlett:
    Top-to-bottom, everything about this whole AWB Circus has been about abolishing the Single Desk, nothing else.

    If we had a free press and if we were as comcerned about morality as we like to think we are, AWB would have been way down the list, below dodgy Defence procurement, telecommunications shenanegans, medical rorting, migration-for-cash rackets and a whole lot of other scandals.

    No Single Desk wheat sales, no AWB investigation; simple as that.

    As for the thirty-five warnings (and not counting what must have been hundreds of well-informed conversations among lower-ranking officials and employees) what more proof is needed that at the highest level, everyone connected with it was shonky?

  3. Can’t say I agree with that Graham, apart from your statement that
    “no single desk wheat sales, no AWB investigation” – although for different reasons.

    I think the structure of the single desk, with its monopoly powers, made it far more likely that corruption would occur. It gives absolute power to one group, with all its attendant risks.

    We can have a better structure which still ensures good returns for most wheat growers, rather than a few, while reducing the chances of rampant corruption getting a foothold.

  4. WEA – missing in action?
    This is copied from the Aust. Govt. Wheat Export Authority website.

    Roles & Functions

    The role of WEA Board Members is to:

    Appoint the Chief Executive Officer (CEO), set remuneration and conditions of employment and hold him/her accountable for corporate performance

    Review/approve strategic plans and enhance corporate culture

    Ensure policies/procedures and practices are consistent with the desired corporate culture

    Ensure policies exist on key risks, and are applied/reviewed

    Approve the annual budget/performance targets

    Monitor performance and corrective actions

    Approve major decisions

    Oversee audit process

    Review/monitor reporting systems to government

    Manage stakeholders’ interests, demands and expectations

    Review/assess its own performance and report to stakeholders

    Establish committees to assist in the effective operation of the WEA.

    What’s the good of it?

  5. Just a few questions, for anyone to answer, because I’m not too well informed about the mechanics of the AWB single desk arrangement.

    I’ve read that the AWB is a private company listed on the ASX.

    If it is a private company, is the single desk legally enforced?

    Does legislation name a particular private company, the AWB as the sole legal exporter of wheat in this country?

    And also some questions for Bartlett, or anyone else also.

    If a single desk did provide higher prices, wouldn’t farmers voluntarily form a single desk?

    And even if a single desk does provide higher prices for Australian producers, why should the wheat industry get special treatment, where many other industries do not?

  6. Andrew Bartlett:

    A national monopoly is not, of itself, a bad thing, especially on the rough-and-tumble of international trade. And it is certainly no more open to corruption than is a group of private firms; an effective anti-corruption system is always a good idea …. as is rigorous oversight of how people are recruited to work in the organization and how operations are carried out.

    My views are coloured by the spectacle of Australian firms and authorities slitting one another’s throats for the benefit and amusement of foreign monopoly, oligopoly and cartel buyers. Coal, leading edge technology, tourism, you name it, The Clever Country has sold it for a song.

  7. Are you sure about this, Andrew? In your media release you say that: “Study after study indicates that the interests of most farmers are no longer being served by the maintenance of the single desk and that alternatives need to urgently be explored. The Democrats will support changes in the Senate that bring benefits to wheat growers and our export earnings.”

    I’m not aware of any respectable studies that show that destroying the single desk will benefit most farmers. Of farmers themselves, something like 70 percent or higher want it preserved.

  8. Tony

    Changing the single desk from what it is now doesn’t mean shifting immediately to open slather.

    Personally, I am highly sceptical that a monopoly seller type arrangement will deliver best prices for the majority of wheat growers. But it won’t be up to me to determine the alternative system. I’ll support change, so will have a favourable attitude towards any proposals put forward by the government that has some support amongst growers.

    All I am really saying is that there is wider political support for reforming the single desk, so the future of our wheat export system does not need to be determined via backroom political deals influenced as much by managing tensions between the Liberals and Nationals as by getting the best outcome for wheat growers.

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