AWB deal prompts single desk review call

Pastoralists and Graziers Association of WA

WESTERN Australian grain growers have called on the Federal Government to bring forward a review of the single desk marketing powers of the Australian Wheat Board following its take over of Wesfarmers Landmark.

Growers applauded the takeover because it would speed the stand-alone status of AWB.

However, there is now need for an urgent review of the AWB single desk concession to clarify:

The benefits if any to Australian wheat growers from the AWB monopoly on wheat exports;

The unique supply chain and performance benefits that accrue to AWB via its powers to acquire wheat from growers;

How AWB will apportion its management and resources between Wesfarmers Landmark and AWB International, which has no staff and currently depends on AWB Limited for its expertise;

The potential for conflict of interest in AWB’s involvement in administering the single desk for wheat and its new involvement in the highly competitive farm service sector; and

The negative impacts of the wheat single desk on progress towards the US-Australian Free Trade Agreement.

There is also concern that the issue of 45 million new shares proposed by AWB to finance the Landmark acquisition will further dilute the equity of grower shareholders.

AWB was based on more than $500 million in capital funds, compulsorily acquired from Australian wheat growers and increasingly, it has been siphoning more and more funds from the wheat supply chain under its privileged position as sole supplier of Australian wheat to overseas buyers.

Just as AWB will now be involved as a competitor in the farm service sector, more and more grain growers are demanding the right to market their own produce to the highest bidder.

The AWB single desk power is also looming as a major anomaly and impediment to free trade negotiations with the US.

We would not want to see major opportunities for other Australian farm commodities lost because of an export monopoly we believe the AWB can no longer justify.

– Leon Bradley, Grains chairman