McGauran grants wheat export licence to CBH

Federal Agriculture Minister Peter McGauran has granted an export permit to Co-operative Bulk Handling for the export of 500,000 tonnes of wheat to Indonesia, and to Wheat Australia, for 300,000 tonnes to Iraq.

They were chosen from the 46 applications received by Mr McGauran since he was given authority to veto wheat exports while the government decides the fate of the AWB's failed single desk policy.

The Minister told reporters today that he had been acting in the best interests of growers.

"This is, to a significant degree, a compromise between those who are passionate supporters of a single desk (system) and those who would want instant deregulation," he said.

To protect wheat prices, Mr McGauran said AWB would reduce the costs of operating the current wheat pool, while CBH and Wheat Australia were to contribute $4 to the pool for each tonne exported.

The CBH proposal had been opposed by WAFarmers President Trevor De Landgrafft, who condemned the CBH appplication as a cynical attempt to destroy the Single Desk.

While maintaining his concerns over a dismantling of the single desk program, Mr De Landgrafft today welcomed an end to uncertainty for wheat growers.

"The majority of growers wanted to market their wheat with the same legislation as they planted it with," he said.

It was a sentiment echoed by WA Agriculture and Food Minister Kim Chance, who said the CBH decision had severely weakened single desk marketing arrangements, which he called Australia's only defence in a massively corrupted wheat market.

"All things considered, however, Mr McGauran's decision is not as bad as it might have been and it shows some sign that the Federal Governemnt has recognised the value of our wheat marketing arrangements," he said.

"I welcome the fact that the decision will protect the interests of those wheat growers who have already committed their crop to the national pool."

The full text of an announcement from Minister McGauran's office is pasted below

Australian Minister for Agriculture, Fisheries and Forestry, the Hon Peter McGauran MP, announced today that he has granted 2 bulk wheat export permits.

Importantly, growers who deliver to the National Pool will not be affected, as the current Estimated Pool Returns will not be reduced as a result of this decision, for example the EPR of $242 per tonne for APW will remain the same.

"I have today directed the Wheat Export Authority to issue a permit for the export of 300,000 tonnes of wheat to Iraq by Wheat Australia and a permit for 500,000 tonnes of wheat to Indonesia by CBH," Mr McGauran said.

I have carefully considered all of the 46 applications received by the WEA. Taking all factors into account, I considered only these two applications to be in the public interest. This issue has been the subject of discussions by me with Senior Ministers in the Government.

"The permit for Wheat Australia will allow it to supply Australian wheat to Iraq, a market where AWB is excluded. Iraq is an important long standing market for Australia. The continued supply of Australian wheat into this market will be in the long term interests of Australian wheat growers."

CBH, a grower owned and operated co-operative, is offering Western Australian growers a price premium and will be able to supply Australian wheat to its mills in Indonesia. The majority of wheat available for export this year is from Western Australia.

"I wanted to make sure that growers who have already delivered to the National Pool will not be disadvantaged" Mr McGauran said.

"Therefore a condition of the export permits will be that both CBH and Wheat Australia contribute $4 per tonne to the National Pool for each tonne of wheat they export, up to the total of 800,000 tonnes.

"As part of these temporary arrangements, AWB has assured the Australian Government that this decision will not affect AWB's current EPRs. In order to achieve this AWB has committed to further reducing the costs of running the National Pool for the current harvest.

"The Australian Government has acted swiftly to process these applications under the temporary arrangements to give certainty to Australian wheat growers for this harvest," he concluded.

The decisions taken by the Government concerning this year's wheat crop have no particular implications for long term marketing arrangements.

The Australian Government will be consulting with growers in the next few months on future wheat marketing arrangements.