24/01/2006 - 21:00

Wheat monopoly starts to unravel

24/01/2006 - 21:00


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I have never believed in the regulated monopoly powers of AWB Ltd or its predecessors.So it is perhaps unfair for me to use the appalling news of the Iraqi wheat scandal to add to the call for the archaic wheat export monopoly to be scrapped.

Wheat monopoly starts to unravel

I have never believed in the regulated monopoly powers of AWB Ltd or its predecessors.

So it is perhaps unfair for me to use the appalling news of the Iraqi wheat scandal to add to the call for the archaic wheat export monopoly to be scrapped.

It’s a bit like kicking someone when they are down, but it does make you think the two matters must be closely related.

If everything we are hearing is true, then perhaps there is proof in the old saying that absolute power corrupts absolutely.

While I always thought the wheat export monopoly was wrong, I never suspected it would lead to the kind of conduct that is being alleged. In fact, I would have thought a protected monopolist might not have needed such cutting-edge strategies as falling into bed with a dictator.

Of course, AWB is the worst example of its kind. A regulated market stranglehold left in the hands of a listed public company, it simply doesn’t work … and offers more ammunition to those who believe Telstra should be relieved of its network monopoly before it is fully privatised.

AWB had little credibility in the city; it would be surprising if it has much left in the bush after this.

If everything we read is true (I have to keep repeating that to myself because what I’ve read belongs in a novel), it will be difficult to believe AWB has done anything but act in the best interests of its executives for some time.

Do they really have the best interests of farmers at heart? I have never agreed with them on that front but I didn’t doubt their own belief, until now. It makes you wonder doesn’t it?

For those Western Australian growers whose efforts to export their own grain have been hampered by this big bullying monopolist, how bittersweet the past few weeks must have been.

To me, the real irony of all this is that the wheat monopoly was the non-negotiable part of the US trade agreement, a factor that left our trade people having to find other concessions.

Now, in all likelihood, this arrange-ment looks like ending without the advantage of trading off some of the US farm lobby’s own ridiculous and antique self-protectionism.

I say that because it’s hard to imagine the wheat monopoly remaining now.

What does it really gain?

A marginal upside for the price of Australian wheat, with the gains eroded by an organisation strangely corrupted by the twin forces of sanctity at home and fierce com-petition abroad. I am not sure there is a successful model, or justification, for this odd set of circumstances.

I say all this in due deference to my late “uncle”, a northern Wheatbelt farmer who told me grim stories of how badly farmers fared under a competitive regime where they took what they were offered at the farm gate, and worse.

But those days are gone.

The wheat monopoly might have served Aussie farmers well for the past few decades, but it’s time to move on. What farmers are not aware these days of prices and would be worse off if buyers were actually competing for their wheat?

Carpenter needs to build vision

A hearty welcome to new premier, Alan Carpenter, who, as far as the business community was concerned, was the only obvious candidate to take over from Geoff Gallop.

Mr Carpenter comes with working-class background and I am quite sure he is not naturally fond of business.

However, he is the last generation to live through major change – with Western Australia a vastly different place from those carefree but relatively economically austere times, especially in his home town of Albany, in the 1960s.

Business will remember Mr Carpenter taking on the teachers’ union a few years ago and respect the fact that he has taken his time to get a grip on state development and energy, both important roles in WA.

But tough decisions and understanding how the state works are not enough without vision. That is what he will need to enunciate in the near term. On this front, one development Mr Carpenter may also want to watch is the apparent increase of Brian Burke’s influence.

Mr Burke may have presided over a growth state in the mid-1980s (before things went pear-shaped for WA and he faced the courts) but it’s very hard to recall anything visionary from those times.


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