Liberal Party MPs who have wavered in their support for wheat export deregulation are defying the party’s free-market principles and the robust policy-making process employed on this issue.
Liberal Party MPs who have wavered in their support for wheat export deregulation are defying the party’s free-market principles and the robust policy-making process employed on this issue.
Four years ago, when the single desk for bulk wheat exports was abolished, most people in the industry thought the long-running debate over regulation was over.
The Pastoralists and Graziers Association, which had always championed free markets, celebrated victory.
Even WAFarmers, which opposed abolition of the single desk, moved on. Its focus now is on finding effective solutions in an already deregulated market.
The PGA and WAFarmers should carry a lot of weight on this issue, because their members – the farmers of Western Australia – account for most of the country’s wheat exports.
However, it appears their views are being drowned out by an east coast farm lobby that is seeking, with support from the ‘agrarian socialists’ in the National Party, to claw back more regulation.
Some Liberal MPs have taken the side of the interventionists in this debate, opposing a federal government bill that would continue the move towards full deregulation.
The Wheat Export Marketing Amendment Bill 2012 would, among other things, abolish Wheat Exports Australia, which was set up in 2008 as an interim measure to run an accreditation scheme for bulk wheat exporters.
The bill would also abolish a 22 cents per tonne levy on wheat exports and deregulate the activities of grain port terminal operators.
In effect, the bill would put wheat on the same footing as other rural commodities.
The PGA reacted furiously to the decision by some WA Liberal MPs to oppose the government’s bill.
With great flourish, PGA Western Grain Growers chairman John Snooke said this was a clear betrayal not only of their grain-growing constituents, but of the founding principles of the Liberal Party.
“One has to wonder if there are any true Liberals left in the Coalition judging from their decision to toe the National Party line and impose further regulatory control over the Australian wheat industry,” Mr Snooke said.
The PGA’s stance is based not just on principle. It is also based on the financial burden borne by WA farmers.
Mr Snooke suspects National Party MPs want to expand the role of Wheat Exports Australia, leading to an increase in the per-tonne levy, which is already disproportionately funded by the WA grains industry.
Labor introduced its bill only after the Productivity Commission completed a 2010 review of Wheat Exports Australia.
The commission wanted a move to full deregulation last year but Labor opted for a phased transition.
Grain handling and marketing cooperative CBH Group has endorsed the phased move to full deregulation.
CBH commissioned consulting firm ACIL Tasman to study the impact of market changes.
ACIL’s report found that the reforms to date, and the changes planned by Labor, had attracted a range of new services to the market from existing and new participants.
There has also been significant infrastructure investment and grain was being exported to more countries than under the old single-desk system.
“Growers have been the main beneficiaries of these reforms through improved services and more competition for their grain,” the report said.
“Export dependent WA grain growers in particular have in recent seasons established improved prices for their wheat exports when compared with Australian east coast growers.”
WAFarmers has decried the simplistic debate that often surrounds this issue.
It has always believed that Wheat Exports Australia should be subject to review, to assess whether it was delivering value for money.
WAFarmers believes other agencies, such as the Grains Research & Development Corporation, can deliver appropriate outcomes in a more cost-effective manner.
With the PGA, WAFarmers, CBH Group and the Productivity Commission all in favour of further deregulation, the opposition of some Liberal MPs is perplexing.
This is an example of good policy making, with the bill introduced after a thorough review and after a period for reflection and debate.
While Federal Labor has put forward many policies that have been hasty, poorly thought-out and fundamentally misguided, this is not one of them.
Its bill deserves the support of all sides of politics.
