AWB today released its submission to the Wheat Industry Expert Group (IEG) regarding Industry Good Services (IGSs).
AWB Managing Director, Gordon Davis, said AWB commissioned a report by the Allen Consulting Group to provide independent analysis IGSs.
“The report titled, Industry Good Services – Wheat: Rationale and future options, identifies an orderly transition of critical IGSs to other grains industry participants under the new wheat export marketing arrangements,” Mr Davis said.
“The report is an objective analysis that identifies areas of potential market failure in the provision of these services and what options are available to provide these services in a more competitive wheat market.
“The report has identified and analysed those services that have been provided by AWB under the Single Desk arrangements. However, with new wheat export marketing arrangements to be in place before the 2008 harvest, the industry needs to determine what IGSs to take forward under the new arrangements.”
Under the current wheat export marketing arrangements AWB carries out the following IGSs on behalf of National Pool participants and the grains industry under the previous Single Desk arrangements:
- Wheat classification panel
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- Policy and regulatory advocacy
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- Australian wheat crop report
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- Promotion of Australian wheat industry
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- Industry strategic planning and execution
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The Allen’s report states – “With the foreshadowed move to an accreditation model for wheat exports, in which AWB if accredited will be potentially be only one (and not necessarily the dominant one) of a number of firms marketing Australian wheat, there is no economic justification for AWB Ltd to continue to fund the industry good services. For it to do so would put it at a disadvantage compared with other firms in the market.”
“The report also looks at the possible need for additional services that may be required under the new wheat export marketing arrangements to ensure fair access to supply chain infrastructure through the open and timely posting of wheat stocks and sales data in storage and handling, and transparency in shipping stems,” Mr Davis said.
“The report also considers the options for the provision of these IGSs based on different funding models to be determined by the Government and grains industry.
“The report states that there may be potential market failure in areas such as wheat classification and wheat receival standards. However, it concludes that these functions could be provided by existing specialist industry players such as NACMA or GRDC. AWB will continue to work with the Government and industry to assist Australia’s wheat industry in transitioning to the new export wheat marketing arrangements.”
View the Allen Consulting Report (PDF 829 Kb)
Media Inquiries: Peter McBride, 03 9209 2174 or 0417 662 451
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