Recent attacks on the Single Desk by some Bulk Handling Companies – who have been pushing to start the Single Desk from port – show a misunderstanding of how the wheat marketing system works for Australian growers, according to AWB (International) Limited General Manager Sarah Scales.
Ms Scales said AWB’s management of the Single Desk started from the farm gate and extended to beyond the international customer.
“We manage the Single Desk as an integrated wheat marketing system that is designed to shape crop production, drive efficiencies in storage, handling and transport, and ultimately deliver a wheat product demanded by international customers,” Ms Scales said.
“All value generated in the process by AWB is captured and returned to National Pool participants.
“However, if the Single Desk was to start at port, that added value would be siphoned off by the Bulk Handling Companies for their shareholders – not to the wheat growers themselves – and that undermines the National Pool,” said Ms Scales.
Ms Scales said the Single Desk system currently provided growers right across the country access to international markets and the flexibility to deliver to anywhere in Australia.
Under the current management of the Single Desk by AWB, Australian wheat growers who deliver to the National Pool get the following benefits:
- Control of logistics and blending, allows AWB to manage the integrity of the product from the farm gate to the customer, ensuring customers receive the product they demand.
- Through AWB’s international customer access and direct link back to farm production we are able to pass on market signals to help shape the national crop and ensure growers are producing wheat products that the market demands.
- The ability to capture revenue for National Pool participants, by blending wheat qualities to meet customers’ needs.
- By acquiring grain up country and developing an understanding of grain volumes and movements, AWB is also in the best possible position to negotiate the best freight rates for that wheat. This allows AWB to select the most efficient distribution channel to the customers via the most efficient cost path.
“Starting the Single Desk at port will put at risk the operation of the National Pool,” Ms Scales said.
“In addition, AWB’s Golden Rewards program would be under threat, resulting in unclear and less equitable financial returns to growers.
“AWB has a duty to maximise net return to growers who deliver the National Pool unlike other traders and the BHCs.
“Bulk Handling Companies have not been able to prove any of their cost reduction claims and in the absence of this information it can only be assumed that these calls are being made to undermine the Single Desk and is all about increasing their shareholder value at the expense of grower returns,” Ms Scales said.