A report by ITS Global on the impact of international trade reforms and regulatory changes on Australia’s wheat marketing arrangements was released today by AWB to inform the current discussions about the Single Desk.

“The ITS Global report is a balanced assessment of future directions that will help to inform current discussions on the future direction and possible reform of wheat marketing arrangements in Australia,” Mr Davis said.

The key conclusions of the ITS Global Report are:

• Further changes to Single Desk arrangements for marketing Australian wheat overseas are warranted, but they should be gradual and linked to the global trade reform timetable and structural adjustment within the domestic grains industry, to ensure wheat growers are globally competitive and financially viable.
  
• Change for change’s sake is likely to be counter-productive and rapid change of the Single Desk arrangements would incur high unintended costs for wheat growers, especially those 12,500 small to medium wheat growers in the eastern wheat belt of Western Australian, the Eyre Peninsula of South Australia and western New South Wales, who rely on collective marketing to sell their crop.
  
• Deregulation of the current Single Desk arrangements will not produce a contestable market for the sale of Australian wheat unless regional monopolies in grain handling and storage in Western Australia, South Australia and New South Wales are comprehensively over-hauled as part of a structural adjustment process.
  
• The Single Desk should be maintained under current arrangements long enough to give wheat growers time to adjust and the grains industry time to establish alternative marketing arrangements.
  
• The National Pool should therefore be allowed to manage through the current harvest (2006-2007) and the next harvest (2007-2008) and sell all the Pool wheat on international markets through the normal 18 month cycle (until 2010). This would avoid undue financial uncertainty and stress during the current drought and maintain critical high value markets in Asia and the Middle East, which would be targeted opportunistically by international competitors such as Cargill (which is a shareholder in Grain Corp), Archer Daniels, Louis Dreyfus, and Bunge.

ITS Global is a leading Australian consultancy on strategic policy issues relating to international trade, with global consultants have wide experience in trade law and policy, advising on tariffs, subsidies, technical barriers to trade, services, dumping, quarantine and dispute settlement. ITS Global has experience analysing trade policy for Australian business, private clients, governments and international organisations.

The Managing Director of ITS Global is Alan Oxley a global expert on international governmental and multilateral activities. Alan is a former Australian Ambassador to the GATT (predecessor to the WTO) and a former Chairman of the GATT, with extensive experience providing strategic trade advice to the Australian agri-business sector.

ITS Global Report (PDF 602 Kb)

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