The early release of draft legislation on the proposed accreditation scheme for wheat exports provides growers, traders and marketers with clarity and confidence about the proposed arrangements for the next wheat harvest, AWB Managing Director, Gordon Davis said.
Mr Davis said the proposed wheat export marketing arrangements are very similar to the accreditation scheme for barley exports in South Australia which has been in place since July 2007.
“The South Australian scheme was implemented quickly and smoothly following the end of the Barley Single Desk and has been tried and tested in its first full year of operation,” Mr Davis said. “The South Australian experience should provide growers with confidence that a wheat export accreditation system can be fully implemented before the next harvest and that it will be successful.”
Mr Davis said that opponents of wheat export marketing reform need to be mindful about the outcomes for wheat growers if the new accreditation scheme is not in place for the next harvest.
“If the accreditation scheme is not approved in the Senate, wheat growers will be left in a twilight zone where AWB is expected to run a National Pool without the bulk veto and bulk export permits can be issued to other marketers and traders by the regulator,” he said.
“In these circumstances, AWB would have the responsibility to maximise returns to wheat growers but lack the ability to do so effectively. No responsible Board of Directors would agree to continue running a National Pool in these circumstances and in the current US sub-prime environment.”
Mr Davis said the proposed wheat export accreditation scheme provided the opportunity to introduce competition and choice with appropriate regulatory protections into wheat marketing and to lower the cost of AWB’s services to wheat growers.
“The former export Single Desk was gone once AWB International lost the power of veto over wheat exports under the former government and multiple bulk export permits were issued without any probity or prudential checks,” Mr Davis said.
“The most efficient and effective way forward is to have a prompt and orderly transition to the new wheat export marketing arrangements, which this legislation will do if passed by 30 June.
“Wheat growers should be comforted by the fact that key elements of the old wheat marketing arrangements will continue in the new marketplace including pools and estimated pool returns which will enable them to plan with confidence, secure finance and sell their wheat in a competitive environment.
“The key to successful implementation will be grower education and risk management support, an orderly transition of industry good services to government and industry providers, fair access to storage and handling infrastructure and grower protection from market power through improved transparency of pricing at silo and appropriate trade practices scrutiny.
“AWB will be making submissions on these issues to the Federal Government and the Wheat Industry Expert Group on Industry Good Services in the next few weeks to ensure that these issues are adequately addressed in the final legislation and that we can all plan for the next harvest with confidence.
“In the interim, AWB will fulfill all its contractual obligations in the remaining National Pools and ensure wheat growers receive their full financial entitlements.”
Media Inquiries: Peter McBride on 03 9209 2174 or 0417 662 451
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