Traders Seek Deregulation Of Wheat Exports
Sydney Morning Herald
Thursday February 6, 1992
A newly formed group of private grain traders have launched a push to deregulate the $2 billion export wheat market.
The Australian Wheat Board, a statutory authority, holds single desk selling status over the export market. The domestic market was deregulated under the Wheat Marketing Act of 1989.
The Australian Grain Exporters Association, which is making the latest push, represents the major private grain traders active in Australia. Membership includes Cargill, Louis Dreyfus, Conagra, Continental Grains, Richco, Toepfer, Andre and Lief.
The executive director, Mr Bob McCarthy, is a former head of the Australian Wheat Board marketing division. Mr McCarthy said removal of the AWB monopoly over wheat exports would be possible by 1993 and claimed the group could take half of the market within five years.
In the three years since deregulation of the domestic industry private traders have moved to control between 1 and 1.5 million tonnes of the 3.5 million tonne domestic market.
Mr McCarthy said the group intended to pursue deregulation vigorously.
"Australian industry is becoming increasingly frustrated with its inability to compete both domestically and internationally as a result of the multitude of statutory controls, inefficiencies and hidden costs that growers and other sections of the industry are unwittingly carrying," he said.
Mr McCarthy said the members of AGEA were large value-adding and agribusiness companies. "In many cases they have significant presence in the agricultural sector in value-adding and downstream processing," he said.
"They have made large commercial investments and they want the opportunity to make the same commitment to the grains sector."
The issue was thrown open at the Grains 2000 conference last September, when the Minister for Primary Industries, Mr Crean, indicated he wanted changes in the AWB and was prepared to consider the possibility of deregulation of the export market.
AWB chairman Mr Clinton Condon said maintaining single desk export status was paramount: "If we lost it we would have to sell at the maximum price to any market in any year, our reliable supplier position would disappear and there would be tremendous pressure on quality."
He said the members of the AGEA included some of the largest multinational grain traders in the world. "These are the traders who currently get millions of dollars of American and European taxpayers' money in the form of export subsidies to support their business."
Mr Condon said the traders wanted "the opportunity to get their hands on the most significant supply of white wheat in the world with a reputation for quality built up over 50 years".
"There are attractive incentives for international traders, but I don't see traders adding anything to the Australian industry."
Mr McCarthy said: "There are arrangements for the grain sector that don't apply to any other sector. It's an anachronism."
© 1992 Sydney Morning Herald