Wheat Export Marketing

The Federal Government introduced the Wheat Export Marketing Bill 2008 Wheat Export Marketing (Repeal and Amendments) Bill 1008, into Parliament on 29 May 2008. The Bill aims to establish a multi permit system for the export of wheat.

The Bill follows on from a pre-election commitment by the Federal Government to undertake reform to the wheat export marketing arrangements and the key aspects of the Bill are as follows:

• A new industry regulator, Wheat Exports Australia (‘WEA’), would administer a wheat export accreditation scheme, with the power to grant, vary, suspend or cancel that accreditation
• A new applicant must meet a number of tests, including that it is a ‘fit and proper company’ and it must be a corporation or cooperative;
• If the applicant operates a bulk grain port terminal, it must provide access to other exporters;
• The Government has committed up to $9.37 million over three years to assist with the transition to the new arrangements;
• The new system will be reviewed by the Productivity Commission in 2010.
• Severe penalties will apply for exporting wheat in bulk without accreditation, breaching accreditation conditions or providing false or misleading information to Wheat Exports Australia.
• Until 1 October 2009, accredited exporters operating bulk grain port terminals must publish terms and conditions under which they give access to other exporters.
• After October 2009, accredited exporters operating bulk grain port terminals must have an approved access undertaking with the Australian Competition and Consumer Commission.

The Association does not believe that the Wheat Export Marketing Bill 2008 provides Australian wheat growers with the confidence, clarity and certainty that is necessary in order to enable them to operate their businesses in an efficient and effective manner, particularly in view of the rapid introduction of the changes to wheat marketing as proposed under the Bill.

The Bill has the potential to create an imbalance of power in favour of non grower sectors of the value chain.

The Association has undertaken a range of activities in relation to wheat marketing in order to progress the Association’s policies regarding this important issue.

The Association’s wheat marketing activities in recent times have included:

• Rallies (Parkes, Narranderra);
• Member forums and meetings (Moree, Condobolin, Parkes, Young, Narranderra and Narrabri);
• Meetings with and letters to Federal ministers and Members of Parliament
• Media releases and media interviews;
• Grains Committee meetings and teleconferences;
• Survey of Members;
• Submissions to the Wheat Export Marketing Consultative Committee, Senate Committee Inquiry and Wheat Industry Expert Group;
• Key role in the formation and strong ongoing involvement in the Wheat Export Marketing Alliance;
• Letters to Members regarding Wheat Export Marketing Bills; and
• Letter to Branch Chairs seeking expression of interest for rally

The current Association policy as determined by Delegates to Annual Conference in 2007 and, more recently, by Executive Councillors at the Executive Council meeting held in Parkes in March 2008, is as follows:

Annual Conference 2006

That the Association support the current wheat single desk export marketing arrangement and its management by AWB International with:

a) improved corporate governance within AWB;
b) increased transparency and independence between AWB International and AWB limited;
c) the provision of data demonstrating an increase in grower returns prior to any decision to change the current structure and marketing arrangement.

Annual Conference 2007

That the Association:

a)  work with members, other state farming organisations, the Federal Government and relevant industry organisations to develop a new grower controlled entity before 1 March 2008 to manage the wheat export single desk which:
  i.  maximises pool returns
  ii  has access to a capital base which ensures high first payments and an  effective hedging strategy.

As changes result in Australia’s wheat marketing arrangements, NSW Farmers’ Association should engage with key industry stakeholders and government to support a broadening of government policies relating to the export of wheat so that these policies incorporate:

a) a long term view /benefit of the wheat industry;
b) a retention of the basic business benefits available to growers under the current wheat marketing arrangements;
c) support for pooling arrangements which are subject to strict public reporting requirements and which provide payment security;
d) need for greater transparency of commercial signals and information across industry;
e) a regulated wheat export system that requires exporters to operate within predetermined compliance and enforcement frameworks;     
f) an openly contestable export market for bags and containers;
g) a reduction of costs across the grain value chain; and
h) the provision of regular updates to members and requests for industry input for such negotiations.

Executive Council March 2008

That during the imposition of a multi exporter wheat marketing system the Association work with Government and industry bodies to make sure it is equitable.