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You are here: Home Media Letters to Editors 3 September 2012 - Wheat Export Marketing Amendment Bill

3 September 2012 - Wheat Export Marketing Amendment Bill

Dear Sir
 
The Federal Government's Wheat Export Marketing Amendment Bill (the Bill) currently sits before the House of Representatives in Canberra. This Bill aims to further deregulate the wheat market, abolish the industry funded regulator Wheat Exports Australia (WEA) and replace port access undertakings with a voluntary code of conduct, which is not yet developed.
 
Assessing the impact of the Bill must start by identifying functionally what is and is not working in the market currently and then determining if the Bill fixes these problems without creating new ones. There is evidence of market failure in the export wheat market. The problems currently contributing to this market failure include ongoing issues around port access, stocks reporting and cargo integrity that have not yet been addressed adequately, operationally by the market.
Grain Producers Australia (GPA) has assessed The Bill on this basis. GPA found the Bill, as proposed, fails to resolve the problems in the wheat market and probably makes them worse.
 
The debate on the Bill and sensible evolution and reform of wheat marketing legislation has divided industry and politicians alike along old single desk / free marketer lines. The grandstanding about whether or not to retain WEA based on ideological rhetoric has entirely missed the point of how the Bill does or does not address the issue of market failure in the current export wheat marketing system.
 
This is particularly disappointing because identifying and addressing this market failure is the only legitimate role for government in the wheat market. The divisive and somewhat misleading media process around the proposed Bill fails to objectively inform the debate in this context.
 
For the record: GPA is not and has never proposed a return to any kind of single desk wheat marketing system. GPA is advocating WEA be redeployed to a more relevant role that addresses the ongoing operational issues in the export wheat market. WEA's current accreditation of wheat exporters should be modified to enshrine industry identified best practice for port access, stocks reporting and cargo integrity. GPA is also suggesting WEA should function more as an ombudsman with the capacity to investigate and resolve problems in the market as they arise.
 
Recent research suggests that growers could gain $2 to $3/t with greater public provision of wheat stocks information alone. If this were incorporated into the charter of WEA, it would deliver a 900% return on the 22c/t it currently costs to maintain the oversight function.
 
GPA is and always has been open to better solutions for wheat market oversight, but the proposed Bill is not a workable solution. GPA has no option other than to continue to oppose the Bill on this basis.
Grain Producers Australia is the peak body responsible for representing producers at the national level.
 
For more information please contact:
Pete Mailler
Ph: 07 4676 5112
Mob: 0427 265 707
 

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