Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

As I was saying in my earlier remarks, the Australian Greens have been looking  at these bills in light of the fact that changes are urgently needed to the way that wheat is marketed. As a result of the changes that the previous government introduced last year, it is essential that further changes are made to the way that wheat is marketed in Australia. While we would in principle support a single desk, the Greens do not believe that at this stage it is possible, given that it has no support from the government. At this stage the evidence to the committee also suggests that the farming community is not in a position to be able to establish it without government support.

The Australian Greens are aware of the struggles of those living and working in rural Australia and the fact that, in many parts of Australia, they have been subjected to years of drought and many are very worried about the consequences of further deregulation of wheat export marketing. These concerns come on top of many pressing challenges facing farmers in this country. We strongly believe in supporting the future of rural communities in a sustainable, holistic way, and we are concerned about the depth of concern in the community about this legislation. That is why we are pleased to see that the government has adopted the recommendation of the Senate committee report to provide some information sessions and financial counselling sessions on the new arrangements, to assist farmers. There was a great deal of evidence presented to the committee about the concerns farmers have about working in the new system once it comes into place. We urge the government to expand this program if it proves necessary. As I understand it, they will be providing funding for the first year. We believe that these resources will not be adequate and will need to be expanded. We urge the government to expand the program to assist farmers in this new marketing environment.

The Greens have tried to review this legislation in light of contemporary circumstances—that is, the government will not be introducing another process around a single desk, so we believe it is important that this legislation is fully scrutinised to see what issues and problems there might be with this further deregulation of the system. As part of that, we think that the government’s approach to the accreditation system is certainly a step in the right direction. Because of the problems that we had with the former Wheat Export Authority, we are extremely concerned that their remit was not wide enough and nor did they adequately use their powers at the time. We believe it is important to have an accreditation system for exporters, with oversight by an independent body. We believe this is much better than going down the path of complete deregulation. It is a midway point between complete deregulation and a single desk.

A number of important concerns were raised in the course of the Senate inquiry about the scheme and the provisions of the legislation, notably about the accreditation system and the role of Wheat Exports Australia, access to essential infrastructure and the availability of important market information. These issues were raised during the discussion of the legislation. We are pleased to see the government has responded, at least in part, to recommendations of the majority report of the Senate committee and has made a number of recommendations to the draft bills. These are all a step in the right direction.

On the accreditation scheme and the role of the WEA, we support the approach taken in the legislation to the accreditation process and the draft accreditation scheme, and we support the amendment to allow cooperatives to be accredited. That was an important issue that came out during the discussion of this legislation. The scheme moves to balance two interests: ensuring exporters meet certain criteria to be eligible and encouraging numerous exporters to be accredited. Some of the companies who would be seeking accreditation wanted more of the scheme set in legislation but some wanted the WEA to be a light touch regulator. What we need, however, is an effective regulator—which the old one was not. It did not have adequate terms of reference, nor did it actually exercise its powers. The critical issue is that the scheme provides sufficient certainty for companies and their clients and confidence for growers and the broader Australian community in our wheat export market. We favour a level of discretion for Wheat Exports Australia in administering the accreditation system and will be watching it closely to see that the authority exercises its responsibilities appropriately. What is absolutely vital to the effectiveness of the accreditation process is the role and function of the WEA. The key lesson from the AWB oil for wheat scandal is that the WEA not only needs to have sufficient powers to investigate the activities of exporters; it also needs to use those powers where appropriate.

The WEA has a range of powers under this legislation: information-gathering powers from wheat exporters and other persons who may have relevant information, the power to direct an external audit of exporters and powers to suspend and cancel accreditations. We note that the minister said in his second reading speech:

Wheat Exports Australia will regularly review the financial conditions, and activities, of accredited exporters to make sure they are complying with the conditions of their accreditation.

We expect WEA to undertake this role actively and not merely rely on annual reports. We would urge anyone who has concerns about an accredited exporter to take those concerns to the WEA. Creating an appropriate regulatory culture within the new regulatory body will be a critical role of government. The government has an important task in choosing the WEA board to ensure there is sufficient expertise and skill to fulfil these vital oversight and regulatory functions. One of the other lessons from the AWB scandal concerns the responsibilities of the minister. There can be no more turning a blind eye to any problems that arise. The minister has powers of investigation that must be used if circumstances require it.

There was a great deal of discussion on the access regimes during the inquiry. One of the aims of the legislation is to encourage a competitive market with numerous exporters competing for wheat from farmers. Concerns about access to important infrastructure need to be addressed to ensure that that aim is met. Serious concerns were raised in the committee hearings about how to ensure non-discriminatory access to both port infrastructure and up-country storage and handling infrastructure. Without some form of regulation, there is a fear that regional based monopolies will form around the companies that own the infrastructure and will not also be exporting wheat.

The legislation as it stands provides that owners of port infrastructure must pass an access test which, after 1 October 2009, will require either an access undertaking under part IIIA of the Trade Practices Act or recognition under the Trade Practices Act of a state access regime before they can be accredited as an exporter of bulk wheat under the act. Concerns have been raised by owners of such infrastructure that the proposed access test is too heavy-handed and will create a disincentive for investment in such facilities. The Greens support the need for a strong access test for port infrastructure but are prepared to look at a process that, while maintaining strong access, may make it easier to ensure that prices and access are fair. The government has decided not to pursue a similar requirement for owners of up-country bulk handling and storage facilities. This was also an issue that came up extensively in the hearings. Non-discriminatory access to up-country storage and handling facilities was one of the key concerns raised during the committee hearings. The Australian Greens support the comments of the majority committee report on this issue, which read:

The committee believes there is a need to ensure effective competition in relation to access to up-country infrastructure. The committee supports additional measures in relation to up-country infrastructure, such as a mandatory code of conduct.

We are disappointed the government has not moved to introduce some form of regulation to ensure access to up-country infrastructure. The Trade Practices Act, while offering some protection in terms of anti-competitive behaviour, was widely seen as having too many practical problems. Small exporting companies and some farmers expressed concern that the Trade Practices Act processes were too lengthy and costly to provide adequate protections, and many such companies and individuals may be unable to mount the necessary legal actions to ensure fair and timely access—the word ‘timely’ here is crucial. We would have liked to see the bill include a mandatory code of conduct process for owners of up-country infrastructure who also wish to be exporters. The voluntary code of conduct presented by three bulk handlers to the committee was inadequate. But a code with legislative force linked to the accreditation scheme and that refers to the experience of the ACCC and includes a binding arbitration process would, we believe, support the aims of the bill.

We do note the minister’s words:

The government will, therefore, continue to monitor the ability of exporters to access up-country storage facilities.

Let me say here, if any problems are identified then the government will take steps to remedy the situation including, if necessary, the development of a code of conduct.

Let me say here, the Greens—and, I am sure, many stakeholders in the industry—will be holding the government to account for that statement. It is absolutely critical if this process is to work. We expect access issues to be a key consideration of the proposed review of the act and the scheme.

Another issue that came up extensively during the committee hearings was information. The point was made that information is essential for fair functioning markets. As the committee notes:

The committee observed that a consistent theme throughout the inquiry was the importance of the availability of reliable and timely information and effective price signals is of central importance to the success of the proposed changes ...

In partially deregulating the market, there needs to be a mechanism for all stakeholders to have equal access to essential information about wheat stocks. The government has announced such information will be available to the industry via a monthly report prepared by ABARE, based in part on information collected by the ABS. I will refrain from making extensive comments about some concerns I have about ABARE and the reliability of the information it provides. Nonetheless, this is an issue that is of vital importance to the success of these amendments and this new process. Again, the Greens will be watching the effect and the provision of this information very closely. We expect the government to be prepared to respond to any problems that arise in relation to the accuracy or delivery of the necessary information, and, as I said, we will be watching this extremely closely. The government will need to be ready to act, we believe, with a sense of urgency if the processes they put in place are failing.

As I articulated earlier, the Greens’ position, in principle, is that we would prefer a single desk—in an ideal world. That is not going to happen. We therefore have listened to all sides of the argument through the committee process and through individual representations made to us, and obviously we will also listen very closely to this parliamentary debate. We have decided, on balance, that the changes with the necessary protections will in fact be an area that will need to be carefully reviewed and agreed with the review process. We do have some concerns that the government has not adequately addressed the concerns of farming organisations and individual farmers around access and also the concerns around regional monopolies developing. We will all need to watch—and I am sure the farming community will be watching—the implementation of this particular piece of legislation very closely. The future of wheat farmers in this country is at stake here. We need to make sure that we get it right.

Ruth Webber (WA, Australian Labor Party) Share this | Link to this | Hansard source

The Wheat Export Marketing Bill 2008 and the Wheat Export Marketing (Repeal and Consequential Amendments) Bill 2008 outline new arrangements and the legislation comes to this place after an extensive consultation period has been completed. This has included the release of the exposure drafts for public comment, the Senate Rural and Regional Affairs and Transport Committee inquiry and report and the Wheat Industry Experts Group’s consideration of the delivery of industry development functions.

In addition to that, the Minister for Agriculture, Fisheries and Forestry, Mr Burke, has also had constructive discussions with all of the major state farming organisations and major bulk handling and trading companies. The government has conducted several detailed private briefings with each of the state farm organisations, as well as a significant number of non-government members and senators. There has been detailed discussion around these new arrangements. Most in this place and the other place have agreed that there is a vital need for new arrangements. The old system was broken. It had ceased to work, and it was actually a public embarrassment to Australia.

The government, after this extensive consultation process, outlined these new arrangements in the legislation that we have before us today. The new arrangements, as has been said by others in this debate, are designed to benefit the entire wheat industry—which I have got to say, as a representative of Western Australia, is a very good first step. It is designed to benefit the entire wheat industry, particularly the growers, by providing greater contestability and selling options for growers, more cost-efficient marketing services and greater transparency of price and cost information, and by reducing the risks associated with relying on a single seller.

If you had any doubt about the problems we faced under the old arrangements, Mr Acting Deputy President Murray, you only had to come to our home state of Western Australia. Not only have these new arrangements been arrived at after detailed consultation but, as Senator Minchin mentioned earlier, they provide a relaxation of the regulations around the bulk export of wheat. Coming from the state that, I believe, has the most efficient and most export-oriented wheat farmers in Australia, I believe this is a reform that is long overdue. Most of the wheat production in my home state is for the export market, not for the domestic market, and we did not necessarily feel very well served by the previous regime. In fact, there were some notorious Western Australians involved in the demise of the previous regime, which was not helpful.

As has been outlined by others, this legislation establishes a new industry regulator, Wheat Exports Australia, with the power to develop, amend and administer an accreditation scheme for bulk wheat exports. Whilst WEA will be given the power to administer the scheme, it will do so under broad policy parameters set out in the legislation before us. WEA will only accredit companies that meet stringent probity and performance tests. WEA must consider criteria such as the financial resources available to the company concerned, its risk management systems and the demonstrated behaviour of the company and its executives—a reform, I would say, that no-one in this place should argue against.

In considering the lengthy consultation process that has been undertaken by the government and by the Senate Standing Committee on Rural and Regional Affairs and Transport in arriving at this legislation, I would like to place on record my thanks for the hard work of the members of the committee, particularly that of my good friend from Western Australian Senator Glenn Sterle as chair of the committee. Senator Sterle came to this place with a passion for and belief in rural and regional Western Australia, but I think the issues surrounding wheat farming in rural and regional Western Australia were new ones for him. I congratulate him on the open mind that he brought to the challenge and on the conduct of the inquiry.

It is not often when considering issues in this place that I find myself on somewhat of a unity ticket with Senator Judith Adams on issues to do with social policy. And it is not often that I find myself on a unity ticket with Senator Judith Adams, the member for O’Connor in the other place and the state leader of the National Party in my home state of Western Australia. All of us agreed on the need to reform the previous regime and that the single desk arrangements were not serving the wheat farmers of Western Australia well and therefore were not serving Australia’s wheat exports particularly well. As I said, I am firmly of the belief that the Western Australian wheat farmers are the most efficient and effective wheat exporters in Australia. That we had in place under the previous regime arrangements that acted to their disadvantage is something that has needed to be addressed for a very long time. So perhaps from time to time this place does operate as a states’ house. Perhaps the unique view that those of us from Western Australia, across the various political viewpoints, bring to this place actually does have some effect and we manage to bring forward, as I said, an unusual unity ticket.

Wheat Exports Australia will have the necessary investigative powers, including the ability to require information of and audit accredited exporters to perform its regulatory, monitoring and enforcement responsibilities effectively—again, a very important reform. There will be severe penalties for breaching the conditions of the scheme or individual accreditations. Wheat Exports Australia will also be able to suspend or revoke accreditations.

This legislation contains an appropriate balance, in our view, between the need to apply strict probity and performance tests to protect the interests of growers and the need not to apply an excessive regulatory burden on accredited exporters. We can allow those who play by the rules, who are ethical and who are acting in the best interests of our efficient and effective wheat growers to get on with the job at hand, which is to get the best price possible for the product and to export as much as possible.

As I have said, extensive consultations have been undertaken both by the minister and by the Senate committee, but I accept that with any new arrangement not everyone is going to be happy. Any change to what has been an entrenched policy for a very long time can be very threatening to a lot of people, and I understand their concerns. It is my belief that these new arrangements will not act to the disadvantage of any successful, entrepreneurial, effective and efficient wheat farmers anywhere in Australia. What they will do is allow those who are the most effective, efficient and export-oriented to get on with the job in the best possible way: to market the product, to go straight to export, to export in the most effective way and to provide the good, consistent quality of export grain that we know we can in Western Australia.

For far too long for those in Western Australia who are very close to the export markets there has been the nonsense arrangement that we have been governed by the needs of wheat farmers from this side of the country, the eastern seaboard. Everyone has an important role to play in the production of wheat in Australia; there is no doubt about that. Each and every effective, efficient, hardworking farmer has an important role to play. But it is a nonsense to say that the most effective, efficient and export-oriented of all the farmers should be governed by the needs of their compatriots in New South Wales and Queensland. We do not do that in any other sector of our economy. We do not say to those involved in other export-oriented industries in Western Australia, ‘You must be cognisant of what New South Wales says before you can export anything.’ We actually say: ‘Good on you. As long as you comply with the law of the land and you have access to the market, go for it, do the best you possibly can.’ This is what this legislation is about. It is about putting in place a regulatory framework that protects the markets and makes sure we redress some of the bad image we have had in the recent past but allows those who are the most effective and efficient to get on with the task at hand. I will conclude my brief remarks by again congratulating Senator Sterle and the rest of the committee but also by acknowledging the important roles that Senator Adams and Mr Tuckey have played in bringing this matter, and the uniquely Western Australian perspective, to the parliament.

Nigel Scullion (NT, Country Liberal Party, Shadow Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

Madam Acting Deputy President, I rise today with some disappointment. The Wheat Export Marketing Bill 2008 and the Wheat Export Marketing (Repeal and Consequential Amendments) Bill 2008, as you and other people in this place would be aware, have attracted a great deal of attention. Those who were in this place early this morning would have seen firsthand the passion of those people who do not support the legislation—and, I am quite sure, through some of the Senate committee hearings. I would like to add my congratulations to Senator Sterle for having had such an even-handed approach to a very difficult task.

Australia has had a single desk wheat marketing arrangement that has served the Australian wheat growers well for over 65 years. It has been a system that has in effect ensured that a proportion of profits and efficiency dividends post farm gate has ended up back with the growers. The fundamentals of any single desk system are the principal producers—those people who lie at the heart of the wheat export system. Without the growers, without the producers, the wheat export system would of course not exist.

Changes to the arrangements have been resisted every single time. Over the years there has been a great deal of change to the single desk system and it has been diluted by further elements and deregulation. Every time deregulation has occurred, I think it would be reasonable to say, from a grower’s perspective, the world has become a little grimmer. This last act of deregulation, in this legislation, will again strip any benefits that are delivered through the arrangement, and we cannot see anything in this legislation that will replace them.

I want to make sure that everybody in this place understands and I want to make it absolutely clear—and I would like to commend Senator Minchin for his words; at least he is saying it the way it is—this legislation does not create a new single desk. Let us not pretend that the Labor Party is in any way right in saying, ‘We’re honouring our obligation; we’re creating a new single desk.’ This is a special sort of a single desk: a Clayton’s single desk. It is a single desk for traders, not for wheat. But I guess it is all in the semantics, isn’t it, Madam Acting Deputy President?

This will simply and purely be a licensing regime that will allow multinational wheat traders to enter the Australian market. The creation of Wheat Exports Australia will simply triage those people who wish to enter the market. There will be some probity issues to ensure they are the right sort of people to be in the game; some financial issues will be looked at. Of course, looking at the financial issues gives absolutely no guarantee whatsoever that when someone parts with their wheat they will ever be paid for it. In terms of the probity issues, I think the new minister set quite a serious precedent when he decided that the organisation Glencorp was a really good dog straight out of the box. That was their first decision.

Unfortunately, many will rue the fact that the genesis of the scrapping of the single desk was a mistrust of those people associated with the AWB. We are all aware of the circumstances with the Cole inquiry. But, when you have that level of mistrust, why would you throw the baby out with the bathwater? It is an overreaction and we should never have ended up in this place. Anybody that read the Cole inquiry report would know there was a whole suite of other arrangements that we could have put in place that would still have managed to give a much better balance than the legislation we are looking at today. In light of that, I do not think the very first decision on a new licensee being Glencorp—who were well known to have been involved in rorts throughout, not only in the oil for food scandal but in other United Nations programs—has given anybody any comfort that anything will change in the future.

Labor would have Australians believe that the single desk has created some sort of an impediment for growers to receive the best terms for their wheat. Of course, the facts are completely the opposite. Whilst Labor believes the single desk arrangements are worthless—or, worse, a cost to industry—our international competitors in the marketplace have an entirely different view. It is interesting, because those international players, our competitors, have no reason to offer a different opinion in the media. They have no real mischief to make by offering this different reason. But it is interesting to know that, during the negotiations for the Australia-US Free Trade Agreement, the Americans fought extremely hard to ensure that the single desk arrangements in Australia were part of the currency so that we could trade these things off. I wonder why that was! Quite clearly they saw it as something that benefited Australian growers, not United States growers. That is why they wanted it there as currency—a very, very important issue. Of course, we opposed this then for the reason that the single desk allowed us to some degree to compete against subsidies and what I have to say is a less than open and free wheat trade. While the subsidies are worth millions, the single desk is a collective marketing arrangement to give us some sort of capacity to counter the trade distorting influence that the subsidies deliver.

If the single desk was worthless or a detrimental factor to Australian growers competing internationally, as described by those opposite, why was it that the US wheat trade group was one of the very first bodies to come out and welcome the abolition of the single desk and the Labor legislation? On 6 March of this year, the US Wheat Associates President, Alan Tracy, said that the Australian system will lead to a genuine opening and his group is very pleased to see that—no surprise there. They are most delighted, absolutely delighted. As you can imagine, this is their wildest dream come true: the jewel in the crown of legitimate marketing arrangements in Australia that ensure that we can compete against this distorted market and the subsidies is being taken away and, not only that, they are giving it away. This is a fire sale. No longer are they going to say: ‘Please, can you bring the single desk to the Doha Round so that we can negotiate that with you? Maybe we can trade away some of our subsidies.’ No: you can have it for nothing. There will be more corks opening in the United States tonight than there will be on the other side. It is a genuine tragedy that such a great thing for Australian growers has been let go at an absolute discount price. It is completely irresponsible. To give away such a significant concession and gain nothing in return is bad policy. It is obviously good for our competitors but very bad for Australians.

It is worthwhile pointing out a number of the historic benefits of the single desk—the way the numbers appear to be going here they will be historic. First of all there was the premium price. It does not matter where you look; a whole range of surveys have been conducted as to whether, for example, it is part of the competition policy. There is a whole suite of them. I understand from the Speaker in the other place that there is everything from $5 a tonne to $70 a tonne, but whatever it is, it is a positive number; it is a benefit in terms of the premium having a single desk. Whilst Mr Rudd is not a chap who I would often go to for economic advice, I would like to quote a letter from the then Leader of the Opposition in which he made the argument that we have to hang on to the single desk because it has a great deal of economic feedback for the growers. Mr Rudd quoted a study from Econtech and stated:

... on the premium attributed to the single desk, that indicates that on the benchmark of Australian premium white grade for wheat, the single desk captures a premium of between $15 and $30 a tonne. The total annual value to Australian growers of this premium on Australian premium white is $80 million. On all grades the average premium attributed to the single desk is $13 a tonne and the total annual value of the premium on all grades is $200 million.

That is the now Prime Minister saying, ‘Look, there is great value in the single desk. It ensures that there is a better return of premium to our growers.’ As I said, he is not someone I would normally seek economic advice from, but he certainly put that forward. And Econtech, who are a very reputable organisation, have ensured that we understand completely that when we walk away from the single desk arrangements we are taking that premium off growers. Make no mistake about it: growers will be worse off under this legislation. There is a common thread; this legislation is not about growers. Interestingly, I think the word was only used three times in the entire legislation, because this is not about growers; this is about those people who are further up in the food chain—the larger sharks. This is about looking after our mates in the United States and about looking after multinational companies. I think that is a common thread. I recommend that all other senators have a careful look at this legislation, because it is not about looking after growers; it is about looking after people who seek to make more profits out of their enterprise.

One of the principles has always been that the single desk was, in effect, a buyer of last resort. Subject to quality, Australian growers were always guaranteed that any wheat that had been harvested would be bought or sold by the single desk operator. This is most important, particularly in big harvests when there is a carryover. People can quote certain years and say that it will not really matter. Perhaps in some years it will not, but over time we are going to have large harvests, we are going to have a carryover and we are going to have new wheat in the market as well as the wheat from the year before. When we had a single desk, the single desk arrangements were able to ensure that the returns to the growers, under both of those circumstances, benefited the growers. Of course, under the new arrangements there is no requirement for any trader to take any more wheat than they have an immediate customer for, and there is no way of selling a carryover crop when there is a new grain harvest to compete with. I certainly do not think that that suits growers. Again, the common theme is that that does suit the traders because they do not have any obligation to the growers. The growers finish at the gate. ‘See you, mate. Good luck. Now we are going to go and do the business; we are going to get into the blending.’ Of course, the blending will no longer have any real benefit to the growers. If you understand wheat marketing, the blending is where the money is made. Sorry, growers; I know you used to participate in that, but this is not your business anymore. The profit business is now all about the traders, and the traders must be loving this tonight.

As I have said, a number of growers are pretty disaffected with the legislation before us tonight. They used to talk to me about security. I asked them, ‘What do you mean by security? What sort of security?’ They said, ‘Well, you don’t really think; you just go and grow a crop. With the sort of inputs you’ve got today, you’ve got to go and borrow a bit of money. We have crop financing and it’s the security of crop financing.’ With a single desk—with the circumstances today—you can actually have an estimated price in advance. You can go with that estimated price to a bank, and it is a bankable asset. The bank will say, ‘How many acres? This is the approximation; this is your estimated price, so I will be able to forward you that money with a level of confidence in a process that has a lot of convention.’ Over a lot of time it has proved to be financially and ethically decent. It is a good process that has been going for a very long time. Of course, you can imagine that today, with the skyrocketing inputs that our grain and food producers in Australia have to deal with, it makes trying to get crop financing a very complex issue. Not being able to have that absolute guarantee of an estimated price will make it a lot harder. Without that guarantee, the growers will have to bear all the risk of growing the crop, and it will place a further burden on an industry that has not been burdened in this way for some 65 years—and, frankly, today that should not be necessary.

There has been a lot of debate about the growers’ sentiment: who are you supporting? I acknowledge and we recognise and respect that our colleagues in the coalition have a different view from us on this matter. It is interesting that when you move around the community, and if you are on a committee, you recognise quite clearly that the industry and the communities are split on this matter. I respect their views on that. In the coalition, yes, we are split on it, but at least we respect the wider community’s views and values.

An overwhelming number of growers—about 70 per cent—wish to keep the single desk and the remainder do not. Whilst I wish well those who do not support the single desk, and I respect their views, it is the view of the National Party that we would always support the majority of growers. It is interesting that that is not only our view but also the view of the Prime Minister, Mr Rudd. Again, in a letter to growers, on 8 February last year, he said:

Labor will continue to support the single desk while we are convinced that there is strong economic value in the single desk for growers and the Australian economy ...

And he did a very good job of pointing that out to us a minute ago through the Econtech report. He has built a very succinct argument that we have certainly got the economic value there. He also said that Labor would continue to support the single desk while ‘it retains the support of growers and the community’. The Prime Minister has built a great argument. He said: ‘There’s the economic value; we’ll hang on to it,’ and ‘Whilst it maintains the support of growers, we’ll hang on to it.’ Unfortunately, he has walked away from that. The government are on the record as saying that they are strong supporters of the single desk and that it remains Labor Party policy while ever growers support it. Growers still do support it, so I do not understand—and nor do the growers—why the Labor Party are now moving away from what was intrinsically an absolutely fundamental part of their policy.

So what has changed? Labor are refusing to poll growers. Instead, they are forcing this flawed legislation through against the wishes of growers. But I think everyone accepts that you do not have to poll them—there is no point. Everybody knows—whether it is the Ralph review or just simply the people who have turned up here today—that, right across the board, we are split. But 70 per cent of growers believe that it is very important. We cannot support a bill that goes against the wishes of growers. We cannot support legislation that is designed to allow multiple multinational companies to enter the market with the sole aim of making money out of the trade. That is a very laudable outcome. I love making money. I love to support businesses that make money. But it is all about getting a decent share. Do the growers get any benefit from efficiency dividends and profitability past the farm gate? Not from this night onwards. This money should be retained by growers or reinvested into the industry, as is the process under the grower owned and controlled single desk.

Labor said that they had a plan for Australia’s wheat marketing, but I think they just had an idea. As we often have, in this case they will learn that a thought bubble is very hard to transfer into legislation that works. There will be a great tragedy here tonight. I hope I am wrong, and I know those on the other side are hoping the same, but I think most growers in this country know that this aspect of deregulation will mean that growers will be worse off than they are today. That is why we are not supporting this legislation.

The warning bells over this legislation started to ring loudly when both the Western Australian and New South Wales ministers for agriculture said, ‘Pull up; slow down. This needs to be given more thought.’ The Wheat Export Marketing Alliance was fantastically and courageously put together by Mr Blight, but what did the minister say? He said, ‘Sorry, we’ve got a fundamental approach to this. That wasn’t a Labor election commitment.’ It does not matter what your Labor commitment was; this is bad policy. There was an opportunity for the minister to take advice from industry leaders and come up with another approach, but he gave it short thrift on the basis of, ‘That’s not part of our policy.’

Today we had the second protest rally of growers here in Canberra. I am not really sure what we are going to tell them in the future, but at least we can say that we tried. I wonder why the government does not care about them. They are not just growers. They are communities. They are women and children. We saw them here today. They are genuinely concerned about their future. Are Labor really interested in supporting the wishes and aspirations of those people who want to make money out of the growers—the traders and the bulk handlers? This legislation seems to indicate that that is the case. The Nationals will not support this bill, and we urge all senators to think long and hard about who should own and benefit from this industry. What I and the National Party want to do is maximise the return to growers—not to multinational grain traders.

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

There are only a few minutes to go before the dinner break, so I will just speak initially to the Wheat Export Marketing Bill 2008 and the Wheat Export Marketing (Repeal and Consequential Amendments) Bill 2008. As I think all speakers on the legislation have noted—including Senator Scullion, who has just concluded—there are different views amongst the community. There are different views amongst growers and amongst and within most political parties. I think the fact that the Senate has been able to examine the issue in some detail and work through those differing views via the Senate committee process is a tribute not only to Senate committee processes when they work well but also to those senators who have sought to engage constructively on what is a heated and complex issue. There are a lot of different stakeholders with respect to this and it is an area where there have been significant changes and there is ongoing change—social change and economic change—at a local level, a national level and an international level.

It is certainly the case that the Democrats in the past have tended to support single desk arrangements, both in this area and in others. That is a position that I do not believe is sustainable any longer. I do not say that to criticise the position that others have taken in the past but simply to examine the situation as it stands now. I do not believe it is the case—as far as I can see from looking at all the evidence—that the majority of growers will be worse off with the scrapping of the single desk. It seems fairly clear to me that the changes that are put in place through this legislation are not likely to be the last word with regard to wheat marketing arrangements and wheat exporting arrangements. I have absolutely no doubt that there will be a very strong examination from all quarters about how these new arrangements operate, whether there are unintended consequences and whether there should be further modifications—and that is as it should be. But I think it is fair to say that, if and when these changes are passed, while there may be further changes down the track, they will not be changes that see us go back to a single desk arrangement. I say that not just because of the specifics surrounding the wheat industry at the moment or in the foreseeable future but also because, if we look at the other single desk arrangements with other products that have become part of history over the years, I think in many cases it has been shown that the sky has not fallen in.

Continuing my remarks on the Wheat Export Marketing Bill and the related bill, as I was saying before the dinner break, with many other commodities in Australia in the past, we have had single markets operating. Over time, all of those single-desk arrangements have been phased out or removed, and the sky has not fallen in. I do not believe that the sky will fall in on this occasion with the passage of this legislation. As I also said before the break, I do not believe that the majority of growers will be worse off with the abolition of the single desk. Indeed, it is quite clear—it is one of the reasons why quite a significant number of growers do support this legislation—that some growers have clearly received less for their wheat as a result of the single desk than they otherwise would have. That is an arrangement that had some historical justifications for it, but I do not think it is justified any longer.

There is a diversity of views on this, as I said previously, across all political parties. Not all people in the Democrats agree with the position that I take in regard to this—that the single desk should be abolished. There are differing views undoubtedly and clearly within the Liberal Party and within the Labor Party. I am sure that there are some, indeed, within the Nationals who do not actually agree with the position that that party is taking. Whilst the scandal over the activities of the AWB may have been the catalyst for the breakdown of the single-desk arrangements, I think it is wrong to suggest that that is the only reason why the single desk is being abolished. The time had clearly come for a change in the arrangements in this area. If that was a catalyst for moving forward then so be it. But I think it is actually a positive outcome and will produce, over time, better results and better income not only for the majority of growers but also for others that are involved in the process of wheat exports and wheat trading more generally.

I think it is important to focus on the impact on growers and on all of those that are involved in and affected by the wheat industry and the impact on Australia’s export earnings rather than getting too far into being sidetracked by some of the political points that could be scored backwards and forwards. I do not seek to do that in this debate, but I do think there are some broader philosophical issues that come into play here. The situation regarding the wheat industry has changed over the years, and attitudes and views about agricultural sectors have also changed over the years. My views have changed over the years. As I said prior to the break, the position of the Democrats in this chamber has traditionally been to support not just single-desk arrangements in wheat but also other single desks and similar types of arrangements that have existed in the past. I certainly have modified my views over time and I think there are quite strong arguments for it being in the interest not just of growers but also the Australian economy and, in some significant respects, better environmental management. We actually have more opportunity for competitive markets and for the incentives for investment that come from having those competitive markets. That does not necessarily mean a laissez-faire law of the jungle arrangement, but it certainly means moving away from the sorts of constrained markets that occur under a single desk.

We have seen and at the moment are seeing—I note that Senator Joyce is following me on the speakers list; I am interested in hearing his views about this—debate about the future relationship between the National Party and the Liberal Party in my home state of Queensland. Perhaps it is just as well that this issue is out of the way before the proposed merger occurs. I saw reports of Senator Joyce talking about the nature of the Nationals, at least in Queensland, and calling them—apparently without irony—‘agrarian socialists’. I had always thought that was an ironic label, but perhaps I was mistaken. To some extent, it shows me some of the problems with what I would see as the dated approach that the Nationals are taking on this particular piece of legislation. I am not saying they are being insincere in their approach by any means, but I think it does not recognise the problems that go hand in hand with that.

Without getting sidetracked, I see Senator Mason in the chamber. I almost feel a bit of inspiration to start attacking the lefties and the socialists, as he has done year after year. As I said, I think the phrase ‘agrarian socialist’ is actually an ironic label, so perhaps Senator Mason was also being ironic in the past when he made those many speeches. But I think the broader thing that comes forward under that particular label is the inherent assumption of reducing the potential amount that can be made through the operation of a more free-flowing market and trading that off, if you like, with the safety net—people might not earn as much, but at least people will all know what they are going to earn. That, to me, seems to be one of the key issues in this particular debate. Certainly it is handy to have a clear idea of what the price is going to be; but, if that is at the cost of providing the opportunity for people to explore getting a higher price, it does not seem to me to be a particularly helpful arrangement in the longer term for an industry, for an economy and for the wider community.

We need to ensure that we do not adopt an arrangement that maximises a private approach when there are profits to be made and that maximises regulation when there is concern about losses. The arrangements that apply in most other agricultural industries should, in my view, apply in the wheat industry. There are ongoing issues that need to be sorted out as the industry makes its transition. I do not for a moment pretend that the transition will not be without pain and difficulty. My view and, I am sure, the view of all Democrats is that difficulties that occur along the way should receive a sympathetic ear from government and from all the players who are linked into the industry. The fact that there are some difficulties involved in adjusting should not be used as an excuse not to make those adjustments, particularly when the end result, as I have stated previously, will most likely be that the majority of growers will be better off as a result of these arrangements.

It is already quite clear that a significant number of growers have had to settle for less income than they would have otherwise received under previous arrangements, with the middlemen and others along the way creaming off far more than they should have. So, while these new arrangements will not be perfect in every way for all players, I think it is clearly a move towards a better set-up for wheat growers as well as for others who are involved in the process. It is a positive move for the environment. Indeed, I think it is a positive move from the majority of the opposition who are taking this step and, to some extent, making a shift away from the position they were taking in the past. In the same way, the Democrats have shifted their view on this matter. The only thing that I would urge is ongoing assessment of the operation of these new arrangements.

Dana Wortley (SA, Australian Labor Party) Share this | Link to this | Hansard source

I seek leave to incorporate a speech by Senator Sterle on the Wheat Export Marketing Bill 2008 and Wheat Export Marketing (Repeal and Consequential Amendments) Bill 2008.

Leave granted.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

The incorporated speech read as follows—

Wheat Export Marketing Bill 2008

Mr President I rise to speak on the Wheat Export Marketing Bill 2008. This Bill fulfils Labor’s Election commitment to move quickly to restore the integrity of Australia’s export wheat marketing system and to improve the efficiency and performance of Australia’s export wheat marketing chain.

Let’s be brutally frank. We wouldn’t be here today debating this Bill if Australia’s export wheat marketing arrangements were not in disarray and had not become a total embarrassment to all concerned.

Australia’s export wheat marketing arrangements failed:

• Because of policy incompetence on the part of the now departed Howard Government
• Because of the failure by the Howard Government to ensure accountability and appropriate transparency in the operations and conduct of AWB (International) Limited and its subsidiary companies
• Because of the descent into corruption at high levels within AWB at the time.

These failures badly tarnished Australia’s hard won international standing as a reputable wheat exporter.

These failures resulted in substantial economic damage to Australia’s export wheat sector.

Despite the signs, despite the risks to the national interest, the responsible Ministers in the Howard Government sat on their hands until maximum damage was done.

They didn’t listen, they didn’t look, they didn’t probe.

When the Howard Government did act its actions were piecemeal and indecisive.

It is recognised by all wheat industry stakeholders that an extension of the current interim arrangements past the end of June this year is not a viable option.

Failure to put into place the necessary reforms from 1 July this year would place an enormous deadweight in the saddle of Australia’s export wheat sector.

The Rudd Government is determined that this will not occur.

After the debacle of recent years brought about by the neglect and incompetence of the Howard Government, Australia’s wheat farmers deserve prompt and decisive government action so they can move ahead with confidence doing what they do best—producing high quality wheat for the international and domestic markets.

Mr President, this Bill has been drafted after extensive consultation and advice from all stake holders, including wheat growers, wheat export organisations, bulk handlers and the relevant government agencies.

The Bill has also been the subject of an enquiry by the Senate Standing Committee on Rural and Regional Affairs and Transport.

There is no doubt that there remains a breadth of views amongst individual wheat grower organisations and individual wheat growers of what should happen from this point. However individual wheat growers can’t be criticised for this situation, particularly given the way the Libs and the Nationals have been at each other’s throats over how the shambles that they presided over should be fixed.

This fact alone shows how fortunate it is that there is now a government willing to take a leadership role and to act decisively, based on the best informed advice available.

As one of the witnesses to the Senate committee inquiry hearing in Perth, Mr Douglas Clarke, a WA wheat grower, observed;

“This legislation moves the grain industry out of the 19^th century into the 21st century where we have the same rights and abilities to do things as everybody in Australia has and to run our businesses accordingly”.

However I think it is fair to say that a number of those who made the time and effort to give evidence to the Committee were having difficulty in adjusting to the need for change and would prefer, if possible, to roll back the clock.

Mr President, the Senate Committee heard more than enough evidence to prove to a majority of committee members that this simply isn’t an option.

This is what makes the dissenting report of the National Party members on the Senate Standing Committee on Rural and Regional Affairs and Transport and Senator Scullion, representing the NT Country Liberal Party, so bewildering.

The stance taken by the Nationals in respect to the Oil-for-Food scandal is particularly breathtaking. In their dissenting report they had this to say about the oil-for-food scandal.

“The Oil-for-Food scandal has been used very successfully as a means of leverage to destroy one of Australia’s greatest wheat marketing advantages. The motivation for the contrived uproar was far from the protestation of an informed conscience but more of a financial opportunistic ploy for certain market players to set themselves up as regional monopolies with the windfall gain to those who had a financial interest in them”

One has to wonder what planet Senators Joyce, Nash and Scullion have been on over the past few years.

In other words, as far as the National Senators are concerned, Australia’s international reputation doesn’t matter, corporate governance doesn’t matter, transparency doesn’t matter.

Apparently National Senators believe we should all just get over it and act as if nothing happened.

Well this might be the way the National party operates but it sure is not the way this Government operates.

It is also not the way the vast majority of Australians expect their Government to operate.

Australians care about Australia’s international reputation. They know if you lose people’s trust, including in the international sphere, it’s very hard to restore it.

It is evident that the Nationals are willing to play a very dangerous game with Australia’s international trading reputation and with the livelihoods of thousands of Australian wheat growers.

Australians have the right to expect high levels of probity and performance by those given responsibility by government to represent Australia as a reputable trading nation as well as safeguarding the long term interests of Australia’s hardworking, and by world standards, highly efficient wheat growers.

This Bill provides for the establishment of a new agency, Wheat Exports Australia, to rigorously oversight export wheat marketing arrangements.

The reforms contained in the Bill have been designed to restore integrity and to significantly improve the performance of Australia’s export wheat marketing system.

The reforms will ensure that there is contestability in the provision of international bulk wheat marketing and transport services as well as providing wheat growers with greater selling options.

These were matters that were raised by individual wheat growers and representatives of wheat industry organisations during the Senate Committee enquiry.

The system of accreditation contained in this Bill will ensure that companies who engage in the international marketing of Australia’s bulk wheat sales meet clear and strict probity.

Further companies who wish to engage in Australian export wheat marketing will be required to demonstrate that they have the management skills and the systems in place to manage the risks associated with the international wheat trade and that they are well placed to deliver best returns for wheat growers.

The reforms contained in this Bill will restore the high level of trust in Australia’s export wheat marketing arrangements that Australia enjoyed prior to the Howard Government effectively handing over the international marketing of Australia’s annual multi-billion dollar wheat crop to a private “do as you like” monopoly.

The reforms will also ensure that wheat growers benefit from the incentive for high performance that will come with competition in the marketing of Australia’s export wheat.

The reforms will give individual wheat growers much greater room to move to adapt their wheat production to take advantages of new market opportunities as well as changes in overseas demand patterns.

The National Senators argue that a single desk selling monopoly delivers higher prices and revenue for the grower. However they have been unable to bring forward substantive evidence to support that claim.

It is a claim that has been thoroughly debunked on several occasions by independent analysis, a fact that has either escaped the attention or been ignored by the Nationals.

Without any prompting from the Government, the measures contained in the Bill have been widely applauded publicly by expert independent commentators and analysts.

In regular years Australia accounts for around 15% of the world wheat trade. It really stretches credibility to engage in the fantasy that this level of market share enables Australia to exert significant supplier monopoly power.

It is also important to note that real returns to wheat growers depend, not only on the export price, but also on how cost efficient the provision of all the services is, including marketing, storing and transporting of the wheat from producer to buyer.

Certainly the Senate Committee heard credible evidence of significant cost imposts incurred directly and indirectly by wheat growers that were clearly a result of the fact that AWB’s monopoly position protected it from competition from other potential suppliers of the same services.

I turn briefly to the situation in relation to my State of WA.

Western Australia produces approximately 40% of Australia’s wheat crop. More than in any other state, wheat growers in WA rely on the performance of Australia’s export wheat marketing arrangements for the long term economic security of their livelihood and the level of return for their efforts.

Unlike wheat growers in the eastern states who have ready access to a substantial and increasing domestic market, Western Australian growers rely almost exclusively on export sales.

Approximately 90% of Western Australia’s wheat production goes to the export wheat market. What this means is that in most years WA delivers approximately 50% of Australia’s wheat exports.

Therefore Western Australian wheat growers are heavily dependent on a reliable and efficient export wheat marketing system.

Mr President the evidence that was presented to the Senate committee was very convincing that the way the AWB wheat pooling arrangement worked resulted in Western Australian wheat growers subsidising eastern states growers in respect to pool costs.

Under the old system eastern state wheat growers not only had the advantage of ready access to a large and growing deregulated domestic wheat market, their export wheat returns were, in effect, being subsidised by Western Australian wheat growers.

Mr President that’s the sort thing that happens when you have a commercial monopoly.

It is also very interesting to note that a vehement opponent to the single desk, single seller monopoly in respect to export wheat is the Liberal Party Member for the Federal Electorate of O’Connor. The Electorate of O’Connor is the largest wheat producing electorate in Australia.

If ever there was a place and time to test the real feelings and wishes of export wheat growers, it was the large WA rural electorate of O’Connor at the 2007 election.

Mr Tuckey had no difficulty in sending the Nationals candidate for the seat packing in the 2007 Election.

The fact that the Nationals couldn’t get their candidate up in O’Connor demonstrated just how far the Nationals were out of step with electors who live and work in the largest wheat producing electorate in Australia.

Mr President it is important to remind senators that, depending on the year, Senator Joyce’s State of Queensland produces only 4% to 8% of Australia’s wheat crop.

To the best of my knowledge, the Northern Territory from where Senator Scullion comes from, and who has also signed up to the Nationals’ position, doesn’t produce any wheat at all.

Furthermore Queensland wheat growers have ready access to a growing deregulated domestic wheat market. Basically the export wheat trade is a marginal issue for Queensland compared to the main wheat growing states.

It is also relevant to note that, in recent times, there has been a massive increase in wheat grower participation in the non-regulated export wheat trade in bags and containers. In January this year the Export Wheat Commission reported very strong growth in non-bulk wheat exports since the deregulation of this trade in August 2007.

In fact in the seven months to March this year over 36% of wheat exports, by weight, was non-bulk with southeast Asian countries and Bangladesh accounting for the large majority of this trade – many of these countries are growing markets for WA wheat.

It is clear from this trend that Australia’s wheat growers are more than ready to embrace more flexible export wheat marketing arrangements that will be offered by this legislation in respect to bulk export wheat.

I would also like to touch briefly on another matter that came up during the Senate Committee enquiry on the Bill. The fear was expressed by a small number of witnesses that the Government’s proposed export wheat marketing reforms would lead to further rundown of wheat producing communities and wheat district rural towns.

I have to say that from the evidence given by other witnesses there was a real sense of excitement that the legislation will create more opportunities for wheat growers to expand and develop their industry.

This can only benefit the viability of small businesses in wheat growing districts that depend on a vibrant and prosperous wheat industry.

Hence I believe that the reforms rather than being a negative in respect to the future of towns in wheat growing districts will have the opposite effect.

The reforms will give wheat growers powerful incentives to develop and expand their wheat growing operations. This can only be positive for rural towns in Australia’s wheat growing districts.

Mr President the time has come to put the turmoil in Australia’s export wheat marketing system behind us.

We need to enable all stakeholders to get on with the job of consolidating and improving Australia’s position as a reliable and highly competitive supplier of a premium product that the world seems likely to need in increasing volumes in the years ahead.

This will demonstrate to the Australian Community, and not least to wheat growers, and to other stakeholders that they can be confident of the future of the industry and of the Australian Government’s determination to nurture and protect Australia’s international wheat trading reputation and the long term interests of thousands of Australian wheat growers.

The reforms contained in this Bill will provide a firm platform for this to occur. I would therefore encourage Opposition Senators, including National Party Senators to wholeheartedly support the Bill.

If National Party Senators reject this reform opportunity their action, while it is highly unlikely to prevent the reforms going ahead, will do nothing towards supporting the ongoing development of Australia’s wheat industry.

For its part the Rudd Government has committed itself to continue to work closely with the industry, particularly wheat growers, to insure that it remains attentive and responsive to the factors affecting the performance of this important and valuable agricultural industry.

I commend the Bill to the Senate.

Barnaby Joyce (Queensland, National Party) Share this | Link to this | Hansard source

I would like to acknowledge the work that Senator Nash did in the committee stage of the Wheat Export Marketing Bill 2008. Due to circumstances in her family, Senator Nash cannot be here tonight. So, in my contribution to this bill tonight, I speak also on her behalf.

The defeat of this legislation should be a complete no-brainer. It is quite apparent that, in the current drafting of the legislation, a range of issues have not been thought through. Even in discussions with Mr Woods this afternoon regarding sections of the bill, such as the accreditation scheme, I have seen that this legislation as it stands has holes all through it. So, if on nothing else but a technical process and the competency of a government to bring forward legislation that has been thought through, especially with something as contentious as wheat exports, this legislation is lacking.

If you do not want to give competitors a free kick in front of our trade goalpost, the need to defeat this legislation is obvious. There is no question about it. We have the ridiculous concept that now, with 60 per cent of our world’s wheat being purchased by single-desk buyers, Australia will go forward. We hear that 80 to 100 people are looking at becoming accredited, while a number of other people in the same room will be selling the same product from the same area. There is only one way the price of Australian wheat will go, and that will be reflected back to the grower. Of course, they are the ones who lose. The trader picks up the margin on the way through, but the grower picks up the final result. So this legislation should be defeated on that scenario alone.

If you believe in open and transparent government that fully ventilates and gets to the end of contentious issues and that gives alternative models, such as the Wheeler model, a chance to go forward and succeed, then this legislation should be defeated. If you believe that the Ralph report should have been tabled so that its outcome could be seen and thereby give a reflection of a true and transparent government dealing with its people, then you should defeat this legislation, because the government has not presented that report. If you believe in legislation reflecting the democratic will of the people, especially those whom it will affect to the greatest extent, then this legislation should be defeated. We know that, overwhelmingly, the Australian wheat grower does not want to lose the single desk.

If you believe in removing monopolies, then you need to understand that this legislation is actually creating them. Those who vote for this legislation are going to create regional monopolies that will have a huge impact on where the marketing of one of our prime exports goes forward from this point. I am sure that there are people in the chamber tonight who know that what they are doing is not quite right. They know in the pit of their stomach that they are about to hand over something to our major trading competitors in the United States. If they are honest with themselves in their quieter moments, they will know that they should not support this legislation. But they are being driven towards it. The question that everybody is asking tonight is: driven towards it by whom?

Why do Australians want to associate with farmers and why are they proud of them? We are proud of farmers because, for very little return, they do a job that is decent and honourable. It is decent and honourable in that the efforts that farmers put into their endeavours lead to food being placed on the table. One of the key things we should look at tonight is the effect that this legislation will have in reducing the affordability of wheat and making its growing less worth while. As that reduces, fewer people will grow wheat. As fewer people grow wheat, there will be less of it on the world market. With less wheat on the world market, there will be less food to feed people, and people will starve—especially now, when we have very short supplies of grain.

We are playing with a mechanism. We are playing into the hands of monopolies and multinational organisations that will certainly extract a premium, but they will extract that premium, at the end of the food chain, from those who are most exposed. Do not think for a moment that this legislation is not going to have ramifications outside of Australia. Do not think for a moment that, with less wheat being produced, somebody in Africa or in South-East Asia will not be affected by the decisions you make in this chamber tonight.

It is peculiar in the extreme when I see people such as the Greens doing a 180-degree turn. They are now helping a multinational extract an unreasonable premium from the market to the detriment of the most vulnerable in the world community. They are supporting this. There is something that is a little bit insidious about this whole process.

We keep referring back to the AWB. This is the life raft that people attach themselves to—the disgraced AWB. That is it; that is the raison d’etre for going down this path. However, I never hear people talking about the disgraced Japanese or the disgraced Germans. People that Australia has gone to war against seem to get a fuller reprieve than an organisation that, since that point in time, has removed the people who were involved. It is an inanimate body which you have tried to place a certain conscience on, not so much to put a moral position onto that organisation but to remove yourselves from the same moral question. It is a convenient argument, but it is a shallow argument.

There are so many views that are quoted, but no-one wants to be absolutely transparent with the numbers of Australian wheat growers who want to maintain the single desk. It is their livelihood; it is their income. It was the Labor Party that went to the last election and won it on the premise of bringing a fairer outcome to working families. We learnt our lesson—they won; we lost. But it is complete insincerity and a complete change of heart which really cuts through the absolute philosophical core of what you are—that you are now going to persecute other working families that you do not identify with as much because they might be a little bit different to you. Were those working families that were out there today the wrong type of working families? Do you want another type of working family? Do you have a very specific type of working family which is the only working family you wish to help? Those working families today are obviously under immense stress and this change is going to be reflected through them.

Let us just walk through one of the events that can occur from here. Currently we are going to have the Wheat Export Authority granting licences. I have asked about this tonight and there is no mechanism in the granting of a Wheat Export Authority licence to ensure that a person has unconditional access to a port at a certain price. That is to be determined by commercial terms and by the port. So what we will have now—and this is another flaw in your legislation—is the ownership of the grain transferring to the trader upon the transferral of goods, even though the payment has not been made. So the agent takes delivery of the crop from the farmer, who is hocked up to the eyeballs and is hoping for that last crop. The crop comes under the ownership of the agent. The agent takes it to the export facility. The export facility says, ‘We will export it at these terms,’ which are obviously out of line and unprecedented. So then the agent starts going broke because it cannot export its wheat. It cannot get payment and therefore the farmer, who is back at the farm, never receives their payment. Not only do they lose their crop; they lose their place.

That is the consequence of the lack of forethought that has gone into this legislation that is currently before us, and nobody seems to be prepared to do anything about it. Tonight when I asked that question of Minister Ludwig, the answer I got back was: ‘I didn’t write the legislation. Those problems are just there.’ That is completely unacceptable and you should take it on as a moral duty to do something about it. You should have the bravery and the conviction to turn around now and say: ‘We haven’t got this quite right. Even if we want deregulation, this is not quite right and we’re going to do something about it.’ If you do not then you really have denigrated this place and obviously this is just a cathartic place of no real consequence where you march in, do whatever you are told and toddle back out the door. Your oath of office has obviously lost its conviction.

Where was the rally? We always hear about the strong views of those in favour of deregulation. Where was the rally for those in favour of deregulation? They could not even muster a football team with a free keg. Yet, leaving sowing and their debts at home with whoever had to look after the place and leaving the bank manager screaming down the phone, we managed to get 500 or 600 farmers to come out here today. That is the sort of feeling that is permeating and those people are angry. They are angry because this parliament has deserted them. They are angry because this parliament has left them on their own. They are angry because this parliament no longer reflects their views. So it becomes not just a slight on the wheat issue but a reflection on how this parliament reflects its people.

I can see the numbers stacking up with the most peculiar extremes—the Greens and a whole range of people all lining up to help Cargill, an American multinational, along with GrainCorp take control of the eastern seaboard and CBH take control of the western seaboard. CBH, which has 95 per cent of receival infrastructure and 100 per cent of ports, is trying to take control of the west; Cargills and GrainCorp are trying to take control of the east with 100 per cent of the ports and the vast majority of the receival enterprises. This is what we are voting for. After this debate, the senators will leave this chamber and they will fascinate themselves with discussions about how they actually got it right, how everybody else is confused, how the only ones in step in this squadron are themselves and how the Australian people will just have to learn to meet it. I have heard some ridiculous statements that this is only the position of the old farmers. How condescending and ridiculous is that! That is the position of the old farmers. That is how it was in the past. Things have got to move on. When you lose your sense of compassion and empathy, that is how you start talking. I find it coming from all sides. I find it coming form the Labor side and it is completely nauseating no matter where it comes from.

I am perplexed because I listened to some of the Greens senators speaking tonight and I know that, despite their disgust with Peter Garrett, they have gone out and done exactly the same thing—deserted their principles to get in line with the American multinational, Cargill, and big business. Remember that these grain traders at times can be the worst of the worst. The big, multinational grain traders have got influence in a way that no-one else has because they determine the food that people eat. They have got you over the ultimate barrel. Yet the Greens have decided that they will support them tonight.

I do not see this as the preserve of the Nationals—it is bigger than that. In fact, if that is all it is then that is very sad, because we are really hoping to show to the Australian people that we have the capacity in this chamber to listen to what is the ultimate and overwhelming view. I went to many meetings where the sentiment was overwhelmingly that they wanted to maintain the single desk. Their inherent fear is—even the people wanting to deregulate have this inherent fear—of regional monopolies coming into place. And they are going to come. I used to work for ConAgra. I know what happens next. They are going to extract an unreasonable premium and manipulate the market. And they know they can do it in a nation such as Australia because we have the weakest trade practices laws in the Western world. We are just ripe for the picking.

I find it peculiar in the extreme, listening to Senator Tom Harkin, a Democrat, in the United States; Senator Norm Coleman, a Republican, in the United States; or Alan Tracy, director of US Wheat Associates. All these people previously had one thing in common: they hated the Australian single desk because it gave the Australian wheat farmers an advantage. They were trying to match that advantage with subsidies, but they disliked intensely our single desk. It was the first thing they would bring up in discussion. Even at the last Doha round, the first thing that Mark Vaile was confronted with were attempts to get rid of our single desk. So what do we do? Do we even get anything for handing it across? No. We just hand it in. What is the point of that? Why are we doing this tonight to Australians?

I understand that the Liberals have a different view on this, and I am disappointed about that. More to the point, I am disappointed to know that some Liberals do not have a different view to mine but are going to support handing it across nonetheless; that is even more disappointing. I am disappointed that there has been this manipulation of facts. We heard that this was all because the Western Australians wanted deregulation. Over in the West, one of the senators said, ‘We cannot find anybody who wants to keep the current system of marketing.’ That is not correct. When we went over there, the largest farming group in Western Australia wanted to keep the single desk. The group that represents the greatest number of farmers in Western Australia wants to keep the single desk.

So where is the honesty in this debate? Where are the facts and figures of this large amorphous group that apparently wants deregulation but can never form a group of more than 10 in any one place at any one time? They never turn up and mount and ventilate their argument in a public forum—but apparently they are out there somewhere! I will tell you where they are: they are sitting at boardroom tables tonight, opening bottles of Moet and cheering the Australian Senate. That is where those wheat farmers are. And the people who are going to be exploited are those who tonight are dealing with machinery that has broken down, a drought that is going on, an auger that is busted. They are the Australian people; they are the people you should be going out and talking to. But I feel that a certain group has permeated this debate and affected the outcome that is going to be delivered to the Australian people.

I hope that Australian farmers will not give up on this because, if they do, they will be giving up on their own democratic system; they will be giving up on their own proper representation in this parliament. I hope that they do maintain the rage because, if they fall over on this one, so many other issues will fall over as well and we will get a continual march of corporate interests into rural Australia, we will start to lose the family farm, we will start to lose Australians’ connection to the land they walk on and we will start to justify and moralise by reason of the overwhelming line. ‘This is the way the pure market works. We walk over the top of you’—that is how it works! And we are not even getting a pure market; we are getting the corporatisation and monopolisation of specific and centralised essential parts of production. So they will control the market.

After this goes through—and I am no fool; I know it will go through—what will we have? The person who receives the wheat will be the person who gets control of the rolling stock, who will be the person who owns 100 per cent of the export facilities, who will be the person who controls the export market. And that will be claimed as a success for the Australian grower! And, after GrainCorp, who now are in trouble, get themselves into more strife and Cargill takes a greater controlling ownership of it—because currently eight per cent of GrainCorp is owned by Cargill—our major competitor will be marketing our wheat. Doesn’t that just show the collective intellect of this chamber!

But what worries me is that I know that you know this. I know that you know it is wrong. So why are you doing it? That is the question that has to be posed to all of you—and do not go into that sort of communal confession session where you all lie to one another. Ask yourselves, in your quieter moments: the majority of the Australian wheat growers did not want this—why did we do it to them? Why did we do it, when we could have done something else, when we could have come out with a better outcome, when we even had the opportunity to close the holes that are so apparent in the legislation as it stands now?

What will be completely nauseating is that later we will see people feigning an association with this wide brown land, tearing around the countryside in RM Williams boots and Akubra hats, with earnest and sober looks on their faces as they walk through a paddock—knowing that it will look good in prime time back in Sydney. But we know that their true association, their true belief, their underlying core, is far from those people. The reason they do it, the reason they like that grab to appear on prime-time television somewhere between six o’clock and 7.30 is that they know the Australian people associate with Australian farmers—because Australian farmers inherently have always been pretty decent people.

In closing, one of the things we have to look at in this nation is food sovereignty. We talk about oil sovereignty, and that is extremely important. But we have to look at food sovereignty. We have to look at our capacity for delivering to our people one of the most fundamental aspects of what a nation does—feed itself. When you start walking away from that, you walk into all sorts of problems. When you start walking away from the multiplicity of participants at the farm level and start centralising that, you start playing a game that is extremely dangerous. That is, in essence, another reason why this is so dangerous—what this is a harbinger for.

This bill should be defeated because the majority of Australian wheat growers do not want it. This bill should be defeated because it plays straight into the hands of our major competitors. This bill should be defeated because its premise is based on people who did not tell the truth in disclosing how they would support the issues. This bill should be defeated because, even as it is drafted right now, it has holes all through it. And this bill should be defeated because you know—and I am referring to all senators—it is wrong.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

I rise to speak to the Wheat Export Marketing Bill 2008 and its companion, the Wheat Export Marketing (Repeal and Consequential Amendments) Bill 2008. I do not speak to this bill as its portfolio holder—for our party that is Senator Bartlett, who has already spoken—but I want to speak to it as a senator from Western Australia and also as the portfolio holder with respect to Corporations Law and corporate affairs generally. In my opinion, this is a great advance in both agricultural and corporate policy. The previous speaker, whom I am sometimes inclined to refer to as the ‘lion of Queensland’ because of his strong and courageous approach to matters, said that we senators know that this bill is wrong. Well, this senator does not. On the record, I say that I am going to present an alternative view.

I have spent a great deal of time with such members of the farming community, both people at the representational level and individuals, as I could, including, when the Ralph review was underway, attending a couple of mass meetings. I have said before in this chamber that I have never been convinced about the majority argument, but, even if it were true that a majority of Western Australian wheat farmers were for the single desk—there has been no survey, no headcount, ever that can attest to a majority; that is on the Hansard record of the committee hearing—and even if the majority of Western Australian wheat export farmers continued to be in support of the single desk, I would still regard this change as a desirable and necessary one in terms of a modern Australian agricultural economy.

I have not ever understood why it is good practice and good law, supported by all parties, that other grains and agricultural products are exported competitively—not on a single-desk basis—but that somehow wheat needs to be isolated in this manner. As we know, domestic wheat is sold in an open, deregulated and competitive market. As we know, the majority of eastern states wheat farmers do sell domestically—they are not export farmers. The majority of export farmers are, in fact, in my state.

But I do understand that many in the community, including their political representatives, feel very strongly about this issue, and I do not seek to diminish or devalue the strength of their feelings; they come from conviction. What I want to express in this debate is that I too have conviction and my conviction is different from yours. I am expressing that honestly, determinedly and positively. I have come to a conclusion which differs. It does not make yours invalid, but neither does it make mine invalid—unless the dangers you forecast actually emerge, and then of course I will be proven wrong. But, if the dangers you forecast do not emerge, you will be proven to be wrong, so we will have to see what the future holds.

It is Western Australian farmers who constitute the great bulk of wheat exporters. My view is that a minority want total deregulation with an open, competitive market with no controls at all—and that is a minority. My view is that another, considerably larger, minority want the retention of the single desk. My impression is that the rest in between, a more silent group, perhaps a majority, want a regulated market with a choice of a few licensed exporters. That is what they are getting. They are getting a regulated market, not an unregulated market. It is a regulated market with a choice of a few licensed exporters. It is not a laissez-faire market where you can sell to anybody on any basis you want to.

Australia is a modern, open-market, competitive economy. The National Party has stood proudly with the Democrats, the Labor Party and the Liberal Party in advancing the cause of a modern, open-market, competitive economy. Australia’s farmers and the farming community in general are amongst the strongest and best exponents of a competitive industry and they certainly attract my admiration in many of the things they do. The wheat industry, as a component part of the Australian agricultural economy, has been structured remarkably differently, but other farmers do very, very well without single-desk mechanisms.

As a matter of public policy, monopolies are not desirable and they need to carry strong public interest arguments for their imposition or retention. Sometimes, of course, that argument can be made. It can be made with utilities. It can be made with things like casinos. I happen to believe that we do not need more than one in Western Australia, so I think an argument can be made in the public interest. But I do not think that argument has been made for export wheat, particularly when—I stress—all other grains and all other rural products are happily exported with a choice of exporters in normal, open-market arrangements. If a single desk is not needed for all other agricultural products and all other trade products, I have to be persuaded that it is in the public interest for it to be retained for wheat, and I have not been persuaded. So, with great respect to my National Party colleagues, whom I both like and value: I differ from you on this matter.

It comes to the question of numbers and the bills that are before us. I think there are weaknesses in the bills. For instance, one that occurs very much to me as a West Australian is that we have a state access regime that is already established and operating under law and there is a proposal in this bill to duplicate that, to double-up on regulation. That is unnecessary. Both the previous government and the present government were and are committed to doing away with overlapping and duplicated regulation. I would hope that either the National Party or the Liberal Party, or both of them, would be putting forward an amendment. In my view that amendment should say one of two things: if a state access regime already exists then they are exempted from the federal access regime; alternatively, the minister of the day should be given the power to exempt a complying state access regime. I have neither the time nor the carriage of this bill to construct such an amendment, but that is one of the amendments I would seek. And I would urge my National Party friends on the benches, if they see that they are going to get rolled with this bill, to at least put up amendments to address weaknesses that have been identified.

In the process of referring to weaknesses, I should of course compliment the chair and the members of the Senate Standing Committee on Rural and Regional Affairs and Transport, which examined the exposure draft bills. I am aware that people like Senator Joyce attended numbers of those hearings. I only attended one, from memory. They did bring up some very cogent points. I think what I am doing is right, not wrong. I formed an opinion based on my consultations with the agricultural associations in my state, some of whom want the single desk and some of whom do not want the single desk—

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

St George’s farmers or St Georges Terrace farmers? That’s the Liberal Party!

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

Stop making me laugh! Those farmers I am in touch with. I would hardly describe myself as a country lad, but I am certainly of the opinion that I have done enough consultation and observation and have involved myself in this issue enough to be making an informed opinion. And my informed opinion is that I will vote with the government on this bill.

Ruth Webber (WA, Australian Labor Party) Share this | Link to this | Hansard source

I seek leave to incorporate Senator Hutchins’ speech in Hansard.

Leave granted.

Steve Hutchins (NSW, Australian Labor Party) Share this | Link to this | Hansard source

The incorporated speech read as follows—

Mr President, I rise to speak in support of the Wheat Export Marketing Bill.

Prior to last November’s election, the AWB Wheat for Weapons scandal drew attention to the lack of accountability and competition in Australia’s single desk wheat export marketing system. In response to this, Labor—in consultation with wheat growers and traders—released a policy to reform bulk wheat export marketing arrangements. This policy was received with open arms by many in the industry.

Since the election of the Rudd Labor Government, we have been working towards implementing these reforms and delivering on our election commitments—commitments that those opposite would do well to remember we have a mandate to deliver.

Without a doubt, the major reform measure in this bill is the liberalisation of the wheat export market—allowing for the accreditation of new bulk exporters.

The new system created by this bill will not completely deregulate the wheat export marketing system—rather it will remove the monopoly currently held by the Australian Wheat Board over wheat exports and provide for the accreditation of new bulk exporters.

In essence, this will remove the single desk system that has operated in various forms in Australia for the most part of the last fifty years.

The measures contained within this bill will improve competition within the wheat export market—providing more efficient marketing services, reducing the inherent risks associated with a single desk system, and improving accountability and transparency with respect to pricing and cost information.

With the passage of this bill—for the first time Australian wheat growers will be able to choose which accredited bulk exporter they want to conduct business with. Increased competition in this area will encourage marketing innovation and the development of existing markets.

By abolishing the single desk, this bill will remove a monopsony market structure at which growers must accept the single purchaser’s price. Instead, a new price-competitive market will be put in place where growers will benefit from multiple buyers competing for the right to export their wheat.

Australian Wheat Board Limited has indicated that it will seek accreditation under any new scheme—meaning that growers will have the option of remaining with AWB or using a competitor to export their product. Any exporter under this system will have an incentive to offer growers a greater share of the actual export price than under any past arrangements.

A system with multiple buyers will enable growers to negotiate fairer prices and spread their risk across multiple exporters—which is likely to improve the speed with which they sell their wheat.

At the centre of the new export system is a new industry regulator to develop and police an accreditations system for bulk exporters—it will be known as Wheat Exports Australia.

This authority will be empowered to develop, amend, and administer the accreditations scheme in accordance with guidelines outlined in the Bill. These guidelines include probity and performance tests, consideration of the company’s access to financial resources, risk management systems the company has in place, and the experience and past and present behaviour of the company and its executives.

Further, if the applicant corporation operates a port terminal for bulk grain exports—it must have an access arrangement in place. From October 2009 these arrangements must be agreed to by the ACCC. In order to receive accreditation, all bulk exporters will be required to sign a compliance statement declaring that the company has complied with their accreditation conditions.

However, the compliance statement and the accreditation condition guidelines are just the first step to providing a more transparent, accountable, and competitive wheat export marketing system. The provisions in this bill ensure that it is able to maintain the integrity of its accreditation scheme. It has all the necessary investigative powers to ascertain whether bulk exporters have breached the conditions of their accreditation. This includes the power to require information and audit exporters. Severe penalties will apply where breaches can be demonstrated to have taken place. Further, the legislation empowers Wheat Exports Australia to revoke or suspend accreditation where breaches of accreditation have taken place.

This bill does not, however, hand over complete control to the regulator. It maintains a degree of ministerial power to direct Wheat Exports Australia to investigate issues falling within its purview and to require bulk exporters to provide annual compliance reports and export data.

As with all major structural changes, the transition from a single desk will involve some adjustment. To help the industry adjust to the new arrangements the Government is making available up to 9.37 million dollars in assistance measures.

These will include up to 5 million dollars to help the new regulatory body Wheat Exports Australia get off the ground and fulfil its duties over the next three years. This is critical to ensure that the regulator is able to properly manage the accreditations process and police the conditions of accreditation.

Up to 2.52 million dollars will be provided to assist with collecting and distributing market data and analysis to better inform growers and buyers about the state of the wheat export market.

Up to 1.15 million dollars will be made available over the next financial year to inform growers and buyers about the new accreditation system and how it will work—including details on the reforms and the marketing options available for wheat producers.

6 hundred thousand dollars will be available to new markets to assist with creating new processes and arrangements to provide effective technical market support to customers and one hundred thousand dollars over the next financial year will go towards developing and promoting an industry code of conduct on transparent pricing practices at silos.

The government takes very seriously the impacts that these reforms will have and is committed to making the transition as smooth as possible for all stakeholders. This transitional arrangements package does just that and should make the move away from a single desk as simple and easy as possible for growers and exporters.

Mr President, one of the things that has characterised Labor’s approach to these reforms has been the consultation measures and processes that we have employed.

We have extensively consulted with stakeholders on the detail of this bill. When we released our policy prior to last year’s election Labor spoke to growers and peak industry bodies from the Pastoralists and Graziers Association of Western Australia through to the Australian Grain Exporters Association. Amongst many of these stakeholders, Labor was given accolades for its policy.

GrainCorp chairman, Don Taylor, applauded Labor’s policy in a press release on the 10th of October saying the decision by Labor to dump its support for a wheat export monopoly is a major turning point and lays the foundation for a dynamic and competitive market.

The South Australian Farmer’s Federation grain council chairman, Brett Roberts said Labor had shown leadership on the issue in an Associated Press story on the 10th of October saying “Our position has been pretty well what Labor has advocated with this policy...It is a structure which is actually a mechanism that will service our customers well, service the growers well, service the industry well, and drive value chain innovation, which I think we have been lacking for the past 50 years.”

But support for Labor’s policy didn’t stop there—one of the most startling endorsements came from the Opposition’s very own Member for O’Connor. The honourable member was quoted on more than one occasion making comments like those in the West Australia on the 11th of October “We [the Coalition] have been gazumped by the Labor Party and there will be farmers and their families who will vote for the Labor Party because of it”. What a ringing endorsement—with friends like that who needs enemies!

Last year’s election itself demonstrated the level of public support for Labor position on wheat export marketing. On the 24th of November last year, Australian working families—including those in rural and regional Australian seats like Page, Eden Monaro, and Leichhardt – gave the Labor Government a mandate to implement their policy. Even those opposite recognise that! The Member for Barker, Patrick Secker, was quoted in the Financial Review saying that our reforms were sensible and the Coalition should recognise Labor’s mandate.

Nevertheless, once the bill was drafted, an exposure draft was released for public comment over a four week period and the Government referred the bill to the Rural and Regional Affairs and Trade Committee—of which I am a member—to be considered in greater detail.

Throughout this consultative process, the Government has listened and made a number of amendments to the Bill including the use of civil penalties for breaches of accreditation conditions rather than criminal penalties and making cooperatives eligible for accreditation.

But let’s contrast Labor’s consultative approach to the Coalition’s in government.

Remember the Ralph Committee that the former Government sent around Australia to find answers about the future of wheat exports? This report was never released on the grounds that it was “a report to government”. Hardly an open or accountable approach to government is it? What did they have to hide?

One only has to look at the Howard Government’s conduct with respect to the Wheat Marketing Amendment Act just last year. Where was the consultation with growers? Where was the draft bill for public comment? Where was the senate inquiry? The only consultations that took place were backroom discussions between Mark Vaile and John Howard to develop a face-saving compromise. A bit of a band-aid to keep an unhappy marriage together for the kids’ sake—just until the election.

Well Mr President, there will be no face-saving today. Those opposite have already started the bloodletting over this. You’ve got Liberal members like the Member for O’Connor and the Member for Barker publicly acknowledging that these reforms are sensible and in the national interest—and that the Government has a clear mandate to pass this legislation!

The Nationals on the other hand will no doubt do their best today to delay the passage of this bill. Just this morning Senator Nash was accusing the Liberals of selling out on farmers in the Daily Telegraph. Mr President, if Senator Nash and her colleagues want to delay or reject the passage of this bill—they will be selling out rural and regional working families who are counting on this bill to get some certainty about marketing arrangements in the 2008 harvest. Wheat growers deserve to know how they will be exporting their wheat and they deserve to know soon.

Mr President, Australia’s wheat industry has been the victim of an appalling lack of leadership under the Howard Government. The inability of the Coalition to resolve policy differences over the reform of wheat export policy continues to this day where no doubt we will see the partnership of those opposite divided on this issue.

Labor has provided leadership on this issue. We have consulted widely a developed a system that receives the broad support of stakeholders. This bill needs to be passed soon to give certainty to growers and exporters about the institutional arrangements leading into the 2008 harvest.

The Rudd Government was elected with this policy as a key part of its platform. We have a mandate to pass this legislation from the working families of Australia—including those in rural and regional Australia. This bill implements our election commitment to reform wheat export marketing arrangements and should be passed by the Senate without delay.

This bill has been put through the rigours of public and parliamentary scrutiny and consultation. Its merits and shortcomings have been debated in the media and in this place. It is with great pleasure that I commend this motion to the Senate.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

Today the Wheat Growers Action Group and the New South Wales Farmers Association rallied outside these chambers. They were protesting about the Wheat Export Marketing Bill 2008 and related bill before us. They know that the major parties have signed off on deregulation of the wheat export market. And they know that only the Nationals stand with them in opposing the deregulation that will see profits from wheat growing move away from the family farmer to the shareholders of major international buyers. They knew what was happening, yet still the wheat growers came. They were in the gallery this afternoon. They came to see their representatives in this parliament change their lives forever. When the Senate divides on the Wheat Export Marketing Bill, wheat marketing in this country will be changed forever. They know that the Nationals in government negotiated a single desk for them but, with Labor in power, all that has come to nothing. The previous PM committed to a single desk.

For some senators, this is a debate about Cole and the war in Iraq—I think that is where the Democrats and the Greens are coming from—and, for others, it is about market principles. But, for the wheat growers and for the Nationals, this debate is about what to do when the market has no principles, when overseas countries subsidise wheat growers and corrupt the world market and when major multinational corporations play growers off against each other and inevitably deliver lower returns to growers. The only factor that should weigh on senators’ minds tonight when they consider their vote is the Australian wheat grower. They have a right to say how their product should be marketed. They have a right to be listened to. They have every right to protest when this does not happen. I went around to all the rallies in Queensland. I can honestly say that I could count on the fingers of one hand the number of people who wanted deregulation. Perhaps they were not game to go to the rallies or perhaps they were there and were too scared to speak up, because the overwhelming majority—I would say it is 85 per cent—of Queenslanders want a single desk.

What we had outside this place today was a large group that represents the majority of Australian wheat growers. By far the single-deskers were in the majority. I would put it up as high as 85 per cent. They have spoken. They have told us, the legislators, what they need to survive and keep their industry strong. They want the single desk for export wheat to remain. It is, in the end, as simple as that. They have talked to committees and ministers and to spokespeople and the media. They have talked to MPs and senators. But the bill before us is not about listening; it is about turning away from growers and their working families. I stress ‘working families’ because, when you are on a farm—and Senator Joyce is probably the only legitimate wheat grower in this Senate that I know of—

Judith Adams (WA, Liberal Party) Share this | Link to this | Hansard source

I am sorry?

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

I am sorry. Senator Adams is a wheat grower; I forgot about that. But Senator Joyce does represent wheat growers. We are not listening to wheat growers, because we think we know better than they do how their industry should be run. There was a perception that Western Australia wanted to abandon the single desk, and it was Western Australia that was leading this debate. The majority of farmers in Western Australia are absolutely terrified of this because they export the majority of Australia’s export wheat. And that is where it is going to hurt—in the export industry.

This legislation is about selective listening to a minority of growers and taking no notice whatever of what the majority of growers want. This legislation is about listening to what our trade competitors want and then giving it to them—serving up Australian wheat growers on a platter so that American interests will take over our traditional markets. I hope that senators are very conscious of the burden they take on today if they support this legislation. When they read in the papers that wheat growers have left the industry due to poor returns and high market volatility, senators must remember their vote. When they read of credit crunches in the wheat sector, when they read obituaries of the family farm, when they read of previously healthy wheat communities becoming unviable and putting out their hands for assistance—senators must remember that their combined vote led to that.

Already we have reports confirming what the wheat growers have been saying would happen. Two prominent market analysts have stated that the drop in pool participation will lead to much lower advances and a rise in cash sales. Grains market analyst Brett Stevenson says that smaller companies not able to loan against exclusive rights to all bulk wheat exports, like AWB could under the old system, would be less likely to be able to pay pool advances without having sold the grain prior, so pool advances would become smaller. He said:

With the old pool structures, the standard advance was 80 per cent of the estimated return … now I would suggest it will be closer to 50 per cent ...

I hope he is right about that, because I believe it could go much lower. Mr Stevenson says that many growers will be tempted to sell for cash rather than get a low advance and expose themselves to the risk of pool returns dropping. Malcolm Bartholomeus says that growers will not be fully protected, because grain buyers who are not exporters will not have to get accredited. It does not really matter if you are a grain exporter and you do get accredited; the government is not prepared to stand behind you. I do not know what the purpose of the accreditation is. Anyone can rock up and the government will give them a tick. There does not seem to be any way of seeing whether they are financially stable, and so growers are being exposed to the risk of selling their grain to an entity which ultimately may fail commercially.

Many growers say they will not be able to afford to wait longer to be paid for their grain, as it can take more than a year to sell a large crop on the world market, particularly when we do get a bonzer crop, like we may this year. As a grain grower commented on the Land website:

There will be very few pools and why would there be when there will be heaps of unsold stocks of farmers’ grain at harvest time as the market looks after its immediate needs and withdraws.

Mr Stevenson said:

Under a National Pool the operator had a AAA-rating and could borrow money to fund Pool advances in US dollars at wholesale rates. Now we face reduced cash prices, reduced first advance and higher supply chain cost.

What the hell is this government doing to us? Rudd said the new system would not leave growers financially worse off. Once the Domestic market is filling up the prices will drop back as the harvest moves south as always.

When Mr Rudd went out and solicited votes from wheat growers, he said:

The Australian Labor Party has supported the single desk wheat marketing arrangements for over 65 years since 1939. During that period Labor has been a strong supporter of the current single desk marketing arrangements and it remains Labor policy that the single desk should remain in place while ever these arrangements have support from the growers and the community as well as delivering a benefit to Australian wheat growers.

There has been a change in the Prime Minister’s view. Another person commented on the Land website:

Under crippling financial pressure from 8 years of drought and 2 crop failures growers will be forced to sell or face storing unsold grain for a long time.

There are many farmers who do not have much on-farm storage. He continues:

Wake up Australia this will be the end of many family farms. We have to have a vote on this madness. We have to have a grower owned and controlled National Pool.

The WGAG chairman, Peter Cannon—who was here today—said that the new deregulated system also removes all associated benefits, like golden rewards and national pool freight rate advantages which hardworking growers rely on. He said that the legislation will see quality standards currently set by the national pool operator replaced by the National Agricultural Commodities Marketing Association, NACMA—standards that are set by traders, not by growers. Already NACMA is upsetting growers with proposed changes to quality standards, and wheat grades with a higher risk grain will be downgraded to a lower price than under the current national pool system.

Wheat growers claim that this legislation will see a sharp decline in annual wheat production in Australia, with serious implications for food security in Australia and vulnerable communities throughout the world. That only stands to reason. If you take the profit out of farming then farmers will not be there to supply food. I believe the wheat growers when they warn that this legislation threatens the livelihood of thousands of growers and removes the only advantage that Australian farmers have over heavily subsidised international competitors. This legislation will abolish the national pool and buyer of last resort, which has been an effective and orderly marketing system for the past 60 years.

I believe the growers when they say the new law favours big business and multinationals by granting them licence to export Australian wheat. Growers are worried the export companies will drive down prices as they compete against each other with Australian grain to secure overseas markets. I believe the growers who have grave concerns about the regional monopolies controlling the movement of wheat and the bulk-handling companies restricting growers’ access to up-country storage and port facilities.

The CWA also believes them. At its recent conference, the CWA called on the government to retain the present wheat marketing system for the 2008-09 cropping season. The WA Farmers Federation, that represent, I suppose, 90 per cent of the wheat growers in Australia also support the single desk. They have confirmed their support for the position taken by the Wheatgrowers Action Group.

At one stage, it seemed as though Kevin Rudd was listening to growers. As I quoted, he promised Australian wheat farmers that if Labor came to power, and if growers wanted the single desk, Labor would retain it. But the wizard of weasel words changed his tune after getting the keys to the Lodge. Kevin 07 curried favour with growers by telling them their single desk would stay. Kevin 08 gets rid of the single desk. How can anyone respect anything he says? No wonder the wheat growers feel cheated and angry. As a grower on the Agmates website commented:

How politicians that know nothing about grain production decide for us the future of our industry without adequate and proper consultation, thus putting the industry in a perilous situation is just inconceivable and ludicrous. They are leading us, like lambs to the slaughter, straight into the hands of multinationals, whose sole interests are profits and shareholders.

Another grower summarised the situation this way:

The vast majority of Australian wheat growers support the continuation of the orderly marketing of our bulk wheat exports with a single seller into world markets and national pools to minimise market risk, and maintain our excellent quality reputation. There appears to be no sound reason for dismantling the system which is the enemy of our competitors in the world market, and is our only counter to the huge government subsidies paid to growers in the USA and Europe.

I am committed to seeing that the voices of wheat growers are heard in this parliament. An executive member of the Wheatgrowers Action Group says:

We, the majority of wheat growers, are also very frustrated that our concerns are not being listened to, and we feel our democratic rights have been stripped away in favour of big business and their shareholders. After seven years of drought, two crop failures and input costs going through the roof—that is, fertiliser tripling in price within three years—government interference in our export wheat marketing system is the last straw.

Long-time wheat industry leader, Bob Iffla, describes the government’s action in the bill before us:

The government is breaking up the industry in a way that the Australian wheat grower will be hung out to dry. The bill represents the divide and conquer approach traders and our international competitors have been wanting for years. Wheat growers deserve better than what the government is proposing. The minister needs to ask himself why our competitors are so ecstatic over the proposed changes, and how he is going to prevent the takeover of the Australian wheat industry by foreign interests.

This bill is the catalyst for wholesale change to the growing, financing, transporting, storage and marketing of Australian wheat. Under the new system there will be increased pressure on port monopolies, as the system is not designed to cope with large short-term movements of grain. With the state governments’ failings with the freight rail system, most grain will have to be moved by road, which will be an impossible task, forcing increased storage and carrying costs at growers’ expense. Then the Greens and the Democrats want to talk about the environment. We are going to have an environmental nightmare with this grain pushed onto roads.

There is no financial security for growers at point of sale, or after. There is no receiver of last resort. This is necessary in a large production year, or back-to-back good harvests, and in years where quality is outside the normal receival standards. Blending grains to bring them up to a higher quality, and a better price for the growers cannot be done efficiently on a national scale without the national pool. Who handles and pays for the delays of shipments and delays because of customer complaints on quality?

Eastern and Western Australian grain ports are owned by a monopoly Australian operator. Ownership could fall into the hands of foreign interests with recent changes to GrainCorp. There is no risk GrainCorp will be a takeover target for Cargill or ConAgra—one of those; probably Cargill. In its essence there will be no sharing of risk across a national pool to share gains and diminish losses for the individuals. There will be extreme pressure to take marketing positions because of oil volatility, and the risk will now be taken by the individual farmer. Forward marketing and hedging was done by the national pool operator, which could spread the risk over all the Australian harvest. For the first time in 60 years there will be no body chartered to maximise returns to growers. We still do not know how the premiums for quality Australian wheat will be preserved. We do not know how multiple buyers will gain fair access to the storage, handling and shipping facilities which are, effectively, state based monopolies. Nor do we know how the ‘industry good’ benefits of the single-desk manager will be continued.

The core question remains unanswered in the legislation before us: how will a multitude of licensed exporters compete effectively against subsidised growers overseas, especially to single-desk buyers? Whatever the differences now between the coalition parties on wheat deregulation, the fact remains that, if the Rudd government had not won the election, we would not now be facing the dismantling of the single-desk export marketing system. Today is a terribly sad day for Australian agriculture, and wheat-growing families and communities. Let every senator cast their vote in the full knowledge of the consequences which I have outlined—as told to me by the growers. The Nationals are their voice. If only there were more of us.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

In a place and a profession where momentous legislation often occurs, the Wheat Export Marketing Bill 2008 and the Wheat Export Marketing (Repeal and Consequential Amendments) Bill 2008 we are now debating must rate very high in historical moments. The bills before the Senate have the effect of ending the single-desk marketing arrangements in wheat. It is the last of the significant, certainly national, orderly marketing arrangements in the rural sector. It is certainly a significant event for the rural sector, both economically and culturally. It is also the last real icon of our coalition colleagues, the National Party of Australia, that clearly defines them in politics from every other political party, and arguably it is the most endearing icon of the National Party—and like brave Mohicans they make their stand tonight.

I respect my National Party colleagues’ conviction as being one founded in their economic belief in what is best for the wheat growers and equally in what is a strong cultural and political attachment to orderly marketing, to the single desk and to the old Wheat Board. However, on all aspects I cannot agree. In short, times have changed and there is a difference between remaining true to an idea or to an ideology and clinging to an obsession.

Given all the circumstances that have prevailed over the past decade and more, in particular the findings handed down by the Cole royal commission and the advent of the Labor government, it has now become impossible to breathe life back into the single-desk arrangements. It is my firm belief that it is in the best interests of wheat growers now and into the future to proceed with the principles outlined in the legislation. I have taken a particularly studied interest in this legislation, given that in the parliament in the past I have been a strong defender of the single desk, to the point of having crossed the floor on one occasion myself. However, when this occurred there was still a wool floor price, a regulated dairy industry and high tariff barriers over agricultural products—and the Berlin Wall had not fallen. It was a different time.

Since then, every rural industry right through to the farm gate has faced some form of restructure and deregulation. Either the old arrangements have imploded, such as the wool floor price, or restructure has been brought on with the advent of the National Competition Policy, such as in the dairy industry. The National Competition Policy reform of 1995 was introduced as an imperative doctrine for Australia to meet the future challenges of an increasingly competitive global market. Factors such as the communications revolution in the latter half of the 20th century, the turning of all the formerly communist states to market economies and the establishment of the World Trade Organisation have all influenced global changes—and to Australia’s credit we were prepared to adapt to the changing world.

I add that all major parties supported the tenets of the National Competition Policy. With its introduction it was inevitable that greater scrutiny over orderly marketing arrangements would occur. In fact, orderly marketing and national competition are just about mutually exclusive. In recent decades the Commonwealth and state governments have deregulated single-desk style arrangements such as those for sugar, rice, barley, cotton, dried fruits, eggs and, as mentioned, wool. In the coalition’s time in government, the largest rural sector that experienced deregulation was the dairy industry. It was a deregulation facilitated by the coalition government through the states. It is worthy to note that the dairy industry restructure was supported by an exceptionally large restructure package.

It has always been understood by the coalition that these rural restructures do bring short-term upheaval, economically and socially, because of the predominance of family farmers and the challenges they have to meet. The Liberal Party’s position with regard to the single desk has always been up-front and honest. On 22 May 2007, the then Prime Minister, John Howard, said:

If growers are not able to establish the new entity by 1 March next year, the government will propose other marketing arrangements for wheat exports. Let me make this clear to the House. The options available would include further deregulation of the wheat export market.

In stark contrast, as other speakers have mentioned, the Labor Party’s policy platform and Mr Rudd’s own personal commitments before the last election led farmers to believe they would maintain the single desk if elected. Well, they have been elected and they are abolishing the single desk.

While this is the macro influence over the marketing arrangements, I return to an earlier point which was effectively the downfall of the single desk. The findings of the Cole royal commission utterly discredited the operations of AWB(I), particularly those that managed the public company, and from the commission’s report came the collapse in public and grower confidence in the marketing arrangements being held by AWB(I). As a consequence, the coalition government issued the power to issue export licences to the minister of the Crown. While this was necessary, it was only ever going to be short term. The changes implemented by the coalition were unsustainable. So in truth, like the wool floor price, the single desk had imploded—regrettably.

Moreover, since the election of the Labor Party to government, they have made it clear that there is no going back. Perhaps with no Cole royal commission or Labor government the single desk would still be in place, but reality bites. Equally, from the Senate inquiry into these bills, the AWB itself made it clear that it neither sought nor desired, nor believed it financially possible, to revert to a single-desk arrangement. Therefore, the Liberal Party must deal with the reality of the new government’s proposed wheat-marketing arrangements and the consequences of using our majority in the Senate to reject the bills.

Firstly, the coalition will only hold the majority vote in the Senate until 30 June 2008. The rejection of the bills will simply see the government re-presenting the new marketing arrangements post 30 June to the new Senate, which the coalition does not control. In short, the coalition’s actions could be short-lived tokenism. Secondly, a rejection of the bills in the Senate before 30 June will create uncertainty in the wheat market, to the detriment of growers, grain merchants and financiers. It was clear from the committee hearings that all parties involved in the industry believed it was critical to have certainty as to the marketing arrangements for the forthcoming harvest and beyond. It is not perfectly clear what arrangements would be reverted to should the new arrangements be rejected in the Senate before 30 June. The most likely scenario would be the Wheat Export Commission issuing unaccredited licences. This would be unsatisfactory and particularly detrimental for wheat growers.

Further, within the context of the modern economy, there is a philosophical matter that drives me to support the principles of this legislation, and that is the freedom of the individual to choose how and to whom he or she wishes to sell their wheat. This is a principle which all growers already undertake in the domestic market. It is also a principle all growers undertake when they choose to rotate their crop. For example, many wheat growers also grow canola and sell the canola into a deregulated export market. Added to this there is the abundant evidence that individual growers have taken up with entrepreneurial spirit the changes to sell their wheat in a deregulated container market, or bags and boxes market, as it is called. Figures show that this market is bursting at the seams after its deregulation a few years ago by a coalition government. This is an export market that wheat growers are selling into at premium prices. It is proof that wheat growers are capable of self-marketing and of making individual financial decisions in their best interests in international markets. In fact, the growth of this market undercuts any contemplation of a return of the single desk, which requires a near 100 per cent delivery to the pool. The new export market would have to be shut down. It would be a case of trying to unscramble the egg.

Ironically, though, all is not lost for the true believers, who I see have left the chamber. The choice to collectively bargain still exists through the Trade Practices Act. It was an amendment moved by the previous government to make it easier for small business and farmers to legally group together as sellers. Where it is deemed advantageous I am sure this will occur, as it has already been mooted by farmer representative bodies such as the Victorian Farmers Federation. Obviously a block of sellers acting in a market of many buyers will increase farmer market power.

Having outlined the principles of my support for this legislation, there is nevertheless a serious danger that the new arrangements of multilicensing, with its existing industry structure, may fail. The danger is that the grain merchants will gain undue market dominance, rendering the growers vulnerable to predatory pricing. This is the worst nightmare for growers. A central feature in the committee hearings was the question of access to ports by exporters. Given that port terminals are in the control of a few bulk handlers, industry stakeholders—in particular AWB—believe there is a distinct possibility of these bulk handlers limiting access to their port terminal facilities or undertaking other anticompetitive behaviour such as discriminatory pricing. The Senate committee hearings, in which I was a participant, bore out the potential problem, witness after witness. The only group who believed there was no problem were the bulk handlers themselves.

The Allen Consulting Group, in their submission to the committee, made the following comments, which adequately explain the serious concerns regarding access to ports:

There is no export grain terminal within Australia where there is separate ownership or management of receival, storage and ship-loading assets. At each grain terminal, these various assets are owned and managed by a single entity—

other than in one instance, which is in Victoria. They go on:

If the BHCs were to receive accreditation to export bulk wheat, and hence compete directly with AWBI, there will exist a strong incentive for them to use their market power to reduce competition in the downstream marketing of export wheat.

They go on to say:

… it is necessary to consider more broadly those factors that have the potential to limit competition in the export wheat supply chain (as discussed in Chapter 2). This is to ensure that the objective of producing a more competitive export wheat market is not stifled due to the characteristics of the export wheat supply chain itself.

In short, regional monopolies could occur unless there is a proper access to port regime. While the bills refer to an access undertaking as accepted by the Australian Competition and Consumer Commission, there is a distinct lack of detail and criteria relating to the objectives of the access test. Without the government addressing this matter in more detail, the new marketing arrangements are subject to failure. The wheat growers’ livelihood would be severely affected by anticompetitive behaviour at the ports. Therefore, it is critical for a fair access regime to be implemented and for the regime to be overseen by the ACCC. Added to a fair access regime must also be greater detail about the terms and conditions to be provided with respect to price, identification of wheat stored and its location, and loading times. Regulators, growers, traders, farming organisations and the Senate inquiry have expressed concern about the impact of the bulk handlers having greater access to information than other industry participants.

The benefits of providing transparent and timely data to industry participants are obvious. Growers and other industry participants, especially small to medium sized operators, will be able to use their increased access to data on wheat stocks in storage throughout the supply chain to manage both supply and risk. The reduction of market distortions is another benefit. For example, the provision of timely and transparent industry data to growers will enable them to avoid holding wheat for later sale when, had they had access to the relevant information, it would clearly have been better to have sold it earlier—in other words, transparent market signals.

In conclusion, open, transparent and monitored competition is the key to the new wheat marketing laws. It is therefore incumbent upon the parliament and the government of the day to establish a review of the arrangements in some two years so as to be assured that the intent, and indeed the objectives, of the restructure are being met. After all, the livelihoods of some 27,000-plus wheat growers and a vital export industry are at stake.

Judith Adams (WA, Liberal Party) Share this | Link to this | Hansard source

This evening I would like to take the opportunity to speak about the future of wheat marketing in Australia. I support the Wheat Export Marketing Bill 2008 and the Wheat Export Marketing (Repeal and Consequential Amendments) Bill 2008 with some amendments, which were flagged by the Leader of the Opposition, Dr Nelson, in the House.

The Wheat Export Marketing Bill 2008 was introduced with the Wheat Export Marketing (Repeal and Consequential Amendments) Bill 2008. This legislation establishes a system for regulating the export of bulk wheat. It establishes a new industry regulator, Wheat Exports Australia, known as WEA—which will control bulk wheat exports by managing an export accreditation scheme—and sets out the functions, powers and membership of Wheat Exports Australia. It authorises Wheat Exports Australia to formulate a wheat export accreditation scheme by legislative instrument, which provides for the accreditation of companies as wheat exporters. It also establishes criteria for the accreditation of companies under the scheme, conditions of accreditation, cancellation and surrender of accreditation and reporting requirements. It provides for an internal review of decisions made by Wheat Exports Australia in respect of the accreditation scheme and for review by the Administrative Appeals Tribunal. It also provides for Wheat Exports Australia to maintain a register of accredited wheat exporters which is available for inspection on the internet. It provides Wheat Exports Australia with information-gathering powers and the power to order an external audit of an accredited wheat exporter. It establishes a Wheat Exports Australia special account for the purposes of the Financial Management and Accountability Act 1997. It also establishes a civil penalty regime for breaches of the act and provides for the Productivity Commission to begin to conduct a review of the act and the accreditation scheme before 1 January 2011.

The Wheat Export Marketing Bill 2008 is the result of longstanding and long-lasting effort. It manifests the end of monopoly policies in Australia and marks the start of a free market for wheat. Now, with the introduction of the Wheat Export Marketing Bill 2008, wheat growers, for the first time since 1939, have the right to decide to whom they will sell their grain and at what price. This is a major step for farmers in Western Australia and South Australia, who export some 95 per cent of their grain, due to the lack of a domestic market. As a wheat grower from Western Australia, this has been a great frustration for my family and I and for many of our colleagues. The deregulation of the domestic market in the eastern states has given them the choice as to whether they sell on a deregulated domestic market or pool their grain, as they did with the AWB. That was also the idea of the national pool, with what was really the receiver of last resorts. So, they did have choices, whereas we have not had those choices. Currently, wheat growers in WA and South Australia are almost totally dependent upon the export market for their annual income.

The new legislation is a great opportunity for wheat growers to meet the requirement of a fast-moving international market, especially in times of increasing demands and rising global food prices. Many growers are ready for change, and I have noticed a considerable shift in the views of Western Australian growers over the last two years. They have come to terms with the possibility of a deregulated market and the advantages that this can bring. I believe that the former coalition government’s appointment of the Wheat Export Marketing Consultative Committee, chaired by John Ralph, has been largely responsible for this change. The committee undertook extensive consultation with the Australian wheat industry, particularly growers, about their wheat export marketing needs. The consultation process included 26 public meetings in major wheat-growing regions of Queensland, Victoria, New South Wales, South Australia and Western Australia.

I attended five out of the eight meetings held in Western Australia and was amazed at how the growers’ views changed after hearing the evidence at these meetings. I would like to read some quotes from growers who did attend these meetings. At a meeting in Perth, a Badgingarra farmer said that it was a basic denial of his rights to force him to sell his wheat to AWB. A farmer from Cranbrook, which is in the south of the state, agreed, saying that as an individual grower he wanted the ability to choose where he sold. A Katanning farmer from the Great Southern region said that, in the interests of the industry, it was time to move on; deregulation was inevitable but not necessarily immediate. Interestingly, a farmer from the Merredin meeting said that growers who supported deregulation were selfish. An argument came against this statement, which was heard at the Perth meeting, when a farmer from the Midlands area, supporting deregulation and speaking on behalf of 34 other like-minded farmers, said that it was not his responsibility if another farmer made a bad business decision. A Calingiri farmer said that he was insulted by the insinuation that growers could not be marketers. He wanted choice. A farmer from Eneabba was bewildered as to how, in this country, the outdated system of the single desk was still in place.

The point I am making is that, all of a sudden, with information, growers have really started to think about their options and whether this legislation is going to help them. I think the main thing is the bottom line. As has been shown with the deregulation of bags and containers, farmers—especially in South Australia and Western Australia—have had a choice and have been able to make more dollars for their grain. Unsurprisingly, and as we have heard tonight from my colleagues, there are still farmers who have some reservations about whether they have the skills to market their own wheat. In my opinion, it is crucial that the grain groups and farmers continue their dialogue, sharing their ideas and concepts so that they can get the best possible deal.

I will just pause here to quote from the Countryman and the Farm Weekly, which are our two major country weekly newspapers in Western Australia. In the Countryman of Thursday, 12 June there was an article headed ‘Wheat’s new dawn: Emerald a new marketing gem’ which said:

The independent specialist grain pool manager and marketing group, Emerald, says the new wheat marketing environment will see widespread changes in the way Australian wheat is marketed and the options available to growers, although aspects of the market such as pools will remain an integral part of the new marketing landscape.

Emerald deputy chairman Mike Chaseling said while growers would have more choice and flexibility than ever before, they should not expect wholesale differences in the product on offer.

He said Emerald was ready for the new era, having already pioneered major innovations in the way pools are offered and managed.

The Western Australian Farmers Federation have gone into partnership with this company and will be providing a pool for their members. Then we have an article entitled ‘A local team you can trust’, which said:

With a strong track record of performance, Plum Grove has established itself as a pool manager that WA growers can rely on.

And we have ‘Using a pool you can trust’, which said:

When choosing your pool make sure it has

1. Clear objectives

2. A solid track record of performance

3. Strong financial backing

4. Experienced pricing managers

5. Access to premium markets

Another article is headed ‘No need to be confused’ and reads:

Growers will be faced with unprecedented levels of choice this season.

With the rapidly changing landscape of grain marketing, there are opportunities to profit from smart decisions when selling their crop.

Exciting? Yes, but with this comes the responsibility of ensuring you are in a position to handle the huge increase in information and required decision-making.

It was on this premise that DailyGrain was founded last year.

These organisations, plus a number of others, are starting to move forward and offer a service to our farmers so that they can really make an informed decision about what they are going to do when we have a deregulated market.

I believe that, by keeping the dialogue in a steady flow, a deregulated market is the best way to ensure that the wheat industry continues to prosper. An example of this was when the former coalition government deregulated bags and containers, on 27 August 2007. Since then, Australia has broken shipping records for wheat exported to overseas grain markets in containers. Figures released by the Export Wheat Commission in mid-May highlight this boom. The figures clearly show that non-bulk wheat exports continue to increase, with approximately 1.5 million tonnes exported in the eight months since non-bulk wheat deregulation to 30 April 2008, compared with 550,000 tonnes exported during the same period in 2006-07. Since last August, wheat exporters have managed to explore new marketplaces, now selling to a number of countries they could not get permits for in the past—for example, Malaysia and Indonesia, two of the largest destinations.

That is just one example of the positive benefits a deregulated market can give to individual growers—and the majority of growers are aware of these benefits. One such grower is Kim Halbert, a wheat farmer from Three Springs in WA’s midwest. He gave evidence to the Senate Standing Committee on Rural and Regional Affairs and Transport inquiry in Perth. This inquiry undertook extensive consultation with the Australian wheat industry, and particularly growers, talking about their wheat export marketing needs. When we first set the agenda for the committee inquiry, we were to hold one hearing in Canberra, one in Sydney, one in Melbourne, one in Brisbane, one in Adelaide and one in Perth. With the submissions that came forward, we ended up doing two hearings in Canberra and one in Perth. As a member of that committee, I was quite amazed that growers, especially those very concerned growers in the eastern states, did not take the opportunity to gather their colleagues and have enough submissions in Brisbane, Sydney, Melbourne and Adelaide. I was very surprised by that. Some of them did come to Canberra to give evidence, but we certainly did not have the number that we expected when we first set the agenda for the committee.

Mr Halbert said in evidence in Perth that Western Australia had a very small domestic market and, as a result, Western Australian farmers rely on the wheat export trade and have not had access to a competitive system in the past. As I said, in stark contrast to the situation in Western Australia, eastern state growers have had this choice and tend to use the single desk as a backup whenever they cannot sell their grain into the domestic market. Mr Halbert stated that deregulation is the best prospect for Western Australian growers to have a choice about how they sell their wheat and to whom they sell it. It is the best opportunity for them to maximise profits for various wheat varieties, offering the chance not to be restricted to dealing with only one company.

With the new legislation, growers will have more choice and flexibility than ever before. However, they must not expect wholesale differences in the products on offer. Many grain pool managers, as I have outlined, have already prepared for the change and have readjusted their programs to be tailored to suit the needs of growers. The benefit of deregulation will be that growers can now select products and payment options that best suit their business.

The single-desk marketing system has failed Australian wheat growers for many years. To me, there has always been an inherent conflict of interest for AWB between satisfying its shareholders and maximising grower returns. The lack of competition has led to inefficiency, high costs and substandard management, creating a situation where wheat growers are at the bottom of the food chain in terms of receiving the true market value for their grain. Single-desk marketing has failed to maximise grower returns. Many independent studies demonstrated that the costs of the system were too high, exceeding the illusionary benefits by far. As a monopoly, the AWB(I) obtained total power in controlling what deals wheat growers received if they sold their grain overseas. There is clear evidence that AWB(I) offered discounts to sell into certain markets. As a result, they accepted less than the world price and counteracted the growers’ interests, which is to achieve the best price possible.

The report released today by the Export Wheat Commission has found high-risk hedging strategies by AWB cost farmers $260 million in one year. The monopoly bulk grain exported did not maximise returns to growers from its 2005-06 national pool. Despite this, some growers still support the system which gives them the illusion of safety, offering a buyer of last resort. But, unfortunately, this is only an illusion. There is no buyer of last resort and there never has been. Under the present export marketing rules there is only a receiver of last resort, namely AWB(I), who has no obligation to pay a single cent to growers. They offer just a pool where the grain goes—nothing more. Yet the buyer of last resort is the most quoted argument to maintain the single desk. It is an argument which cannot convince me.

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

You missed some farmer in Western Australia, Judy.

Judith Adams (WA, Liberal Party) Share this | Link to this | Hansard source

I probably have! I now want to speak briefly about these regulations in the bill which I cannot support and I call on the government to amend. The most important change must deal with the access to the export accreditation scheme. The new marketing act will only allow companies and cooperatives to export wheat; individuals are still restricted from exporting their own wheat. It must be done through a company or cooperative. The Liberal Party wants this restriction to be lifted. The new bill must allow individuals to be exempt from accreditation if they wish to directly bulk export their wheat to an international purchaser. Such growers do not require a middleman to sell their crop. Nor should they have to resort to the use of bags and containers if they prefer to bulk export. It is crucial that individuals be exempt from accreditation costs. The bill requires grain traders to pay $12,100 to be accredited to export wheat under the deregulated market. Exporters who are accredited are then free to export any tonnage of wheat to any country in the world during the next three years for that fee. This fee must be lifted from individuals who wish to export their own grain. They need an incentive to pursue their chances in the deregulated market and should not be punished.

I also call on the government to amend the provisions that relate to bulk-handling companies. As outlined by the Leader of the Opposition, Dr Brendan Nelson, these companies face a dramatic change of regulation after October 2009. Prior to this date, accredited exporters who are also providing port terminals only have to publish a statement on their website explaining the terms and conditions under which they will allow other exporters access to their facilities. The government has failed to specify the type of information that must be contained in this statement. For example, access to the whole up-country infrastructure, such as grain receival and accumulation services, is currently left undefined. This has to change.

Bulk-handling companies who own the up-country infrastructure must state that they are willing to provide access to their up-country infrastructure, as well as to ports and the shipping stem. If this is done, the Liberal Party does not understand why the regulations have to change from October 2009. Bulk-handling companies are allowed to operate entirely under their own terms for more than a year—to be precise, for 16 months. If there are no problems reported either on the access to the up-country infrastructure or on the access to ports or shipping stems, why should they have heavy-handed and costly regulation imposed upon them? Let me highlight this point to you further. From October 2009, the current bill requires accredited exporters to have a formal access undertaking accepted by the ACCC, making it a very costly— (Time expired)

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

I rise with pleasure tonight to talk about the Wheat Export Marketing Bill 2008 and associated bill. As with a debate about any industry in transition, particularly an industry which involves members of the farming community, we see a debate that is necessarily not just about farmers’ livelihoods but also about their lives. Therefore, inevitably, it involves much consideration of emotional issues, such as attachments to land and produce, as well as economic and market issues. I hope that I, as many do, bring to this chamber some understanding of the tensions involved in the minds of those who have been contributing to this debate. I come from a wheat-growing family in Western Australia and from a background of representing the interests of farmers in New South Wales for a period of time. I now represent South Australians here in this place.

Farmers have lived with a single desk since World War II. It has clearly performed a very important role, but the times are changing. It is interesting that many younger farmers seem to accept or are more accepting of the need for a move to deregulation, as attitudes to single-desk marketing have evolved over time. We have been subject to strong and intense lobbying by a range of interest groups supporting a range of different proposals. The relevant Senate committee has heard evidence from many who support the legislation and, equally, from many who oppose it. In my home state of South Australia, growers are divided on the issue. The chairman of the South Australian Farmers Federation Grains Council, Peter Treloar, said:

... what growers want is to get on with some secure marketing arrangements and I honestly believe that this debate has been had, it’s been done and dusted and it’s time that our time and efforts were spent on other things.

That very valuable input can be contrasted equally with submissions by groups in South Australia, such as the Chandada Farmers Group, which vehemently oppose the legislation. I, as did many of my colleagues, asked South Australian growers to tell me what they wanted for the future of wheat marketing in Australia and to provide me with their comments on the bill. Their views were as wide and varied as those of other growers across Australia. As a result of those varied views, the Liberal Party has come to its position on the legislation and it proposes amendments which seek to address some of the concerns raised at the Senate committee inquiry and by growers who contacted members of the Liberal Party during that process.

In the Senate committee report, Liberal senators made some additional comments about the need for access undertakings to apply to up-country facilities. However, since that time, we have received further information about the cost burden that could be experienced by such access undertakings and also about some legal complications that could arise from it. As has been foreshadowed by the leader of the Liberal Party, Brendan Nelson, in another place, the party is considering some amendments to the bill. We believe that the amendments will maximise opportunities for wheat growers. The proposed amendments will include amending the objects of the legislation to make it clear that it must advance the interests of growers. The legislation must allow wheat growers who wish to individually bulk export their wheat to an international purchaser to be exempt from the accreditation system. The legislation must be amended to include a review of the system within two seasons to ensure that it is working, and this must be done before any heavy-handed regulation of bulk handlers is introduced. However, given the time-critical nature of the bill, we have put these amendments to the government for its consideration, and I look forward to its response as we proceed to the committee stage.

Many of those who are concerned about the transition of the industry argue that wheat is special and unique. With all due respect, it is difficult to see how wheat is special and unique from the perspective of other agricultural commodities—other than it is the one commodity that has remained with a single-desk marketing arrangement. In that way it is special because it is the last to make the transition. This legislation is in the best interests of wheat growers. The evidence is that, in every other area of agricultural produce where single-desk marketing arrangements used to prevail—for example, the barley market, the oil seeds market and the sorghum market—growers have demonstrated their resilience in dealing with transitions from A to B through to C. Importantly, such transitions have resulted in increased production—for example, the sorghum crop is the biggest ever this year—and in an increased value of production.

Over time, where monopoly marketing arrangements have been put in place in the various sectors, the advantages of market stability and market price, so lauded by those who support those arrangements, have gradually been eroded and, I would argue in respect of the wheat industry, captured by grain-handling authorities and grain marketers but not by growers. Some further evidence of that came to light today with the release of a report by the Export Wheat Commission. It highlighted the fact that AWB ‘shared the profit with farmers but left them all with an unacceptable level of risk’—in this case, losses of $260 million in a year. This, in my view, is a classic and unacceptable example of a monopoly marketer deliberately misusing its market power to line its own pockets when the markets rise and leaving growers to foot the entire loss when the markets go down.

To the comments of my colleagues, I want to add my acknowledgement of the genuine, diligent and determined comments and submissions made by those who oppose the bill. But I believe that the bulk of wheat growers who export wheat, or who grow wheat for the export market, are not only relieved with the imminent passing of legislation of this sort but have spent quite some time preparing for it. My expectation is that, as was the experience with the recent deregulation of the barley market in South Australia, industry will get over it and get on with it. They are ready to do so. The review of this legislation remains very important and needs to be undertaken in a timely manner to ensure that returns are maximised for growers and that any review of the legislation is geared towards that. There are great hopes for the future of the wheat-marketing industry in Australia. Indeed, I consider that it is part of my job in this place to ensure that this legislation delivers results for the wheat growers of Australia.

Mathias Cormann (WA, Liberal Party) Share this | Link to this | Hansard source

As a Liberal senator for Western Australia I support the Wheat Export Marketing Bill 2008 and what it sets out to achieve. I am pleased that the government has taken on board many of the issues and recommendations identified by the Senate inquiry into this bill. Our leader, Dr Nelson, has flagged a small number of further amendments which we believe will improve the proposed system. This legislation will give wheat growers a choice on how to market their wheat. The accreditation of multiple sellers will introduce competition among those who want to sell the growers’ wheat on the export market, helping to ensure that growers get the best available price for their wheat. It will introduce competition and a greater level of transparency into supply chain arrangements, helping to put downward pressure on costs. And, of course, it will give growers certainty in terms of the arrangements that will apply to the export of their wheat from the 2008 harvest onwards.

As policymakers, our overarching objective should be to achieve a legislative framework that enables wheat growers to maximise their returns. The returns that actually matter to growers are not their gross returns but their net returns. I am sure that all senators would appreciate that. The past arrangements have failed wheat growers in that regard. The current transitional arrangements run out by the end of June and they have to be replaced by something that is both workable and bankable and will enable wheat growers to maximise their net returns.

Unlike wheat growers on the eastern seaboard, wheat growers in my home state of Western Australia rely nearly exclusively on exports. Of the wheat that is grown in Western Australia, 90 per cent plus is exported. In some years, Western Australia has made up almost all of the export pool. South Australia is in a similar, if not quite so extreme, position. Growers on the east coast are able to benefit from the advantages of a deregulated market in their main market—namely, the domestic market. In contrast, growers in Western Australia and South Australia under the past and the current systems have been restricted in how they market their wheat in what is their main market—namely, the export market. As the main contributors to the national pool over many years, the Western Australian wheat growers have carried a disproportionate proportion of the costs of the inherent inefficiencies and inequities in the single-desk arrangements.

The most recent iteration of the past system consisted of a publicly listed corporation controlling the single desk and the export of all wheat through the national pool. The system as it existed provided an inherent incentive for the corporation, through its subsidiaries, to maximise its return from the pool, rather than to maximise the net return for the pool and ultimately growers. I will just pick up on a few examples which have been covered in the 2007 Growers report by the regulator, the Export Wheat Commission.

In making an assessment of the freight charges that were applied to a sample of 39 vessels, the Export Wheat Commission found that exporting wheat growers would have been $14.5 million better off if independent brokers had been used and the services had been tendered in the open market, rather than keeping the freight services in house through one of the AWB subsidiaries. Despite this very concerning finding, to date the Export Wheat Commission has not made any further in-depth assessment, as far as I am aware, of the additional costs carried by exporting wheat growers across all of the 733 vessels. However, Western Australian industry experts estimate that the figure across all vessels is well in excess of $200 million. That is $200 million that came off the net return for exporting wheat growers and went straight into the then AWB bottom line and into a combination of dividends to shareholders and performance bonuses for then AWB senior executives.

Answers provided by the Export Wheat Commission during the Senate inquiry about AWB’s hedging activities under the old system also point to an inherent flaw in the system. Again, the incentive to maximise returns from the pool for shareholders was in direct conflict with the stated objective to ensure a maximum return for growers. To give a demonstration of that I will read some extracts of an article that appeared in the West Australian on 20 April 2007. When facing criticism for not letting the share market and farmers know about the extent of the more than $360 million in losses it was facing on the futures market, AWB’s defence was that ‘it was not material to its share price,’ that in effect it had no impact on its share price. Why? I quote the article:

... an AWB spokesman said potential futures losses were borne by the pools, and therefore growers, not the company. “It’s not material to AWB Ltd and there was no need for disclosure,” he said.

So, if there is an upside and there is a profit from futures trading, growers have to share it with AWB Ltd and AWB Ltd shareholders. But, if things go wrong, the cost is carried by the pool in its entirety. I am not even criticising AWB on this; they were operating in a flawed system. I am criticising the system that facilitated this circumstance where AWB Ltd was able to speculate on the futures market without itself facing the consequences of taking on excessive risk. Instead they were able to benefit from any gains as a result of taking on that risk. So the benefits of futures trading were shared between AWB Ltd, its management, shareholders and growers, whereas all losses were passed on to the pool and growers. How is that fair? Pursuing its shareholders’ best interests rather than the growers’ best interests is of course what AWB would do, if that is what they can lawfully do under the protection of a statutory monopoly on wheat export marketing arrangements. However, as policymakers we should not be continuing to endorse a system that allowed this to happen.

There clearly is a great diversity of views among growers, as there is a diversity of views among those who want to preserve a single desk. I have considered very carefully all views and all arguments that came forward in the course of the Senate inquiry. Naturally, I approached the issue from the perspective of someone who believes in the benefits of a free market. On balance, I believe that the majority of wheat growers in my home state of Western Australia have come to the view that the days of the single desk as it existed in the past are over. There now is an anticipation by many that they will be able to take advantage of the opportunities under this new system.

I will read out a couple of quotes from evidence given by wheat growers from Western Australia who appeared before the Senate inquiry. The first is from Mr Peacock, who is a 40-year-old farmer from the mid-west of Western Australia:

I am a fourth-generation wheat grower. I strongly support the legislation. As a young man coming into agriculture, probably one of the overwhelming sentiments that farmers talked about was that the big hassle of being a farmer is that you are a price taker. I believe that under the old legislation we were the ultimate price takers. We had no option to do anything else—to be entrepreneurial, to be a free marketer or to find a way to value-add our product. There was no incentive whatsoever to do that. I believe that under this legislation, for the first time in my life—and I did not believe I would see it in my lifetime—small growers like me have at last the opportunity to employ some of our entrepreneurial skills to try to come above the average. There is incentive now to do better than the average, to do more than just be a subsistence survivor.

And this is from Mr Halbert:

I am here in a private capacity. I am a grain grower from Three Springs, which is 300 kilometres north of Perth. ... I am strongly in favour of this legislation. In WA we have seen a cooperatively owned grain pool which held the single desk for barley, canola and lupins. The competition introduced when the GLA were introduced—and they have even admitted this themselves—forced them to sharpen their pencils. Under a legislated monopoly there is no incentive for them to seek new markets or for them to reduce supply chain costs and general marketing costs.

Even from those who have traditionally been opposed to deregulation of the single desk, there is an acceptance, albeit a reluctant one, that this new system of accrediting multiple sellers will become a reality from this harvest onwards—indeed, the Western Australian Farmers Federation have already entered into and announced a commercial arrangement with the Emerald Group to offer a special pool to members of the WA Farmers Federation in anticipation of this bill becoming law.

Even those who continue to support the single desk do not all support the same single desk. Talking to wheat growers in Western Australia, it is clear that some are talking about the statutory single desk that used to be underwritten by the Commonwealth government. Others want to see the single desk and the right of veto remain with the publicly listed AWB as a statutory monopoly. Others say we should keep the single-desk arrangements with AWB ‘with some adjustments’. Others are simply worried about the unknown. We should take those concerns quite seriously and continue to communicate with farmers, who are worried about the impact of this legislation, to ensure that they can take best possible advantage of the opportunities offered by this legislation.

The reality is that, with the end of the single desk, wheat export arrangements will move towards similar arrangements that apply to the domestic wheat industry, other grains and bagged and containerised wheat. And they will move towards the same deregulated system as operates for virtually every other commodity—including those that are often produced on the same wheat belt farms. Even the AWB under its new management is getting ready for the new world and embracing the system proposed under this legislation. During the Senate inquiry, I referred a number of times to a press release put out by the AWB Managing Director, Gordon Davis, where he 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.

Some legitimate concerns were raised during the Senate inquiry, particularly regarding port access and the potential behaviour of the legacy monopolies held by CBH, GrainCorp and ABB over storage and handling infrastructure. It is very important, however, that the system be allowed to evolve commercially without being strangled by excessive regulation. I guess the point here is that we have to get the balance right. We have to ensure that we take those concerns on board and find a way of responding to them and addressing them appropriately without strangling any attempts to resolve and address some of these issues, including legacy issues, commercially. I believe that this legislation, once amended in line with the amendments floated by Dr Nelson, will get the balance right. In my home state of Western Australia, CBH has made a good start with its grain express model but, like all participants in the market, CBH will need to act honestly and commercially if it is to retain the goodwill of growers.

As I mentioned in my introduction, this legislation will give wheat growers choice in marketing their wheat. It will introduce competition among those who want to sell the growers’ wheat on the export market, helping to ensure that growers get the best available price for their wheat. It will introduce competition and a greater level of transparency into the supply chain arrangements, helping to put downward pressure on costs. And it will give growers certainty in terms of the arrangements that will apply to the export of their wheat from the 2008 harvest onwards. Most importantly of all, it offers a better system to wheat growers aiming to maximise their net returns and, as such, I believe it should be supported by all.

In closing, I would like to congratulate the Pastoralists and Graziers Association of Western Australia for having pursued this issue with great rigour and integrity for some time. And I would like to congratulate my Western Australian colleagues Wilson Tuckey, the member for O’Connor, and Senator Judith Adams for their tireless efforts in helping to bring about the change that we are debating today. Wheat growers across Australia, particularly in our home state of Western Australia, will be better off as a result of their persistent efforts over a long period of time.

Kerry O'Brien (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

It is a pleasure to be able to address the Wheat Export Marketing Bill 2008 and the Wheat Export Marketing (Repeal and Consequential Amendments) Bill 2008 and say that the Labor Party are doing just what we promised to do before the last election. This is not a policy that was developed after the election but one that was clearly enunciated before the election, and I repudiate the comments of Senator Minchin suggesting that that was not the case. Clearly, our policy was announced on 10 October. It was debated in the community. It has been suggested that a majority of wheat growers oppose it. But we did hear at our Senate inquiry in Perth that the member for O’Connor campaigned effectively for our legislation. He was opposed by a National Party candidate who campaigned against the legislation, and guess what? The National Party candidate ran third, the Labor Party unfortunately ran second, and the member for O’Connor was returned. That says to me that the arguments that the Labor Party put forward, which were adopted by the member for O’Connor, were supported by the electorate.

In fact, when you look at the history of agricultural policy in Australia over the last 25 years, guess who has been the leader? It has been the Labor Party. In 1989 it was Labor which deregulated the domestic wheat market. A lot of the growers who were here protesting today have been the beneficiaries of the deregulation of the domestic wheat market since 1989. And guess what? Back in 1989 or 1990, the sky was going to fall in. Deregulating the domestic market was going to destroy wheat growers. Of course, it did not. The fact of the matter is, as we have heard from Senator Cormann, Senator Adams and others from Western Australia, that the deregulation effectively advantaged the wheat growers on the eastern side of Australia relative to growers in other parts of Australia. You might ask why. The reason is that those growers had more markets to sell their wheat to. They had more buyers for their wheat. As a result, they could take the best price. They could put their wheat into the domestic market at the best price they could get, and if that was not good enough they could put their wheat in the pool. So they took the best of both worlds. It is funny trying to convince some of those growers who are receiving that benefit that a system being put forward by Labor—which actually gives growers access to more buyers—is better for them, when obviously the system that Labor implemented back in 1989 created just that circumstance for wheat growers in eastern Australia. It is a pleasure to be able to say that Labor again leads the debate on market arrangements for important commodities for Australian farmers.

We did hear that only last year the former government decided that it would deregulate containerised and bagged wheat for the first time, effectively allowing exports of containerised wheat without a permit from the Wheat Export Authority or, as it became, the Export Wheat Commission. The fact of the matter is that in 2003 Labor moved an amendment to do just that—an amendment which was opposed by the coalition, by the National Party and the Liberal Party. It was suggested when the deregulation of exports of containerised wheat occurred that we would not see a great increase in the amount of wheat sold, because there were not enough containers, because it was too difficult and because the cost of freight was too high. A whole lot of reasons were put forward as to why that was not a significant reform. But we have heard from Senator Adams what a significant reform it was in Western Australia. The reason it was significant was that it gave growers in Western Australia more buyers to sell their wheat to. And what did they do? They took that opportunity.

This legislation put forward by Labor creates the opportunity for wheat growers around Australia to have access to more buyers of their wheat and more markets—niche markets and different types of pool opportunities. There will be pool opportunities because there are many who wish to sell into the international market who will be keen to offer pools, and that indeed was the evidence that the Senate committee took when it conducted its inquiry earlier this year. So Labor has put forward yet again an important reform for an important sector of Australian agriculture.

Back in 1989, when we proposed the deregulation of the domestic market, it was the Liberal Party who decided that Labor was following the correct path, and it made the correct decision and supported Labor. It was the National Party who then said: ‘The sky is going to fall in. This will be a terrible thing for wheat farmers. It will destroy growers.’ And they led protests, particularly on this side of the continent. Of course, they cried wolf then, and we hear them now with the same arguments. What they are saying now is not exactly but in general the same as they were saying back in 1989—that a reform allowing wheat growers access to more buyers of their product will be bad for them. You only have to keep saying it to understand what a ridiculous proposition it is.

We have seen a number of areas over the last decade where some of the marketing arrangements for export of Australian products have been deregulated. Some have been at a state level and some have been at a national level. There are various views of the deregulation of the dairy industry, but let me tell you this: at the moment, the dairy industry is attracting higher prices than it ever has. Those farmers who restructured their operations and who have not been blighted by drought are doing very well, and the international market is booming. But that was not what we were told would happen when the market was deregulated.

I suggest that what is going to occur now with the reform of export-marketing arrangements for wheat is that we will see a variety of pool operations established. This legislation, I believe, will provide for the accreditation of grower cooperatives and groups. Even other smaller entities will establish themselves in the market, and farmers will club together to sell their own grain. Farmers will be looking to sell into markets that have not been exploited properly by the monopoly exporter AWB. Farmers will be looking for opportunities to get superior prices for types of wheat that can be marketed specially in certain markets that are looking for small quantities of high-quality wheat.

There will be markets where Australian wheat is purchased to be blended with wheat from other continents, as it is now. I believe that is a factor that operates significantly in South-East Asia at the moment and has the potential to be expanded where Australian farmers will be dealing with buyers from those markets who will be keen to take their wheat where they can blend it with, say, Argentinean wheat to get the qualities they want for the flour they need to make the products that they want. All of these opportunities will be developed—opportunities that have been denied to Australian farmers for many years and would continue to be denied if the National Party, the party that claims to represent the farming sector, had its way.

The Labor Party appreciates the support of the Liberal Party in this debate. I do not think it is fair of Senator Minchin to suggest that we did not flag these changes before the election, because we clearly did. I do not think the way the National Party has run their scare campaign in this debate has been appropriate, working upon the fears of what many growers see as an unknown environment that perhaps they have not developed the understanding to be able to operate in as best they can. Rather, it would have been good to see the National Party try to think of how the sector they represent can achieve the best it can in the world economy. Frankly, treading water with the sort of marketing arrangements that have stumbled along since 1997 is not in the best interests of the Australian farming community. It is a set of marketing arrangements that would doom many farmers to poverty or bankruptcy.

In travelling the country before the election, I was the beneficiary of advice from farmers in small and large properties in various parts of this country. There are a great many farmers who want to grab this sort of opportunity with both hands and get out and do the best thing that they can with their enterprises, get the best prices that they can for their product and get themselves into a position where they control their own destiny. This legislation will achieve that. I am pleased to say that I believe it will now be passed. Again, when we get past the arguments from the opposition National Party, who as usual are saying the sky will fall in over this legislation, we will see this develop the way that deregulation of the domestic market has seen opportunities develop for markets of wheat in eastern Australia.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I seek leave to incorporate a speech from Senator Chris Ellison, which was circulated to the whips prior to me entering the chamber. There is one minor amendment, which does not alter the substance of the circulated speech but just clarifies Senator Ellison’s qualifications to speak on the matter.

Leave granted.

Chris Ellison (WA, Liberal Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

The incorporated speech read as follows—

Mr President, as a Senator representing Western Australia which is a major producer and exporter of wheat, I believe that the wheat market should have the opportunity as much as is possible to export wheat to whomever it wants. This is an issue in which I have a close involvement over the last 18 months. In the WA Division of the Liberal Party, we have long felt that West Australians did not have the opportunities that we could otherwise have were it not for the single desk.

There is no doubt that there has been considerable debate over the preferred wheat marketing arrangements between individual wheat growers.

Last year, the Coalition, whilst in government, set in train the first steps to reforming the wheat export arrangements in Australia. As the current arrangements expire at the end of June this year, there will be further uncertainty among wheat growers, grain merchants and financiers if these Bills are not passed. It was made clear during the hearings of the Senate Committee on Rural and Regional Affairs and Transport that all parties involved in the industry want certainty and that the industry is at a critical juncture without the marketing arrangements for the coming harvests and beyond.

It appears that the industry has accepted, admittedly unwillingly from some parties, that a multi-licensing system in some form will be introduced. It is clear that there is now no going back to the single desk marketing system.

If the new arrangements were to be rejected prior to the changeover on 1 July 2008, wheat growers would be left high and dry. Consequently, the proposed Bills should be supported with a number of amendments. These amendments arise from the Senate Committee which conducted a comprehensive inquiry into these Bills.

Objectives

Firstly, support needs to be provided for the inclusion of the overall objectives of the Bill. These were explained in the Senate Committee Report in brief. While the proposed objectives recognise the provision of choice improved by increased competition, transparency and security for wheat growers, the role of the regulator does not need to be specified in the overall objectives. This should be dealt within Part 5 Division 1, where there establishment of Wheat Exports Australia and its functions, powers and liabilities are defined. This is a much better place for dealing with the regulator.

Accreditation Eligibility

It is clear that the accreditation needs to provide additional choice for growers in the marketing of their wheat. It is imperative that as many participants enter the market as possible, as it is in the best interests of wheat growers to have many buyers competing for their wheat. More competition generally provides for a higher price at the farm gate.

It was therefore suggested that wheat growers should be exempted from the Act if they wish to directly export their own wheat to a third party. I believe this is an inherently sensible idea and consequently strongly support and endorse this. Wheat growers who have the expertise to establish direct links with third parties deserve to be encouraged in their commercial endeavours rather than be subdued by red tape and have their hard earn profits taken by middle men. Regardless of their incorporative status, individual wheat growers should not need to be go through the full accreditation process in order to sell their own wheat directly to a third party.

This could be achieved through a provision in Part 2, Division 1. It would exempt an individual wheat grower where the individual wheat grower:

• Provides a statutory declaration to the WEA stating that the wheat has been solely produced by the individual wheat grower;
• Provides supporting documentation to the WEA evidencing the contract for export sale by the individual grower to a third party, including such information that is protected by commercial-in-confidence provisions; and
• Complies with all applicable Australian quarantine and quality requirements as ordinarily apply to exported wheat.

Minimum Standard Trading Terms

During the hearings, there were a number of calls for minimum standard trading terms, to include a number of issues. Transparent and easy to understand information is important for growers. As such, there should be a number of industry standards to include truth in pricing and minimum standard payment schedules.

One recommendation of the Committee was the provision of transitional financial education and counselling should be provided through appropriate channels such as existing farmer organisations for three to four years. This could look into a number of areas including marketing and risk management and it would help existing producers readjust their business plans in their readjustments to the new market operating environment.

The Access Test

In a more competitive market environment, it is vital that there is non-discriminatory access to the bulk storage and handling facilities that are required for all market participants. This access has to apply to a number of issues including ‘up country’ storage facilities, port storage facilities, shipping stem, and information. A bulk handler, the Co-operative Bulk Handling, has a proposed Grain Express initiative which could both provide efficiency and choice.

All the non-bulk handling company potential market participants agreed that such access is necessary for the optimal operation of the proposed new wheat marketing system. Of course any such system needs safeguards against price fixing however this can be achieved.

The three bulk handling facilities are trying to find a solution to the issues associated with the supply chain for wheat growers and this is to be commended.

Information

It is important that there is timely and accurate information on the grain stocks in any area. I believe that reporting should not be just be daily, but also weekly and monthly, run by the ABS and/or ABARE. This disseminated information would:

• Ensure that market participants can properly price their product and/or services, so growers can access this information;
• Be gathered from sources including growers, exporters and end-users;
• Identify forecast crop tonnage, actual crop tonnage, tonnage available for sale and tonnage exported.

Wheat Export Marketing (Repeal and Consequential Amendment) Bill 2008

On reading of the Bill, it does appear that the WEA will not be subject to FOI legislation. This is inappropriate and thus the Bill should be amended so that the WEA is subject to FOI legislation and enquiries.

Review of Legislation

Finally, I support the Committee recommendation that there is a review of the legislation in 2010 with the report to be tabled in Parliament by the Minister. These requirements must be enshrined in the legislation, with the Productivity Commission conducting this independent economic review, with an analysis based on the costs and benefits of the system.

These Bills continue the work done last year in reforming the wheat export arrangements in Australia. These Bills will also bring to wheat growers who export wheat a greater opportunity to get the best price for their wheat.

Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to this | Hansard source

First, I would like to thank all senators for their contribution to the debate. We on this side were pleased to see the level of support from earlier speakers, particularly the majority of opposition senators. I thank them for that support. A common theme that has arisen with most speakers is that the current arrangements need to change and that the industry needs to face realities and move forward. As Senator Minchin noted, problems were becoming evident under the single desk, and the government also recognises these inherent problems. They have provided growers with no real choices for their export wheat and have provided little incentive, as Senator O’Brien spoke about, for market innovation and market development. At the same time there has been no protection of growers’ interests, no contestability for service provision and no transparency, and the Export Wheat Commission has had limited powers to do anything about this. A range of these failures were highlighted over the years during a range of inquiries and reviews, including the Cole commission.

The bills before the chamber deliver on an election commitment to address these problems. I want to make the point that in developing the legislation the government undertook an extensive consultation process. People did have an opportunity to have their say in relation to this legislation. This process included the release of exposure drafts of the legislation for public comment, the Senate Standing Committee on Rural and Regional Affairs and Transport inquiry and report, and the Wheat Industry Expert Group’s consideration of the delivery of industry development function. Prior to the release of the exposure draft legislation the minister also had constructive discussions with all of the major state farming organisations and major bulk-handling and trading companies. This process has given all industry sectors and the wider community ample opportunity to comment on these arrangements.

The government has considered the views expressed and has accepted arguments that have been put forward on a range of issues. Some amendments have been made to the draft legislation to address these concerns. These include making cooperatives eligible for accreditation, adding an objects clause and moving from a criminal penalty regime to a civil penalty regime. There were some claims made in this chamber during this debate that there was limited transparency and that the legislation was not thought through. As the process I have just outlined demonstrates, this is not the case. The changes to the bill followed the consultation process, and this demonstrates the government’s commitment to listening to relevant members of the community and other stakeholders on this issue.

During the debate there were a number of common issues raised. I will not hold the Senate up by traversing them in detail. There was discussion about growers not being paid and Wheat Exports Australia not being able to do anything about it. As senators would be aware, the Wheat Export Accreditation Scheme is designed to provide growers with multiple choices while making sure they are dealing only with exporters with the financial capability and reputation to meet their commitments. The scheme will be administered by Wheat Exports Australia, which will have increased investigative powers, including the ability to require information from exporters as necessary. These powers and the severe penalties that can be imposed for breaching conditions of accreditation or providing false or misleading information will give it the ability to protect growers’ interests.

At the end of the day the government believes the new arrangements in the bill represent the best balance for the future. These arrangements will give growers more choice, minimise costs, boost supply chain efficiencies, maximise incentives and lead to the development of new export markets. I commend the bill to the chamber and seek leave to continue my remarks.

Leave granted; debate adjourned.