OVERSEAS TRADE: by Patrick J. ByrneNews Weekly
Wheat-growers back single-desk selling
, April 28, 2007
A survey of wheat-growers has shown 82 per cent support an ongoing single selling-desk structure for the marketing of Australian bulk wheat exports.
Only 11 per cent supported multiple bulk sellers into overseas markets, and only 6 per cent wanted a totally deregulated system.
Tony Windsor, independent federal MP for New England, sponsored the poll, which was conducted by Rural Press Marketing Services. It generated 3,372 responses to an industry-wide survey of about 29,000 growers.
Until the Iraq wheat controversy, export wheat had been marketed through the single-desk marketing authority, AWB International, a wholly-owned subsidiary of AWB Ltd. Since the scandal, the Minister for Agriculture has held the right to veto, i.e., the right to issue export licences to a limited number of bulk traders.
The Coalition has been divided on the issue. The federal Nationals have stood firm in favour of the single desk, but the Liberals have been pushing for a multiple licensing system, with a revamped Wheat Export Authority holding the power of veto. The Liberals' proposal would effectively see multiple traders bidding down the price of wheat on the export market.
This contrasts with the large majority of wheat farmers who supported an ongoing single selling-desk export arrangement, 62 per cent want to separate AWB International from AWB Ltd with the objective of creating a grower-owned single-desk manager (AWB International) to market Australia's bulk export wheat internationally, leaving AWB Ltd a purely commercial agri-business company.
Over 68 per cent of those farmers producing over 5,000 tonnes also wanted to keep a single selling-desk arrangement. This has dispelled the view that only small grain-producers wanted the single desk.
When asked who should hold the veto power for bulk wheat exports, 43 per cent wanted AWB International to hold this power, while 29 per cent said they would prefer the Wheat Export Authority to become the single selling-desk.Canadian barley-growers “conned” in single-desk poll
The Canadian Government is planning to remove from the Canadian Wheat Board its single selling-desk arrangements for Canadian barley-growers.
Its move follows a ballot of 3,703 growers in which one of the questions was effectively a “con job” on farmers.
Farmers voted on three options:
1). 37.8 per cent voted to retain the single selling-desk arrangement for barley.
2). 48.4 per cent voted yes to the option, “I would like the option to market my barley to the Canadian Wheat Board or any other domestic or foreign buyer.”
3). 13.8 per cent wanted to abolish the single-desk arrangements and allow open trade in barley.
Option 2 undoubtedly sounded reasonable to farmers, giving the impression that the single desk arrangements would remain. In reality, the effectiveness of a single desk is negated if it becomes just one of a number of sellers.
The Conservative Canadian government of Prime Minister Stephen Harper has been pushing for the abolition of the Canadian Wheat Board. It has put its own spin on the results, saying that the combined result of options 2 and 3 means that 62.2 per cent of farmers want to abolish the single desk.
This interpretation of the result is strongly disputed by many farmers and farmer peak bodies.
A single desk gives farmers collective bargaining power when selling on world markets. This is important, as farmers are price-takers not price-makers. As individuals, they have no bargaining power when selling into the grains market.
But in a situation where a single desk is abolished and multiple traders are allowed into the market, the traders are able to bid down the price paid to farmers.
The Canadian Government move follows a strong push by the handful of private world grain-traders, the US and the EU to have the World Trade Organization (WTO) rules amended in order to eliminate single selling-desks around the world, euphemistically referred to as “state trading enterprises”.
This powerful group regards any single selling-desk operating under the auspices of an act of parliament, such as in Australia, as being a state trading enterprise.
Commenting on this move, one member of the Canadian Wheat Board said last year, if this group “get their way, new WTO rules will make it illegal for any group of farmers to organise and collectively bargain for export crops”.
“This becomes an issue of national sovereignty,” he said. “The principle under attack is the democratic right of citizens or an economic group to have legislation enacted that empowers them to organise effectively in the interests of the majority.
“To deny Canadian grain farmers this right is also to put at risk this right for farmers producing products under the supply management system.”- Patrick J. Byrne