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Wheat Marketing - the way forward

Speeches in Parliament
Rachel Siewert 6 Dec 2006

I am aware that there is a long list of speakers here and that we probably need to be fairly quick and to the point so I will try to meet those goals. The Greens will be supporting this amendment.

We support the lifting of AWB's right of veto temporarily. We believe that it is important as a short-term measure to allow Australian wheat growers the chance to sell this year's crop without having to wear the risk of the fallout of the AWB fiasco. We believe that it is much better to proceed down this path of temporarily lifting the veto to enable a discussion about the longer-term future and not force a quick decision on the long-term future when, quite clearly, there are very serious issues that need to be discussed and reviewed before reaching a decision on the long-term future and the way we market wheat in Australia. This will give all stakeholders the time to give proper consideration to the best way to market Australian wheat into the 21st century so that we get the best deal and protect the interests of all wheat growers in Australia-not just the large wheat growers but also the small ones-and so that we have a system that is transparent and accountable, the good name of Australia in the wheat market is restored, the good reputation of our agriculture is protected and we never again see corrupt and shoddy deals being done and having been done in our name.

In October the four Australian Greens sent a letter to the Prime Minister requesting that he temporarily lift the right of veto from the AWB. We had recognised the looming crisis for the wheat growers of Australia, particularly the Western Australian wheat growers. It was quite obvious that the findings of the Cole inquiry were not going to be positive and that the AWB was exposed to risks that would therefore lead to our farmers being exposed to risks-particularly Western Australian farmers.

We are pleased that this amendment is putting in place a temporary veto and that essentially the government is assuming the responsibility for that decision making. We asked for a temporary lifting of the veto to allow the immediate concerns to be dealt with so that everybody could have time to review the Cole findings with a cool head and a view to the best outcome for all.

The long-term changes are quite clearly needed-absolutely. It was obvious that there would be massive fallout following the report of the Cole inquiry and that time is needed to review these findings with a cool head. Farmers in WA were, and remain, concerned. They look like the only mob likely to be exporting wheat during this season because of the impact of the drought and they largely do the bulk of the exports anyway.

Farmers are worried about the risks and liabilities of having to deal with the AWB during the current crisis and, as many people know, most of the wheat from Western Australia is in storage in bins, rather than being delivered to AWB.

The important thing here is the uncertainty for our farmers. Even those farmers who support the single desk are concerned. They have this massive inner conflict between wanting to support the single desk and being deeply concerned about the risks and uncertainties that they face should they deliver their wheat to AWB.

Most people are probably aware of some of the potential liabilities that AWB currently faces, such as the direct costs of the Cole inquiry, bills from the ATO, actions by shareholders, owing money to the Australian Securities and Investments Commission and actions from overseas. The list goes on and on, with AWB's liabilities potentially amounting to between $1 billion and $2 billion. I believe that farmers have a right to certainty-and, of course, they have cause for concern.

If and when these chickens do come home to roost, Australian growers who have handed over their wheat to AWB may find themselves at the bottom of a long list of creditors. They may only receive a percentage of the crop's value. I do not need to tell you what a cause for concern this would be for farmers in normal circumstances; but, with the current drought, their margins are even tighter and, quite frankly, they need every dollar they can get from their exports.

As I said, WA growers are particularly exposed to this risk, because at this stage they are likely to be the main people exporting their wheat and are therefore the farmers who are most likely to face the biggest fallout from the AWB fiasco, paying for its incompetence and fraud in the oil for food scandal.

Of course, lifting the right of veto only addresses part of the problem that we are facing. The government still needs to answer a number of very difficult questions. Firstly, who is going to step in to bail out AWB and make sure that the growers do not end up paying for this anyway in the long run; who is going to pick up that tab? Secondly, what kind of process of inquiry will the government put in place to make sure that ongoing decision making is open and transparent and that growers and the broader community have a chance to have their say, are heard and have input into the long-term decision making on the future of the way we export wheat from Australia?

We need to properly assess the findings of the Cole commission of inquiry. In particular, we need to look at what role ministerial responsibility, the failure to oversee the current system, played. The Cole findings clearly said there was a failure of culture, but culture does not occur in a vacuum. Signals from the government, from DFAT and from the Wheat Export Authority, which I will get to in a minute, were critical.

There seems to have been a series of very convenient instances of overlooking warning signals, as well as organisations-for example, AWB-not performing the functions that they are supposed to carry out.
When the Australian Wheat Board was privatised and became AWB, a system was supposedly put in place to oversee that privatisation.

The agency with that responsibility was the Wheat Export Authority, which clearly did not properly carry out its functions. It not only did not carry out its functions adequately; it also had a very narrow interpretation of its functions. This narrow interpretation of its functions resulted in its failure to pick up the failings of AWB. However, it does not stop there.

The WEA is supposed to report to the minister-so what did the minister and the departments do with the reports? Do they just file the WEA reports? Didn't they check that the WEA was carrying out its functions? If they did, they might have identified the improper way in which AWB was handling its business. Quite clearly, changes are needed for the long term.
We need to decide how to market Australian wheat on the world stage in the 21st century. We need to protect the interests of our growers, both big and small. We need to protect our international reputation-first, of course, we need to restore it and make sure that we do the right thing in responding to the Cole inquiry into the Wheatgate kickback scandal.

We need to have a debate in which all Australian wheat growers and the broader community have a chance to be involved and put forward their opinions on the future of the single desk and the best way to manage their interests. We need to make sure that the single desk process is open, transparent and working in the best interests of growers, not the stakeholders in a privatised monopoly. That was a built-in conflict of interest. We need to make sure that growers are involved in the decision making on how their wheat is marketed.

I am concerned that some people's single-minded belief in the single desk has resulted in their overlooking the shortcomings of the current approach to the single desk. We need breathing space and we need to carefully review what led to the malfunction and the breakdown of the current single desk process so that we have a system that does deliver in the interests of all growers, not responding to the interests of shareholders in private companies, and that is open and transparent. We need time to discuss this, which is why I am glad that the government has responded to calls from the community and from the Australian Greens to temporarily lift the veto power to enable a much more proper process to be put in place, rather than making a rushed decision which I think would inevitably have led to a poor outcome for the Australian wheat market.

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