Australia to keep single desk for exporting wheat

by Emily Wilson
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Australia's single desk arrangements for exporting wheat, managed by AWB Limited, will remain intact until 2004, according to Australia's Agriculture Minister Warren Truss. But improvements will be made to the consent system currently operated by the Wheat Export Authority, Truss added.

Truss said the decision represented the government's main response to the National Competition Policy review of the Wheat Marketing Act of 1989.

"The government has decided that it can make these improvements without amending the WMA," Truss said. "This should avoid any potential for adverse structural changes to impact on AWB Limited's proposed listing on the Australian Stock Exchange later this year."

Truss said the WMA review found that continuing with the single desk, with some modifications, would give the recently privatized AWB and the bulk handling companies "more time to provide evidence of the net benefits of the current arrangements."

Under the Wheat Marketing Act, the Wheat Export Authority has until the end of 2004 to assess the performance of AWB with regard to its use of the wheat export rights.

"I will be asking the WEA to develop rigorous and transparent performance indicators to ensure its review accurately measures the benefits to industry and the wider community," Truss said. "However, this review will not be an additional NCP review."

Truss noted that a "number of industry members" had expressed dissatisfaction with the wheat export consent system, including the uncertainty and timing of consent notices.

"The government has therefore agreed to improve the system based on the licensing arrangements proposed in the review," he said. "This will allow longer term consents to be provided for the export of wheat in containers and bags and provide greater certainty for exporters. I believe these changes will increase the opportunities for further developing niche markets."

Truss said the government had accepted the review recommendation that there was a need to better define the objectives of the WMA. He added that WEA's role was to complement the single-desk arrangements in maximizing net pool returns through AWB, while at the same time facilitating the development of niche and other markets to the benefit of both growers and the wider community.

While the review recommended a temporary deregulation of exports of durum wheat, Truss said the government had decided not to proceed with that proposal because it would have meant amending the WMA.

Truss said the government understood that the new wheat marketing arrangements had been in place for only a short period and that they should be given more time to prove their effectiveness.

Trevor Flugge, chairman of the AWB, said Truss's announcement was a good decision, "as it recognizes the importance of a single desk seller in a distorted international market. The single desk system achieves market access, market share and market clearing while maintaining premiums."