Treasurer Peter Costello wants to undermine the single desk wheat export monopoly, endanger long-term AWB contracts and its forecast returns, according to AWB International chairman Ian Donges.
Well, Donges didn’t specifically say that’s Cossie’s plan, but he claimed that would be the effect of allowing an AWB competitor to export wheat to south-east Asia which is what the federal treasurer is supporting.
It is interesting that Costello has chosen to criticise the core remanent of the National Party’s agrarian socialist heritage. He hasn’t, for example, expressed any interest in encouraging free market forces in the granting of television licences, but AWB is now fair game for the Liberals.
“If you were a grower and somebody was offering you a higher price for your wheat than the law required you to sell it for, you’d probably be a bit upset by that,” Costello said.
“I think in those circumstances, and we’re talking about West Australian wheat growers, they should be given the opportunity to test the market.”
Of course the same sand groper wheat farmers wanting to desert AWB for the higher CBH price would no doubt be pledging allegiance to the single desk if international prices had gone the other way in the past month, making AWB’s hedging look good instead of expensive.
Self-interest rules as always – which must apply to Costello sticking his head in on the issue as well.
The CBH-AWB confrontation at least highlights the questionable nature of the wheat monopoly’s central and dubious claim that the single desk magically adds so much value to Australian wheat.
It’s just one more trading company that sometimes gets it wrong and sometimes gets it right, but with captive suppliers it never pays the natural price for losing business when it fails.