If only commentators, including Stephen Mayne, knew what they are talking about.
Price support? The Australian Wheat Board supported Australian consumers by selling wheat to the home market at less than the export price. This was regarded by growers as a fair tradeoff for the security that the system gave growers.
The government guaranteed collective financing which that system provided did not involve any subsidies except in 1987 when the final return failed to reach the guaranteed figure. It was this collective financing system which ignorant onlookers (and, believe it or not, some ignorant farmers too) mistook for subsidisation.
That financing system ensured that growers received cash in time to sow next year’s crop, thereby guaranteeing a competitive supply of wheat in the next season. The borrowings were repaid with interest as the wheat was marketed, with any surplus returned to growers when available. 1987 was the only year there was a shortfall.
The single desk marketing system which the wheat board operated made it possible for Australian farmers to operate with minimal government assistance in a world market where their competitors are heavily subsidised. It was well managed, it did not play producers off against one another, and it distributed to growers the profits which would in an open market be taken by traders.
The competition which is needed to make a market work properly was provided in the world marketplace, where the Wheat Board’s Australian monopoly gave it the capital mass necessary to operate successfully in that world market.
The stand being taken by your so-called gang of four is a last ditch protest against a fait accompli. The bookworms Anderson and his mates doomed the single desk when they abolished the Wheat Board. You are right if you say that the single desk cannot be operated by a private firm which does not hold a monopoly in the market. It is not proper for a private company to hold a monopoly in the market for a major commodity. Therefore the single desk can’t stay. But don’t blame the current government for this. The bookworms in the Nats did it when they were there.
Do not fail to understand that it was the AWB’s single desk monopoly which made it possible for Australia to have a wheat industry without subsidisation to match our competitors. It is a very, very sad day to see it go.
As for the Saddam Hussein garbage. Here again we see blind bookworms at work.
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The blood sucking media and the lawyers had a field day, but AWB didn’t really do much wrong at all. The $300 million did indeed go for trucking fees to transport the wheat from the sea ports to the inland cities, at a per tonne freight cost of half of what it costs us to cart wheat to our local silos. The problem was that this was found to be illegal under the “oil for food’ program.
How many of you commentators remember that the basis for the “oil for food program” was non existent weapons of mass destruction? The oil for food program was more corrupt than Dickens’s ass.
The drop in AWB’s share value is partly caused by the furore over the Iraqi problem, but much more due to the failure of crops during the drought.
Get off their backs. They are not nearly as bad as you paint them.
Is there a future without the single desk? There is a light on the horizon.
The US decision to subsidise ethanol production has caused the price of grain to rise to a level much nearer the real cost of production. This should enable the removal of the direct subsidies for grain production which have been crippling Australian agriculture.
If that eventuates Australian farmers should then have the “level playing field” that was promised to us but not delivered 25 years ago. Subsidisation should then be directed generally to supplying those with special needs instead of selectively to production.