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WHEAT EXPORT MARKETING CONSULTATION COMMITTEE

PUBLIC MEETINGS

GERALDTON

20 FEBRUARY 2007


MR RALPH: Good morning ladies and gentleman. Good morning ladies and
gentlemen. Welcome to this meeting to discuss the wheat export marketing
arrangements. I'd like to introduce my colleagues: on my far left, Mike Carroll;
Roger Corbett; Peter Corish on my right; and Russell Phillips who is head of the
secretariat servicing the Committee; and my name's John Ralph.

You'd all be aware that the Government has announced that it is reviewing the
arrangements for the marketing of wheat to overseas markets, and they've set up
this committee to travel around to towns where wheat is grown to get the views
of the wheat growers as an input into their deliberations. The large
organisations, including representatives of growers and the traders and so on,
will obviously all be putting their points of view to government and they have
the chance to do that, and no doubt there will be considerable lobbying, but our
task is to go around and find out what the people who actually grow the wheat
think about the arrangements and what they would like to see.

I'd like to emphasise that the role of this Committee is not to make
recommendations. We will not be recommending what should happen in
relation to the marketing of wheat overseas; we will be reporting back what we
learn through two avenues. One is public meetings such as this, and we've been
to each of the other states where wheat is grown and we're now in Western



Geraldton (20 February 2007)          P-1
Australia for all of this week; the other is by way of written submissions, and I
would encourage as many of you as possible to send in a written submission.
There are only a few days left to do that but we're not looking for long diatribes,
a half page or a page, just setting out your views so that when we report to
government we are reporting from the maximum number of views that we can
receive via these meetings and via the written submissions.

The way in which we've been conducting these meetings, is to give everybody an
equal opportunity to speak. We asked as you came in, who would like to
register to speak, and we will listen to those in turn, and then at the end of that, I
will ask anybody else who wants to speak, so if you haven't entered your name to
speak but you would like to speak at the meeting, you are not precluded from
doing so because you didn't put your name down. We will allow five minutes
for each speaker, with a signal from Russell at the four minute mark. What
we've found at virtually every meeting is that people have been listened to and
had the chance to put their view and that's been a feature of the meetings even
when people haven't agreed. We had just one, a couple of seconds yesterday
when somebody expressed a point of view that, and there was a bit of noise from
all the members at the meeting and, of course, that made the national news last
night. So that was the first time that had happened in twenty odd meetings we've
held to date. So I'd ask that you'd let everybody make their points, you may not
agree with them, but we'll be listening to everybody who wants to speak.

The first then this morning is John Rowe.

A couple of points, when you come to the microphone, stay there at the end of
your talk because we might want to be able to ask questions and the second point
I'd make is we are seeking to have this process as transparent as possible,
therefore all these meetings are being recorded, and they'll be available on the
public record, as will the written submissions, and if we do receive a submission
where anonymity is requested, we'll examine whether we think there's a good
enough reason for that. If we don't think there is a good enough reason we'll
send it back to the person who submits and ask them if they wish to put it on the
public record. If we believe there is a reasonable reason for wanting to remain
anonymous then we will extract as much of the submission as we can for the
public record in such a way as not to disclose the author.

MR JOHN ROWE: Mr Chairman, I didn't realise with a name starting with R
that I would be the first on the chopping block, but here it is. Because of
overwhelming support change for the Doug Clarke model at two meetings in the
north here, where he presented his model, I would like to give a copy of this
model to the panel, and this model, with perhaps some minor changes, could
satisfy and perhaps suit many of the other people and groups making
submissions to you. Thank you.

MR RALPH: Can you tell us basically what is in the model?




Geraldton (20 February 2007)             P-2
MR JOHN ROWE: It's pretty well known by farmers around here. Sorry, I
forgot to put the mic up. It's pretty well known as a GLA type where the single
desk type of selling will be held by the Wheat Export Authority, and they will
designate licences for the ones that they think should be reliable payers, and all
the rest of it and it is - when you said half page, I'm afraid I've got Doug's model
here which I'll give to you - - -

MR RALPH: No it doesn't have to be half a page, all I was trying to indicate is
you don't have to sit down and write 10, 20 or 30 pages, just a view that can be
expressed in a page or half page, but we'll take them at any length.

MR JOHN ROWE: Thank you very much then.

MR RALPH: Thank you John. The next speaker then is Lindsay Olman

MR LINDSAY OLMAN: Does this work?

MR RALPH: Yes.

MR LINDSAY OLMAN: Mine might take more than a few minutes to say, but
my submission is there should be no single buyer or single seller of any grain,
there should be multiple buyers, multiple sellers of wheat. There should be no
national pool. The single desk should remain for a transition period of three to
five years. The single desk for that period should be governed by a reconstituted
Wheat Export Authority with extreme powers and totally separated from any
organisation providing commercial service to the single desk. The above would
be at no cost to grower or government as the licences would have a fee structure.
 The sooner the changes are made to the industry, or the sooner we put wheels
on whatever change is going to be made, the sooner provisions and risk
marketing decisions can be implemented by growers concerned. The current
system puts sanction on growers, penalties for dealing freely with their wheat for
export. This cannot be allowed to continue. No growers should be compelled
by law to sell any grain to any buyer, that is totally agrarian socialism.

There should be multiple buyers and sellers of export wheat. Buyers must
provide security of payments to growers. Since corporatisation Australia has
lost over 40 per cent of wheat producers from the rural areas taking with them
over 50 per cent of population. This is devastating to the rural communities and
small businesses; worse than the Great Depression. The remaining farmers are
struggling to replace seasonal loans because our profits are eroded away by the
vociferous appetite of the monopoly system.            We are now down to
approximately 22,000 growers of wheat Australia wide.

The majority of AWB shares are held outside the farming community, more than
20 per cent of AWB shares are held by institutional investors. The largest are
foreign owned. The AWB single desk monopoly system is not grower owned or
controlled.


Geraldton (20 February 2007)            P-3
In granting export licences for containers and bags the WEA seeks to protect
Australia's reputation in overseas markets by examining a company's standing,
including directors' and officers' history and international trade, and history as a
fair trader. The AWB fails miserably in that criteria, yet still retains the
monopoly over bulk exports at our detriment.

The only single desk now held for Barley and South Australia, this State has the
lowest prices by far. WA has achieved over $35 a tonne advantage over that
single desk resulting in the strong recommendation to regulate - deregulate the
Barley marketing in South Australia. Increased competition in the cash market
will force lift the performance of the pools. Competition will also increase
investment in grain growing areas from industry participants and will bring in
new entrants. This investment will flow through to infrastructure, logistics, and
new skills base of the industry. The above has disappeared at this point.

Competition will increase prices; will give better market signals; better risk
management opportunities; greater turn over; pricing of products will become
more diverse; and the Australia Stock Exchange futures' market will have
substantially greater turnover. Commodities that have moved away from
controlled marketing arrangements - barley marketing in Victoria for example,
have seen an increase in the number of options available to growers, the forward
selling cash markets pools and as complicated as they wish to make any contract.

Studies have shown that there is a great capacity to reduce costs and charges in
the wheat industry and God knows they need to be. Our international
competitors, both old and new, are reducing their costs at a much faster rate than
Australia. Much needed competition will address this problem and therefore will
help to maintain our international competitiveness which we are being eroded
away at the moment. The excessive costs associated with the monopoly system
of grain marketing has well been demonstrated. In particular in dry years from
$15 a tonne in '02, '03, '06, '07 could well be in excess of $24 a tonne.

The national pool from studies done in our noodle wheat (inaudible) since the
ACIL Tasman Report clearly showed that Western Australia is disadvantaged by
the national pool. ACIL Tasman report identifies $11.70 a tonne disadvantage to
WA growers. No growers should be subsidising other growers, this is again,
agrarian socialism. Growers with higher yields do not share the difference. A
Western Australian pool can be regionalised where the Port of Geraldton has a
freight advantage of approximately $20 a tonne over other WA Ports, with the
exception of Kwinana which makes up for steaming time and being the fastest
loading port in the world, taking hours not days (inaudible). Thank You.

MR PETER CORISH: Lindsay, if I could ask you a question? You mentioned
early in your presentation there, removal of the single desk, move towards
deregulation, but a transition time of three to five years. How do you see that
transition time working? You said certainly controlled by the Wheat Export


Geraldton (20 February 2007)            P-4
Authority, do you think that the transition time would reduce over that period the
amount of wheat that's part of the single desk? In other words, an increasing
move towards deregulation or would you say a cliff face at the end of three or
five years?

MR LINDSAY OLMAN: No, there would be a move towards total deregulation
over that transition period, that's why I mentioned the transition period, as in
transition.

MR CORISH: Okay, thank you.

LINDSAY OLMAN: Thank you very much Sir.

MR MIKE CARROLL: Lindsay can I just ask you another question?
Yesterday, and in a lot of the other meetings we've heard a lot of concerns about
two things: one Australian wheat competing with Australian wheat in a number
of our markets; and also a concern from a lot of growers about their ability to
market their own grain, and they really don't want to have anything to do with
that, they want someone else to look after all of that for them. What are your
views on those two concerns?

MR LINDSAY OLMAN: The last one first, nobody would need to market their
grain. The buyers would fall over themselves to get Australian wheat because it
is far better quality than any other wheat in the world. At the moment it is not
being marketed, it is actually being sold. The AWB, markets and sells a bit of
wheat, but it's actually a facilitator where our wheat has and is, is over 70 per
cent of our grain, is sold through traders to start with. So, the traders will be in
here one after the - they are already here, they are already doing that job. What
was the first question?

MR CARROLL: Just a very popular concern about Australian wheat competing
against Australian wheat in international markets.

MR LINDSAY OLMAN: I don't believe that would be the case. As the WEA
would issue licences to any particular buyer, the buyer would have to stipulate
the market that he would be putting it into. That can be controlled. It might be a
bit top heavy, but if it was going to compete with Australian wheat or Australian
wheat competing with Australian wheat, it would be on the upside rather than
the downside. Sorry, does that answer your question? Because competition will
always drive up prices, it will never bring them down.

MR ROGER CORBETT: Lindsay, thank you for a very well argued case. In
asking these questions, I'd like to make it very clear to everyone that there's no
preconceived ideas or views on this Committee. Simply we have chosen the
technique of asking people to make presentations and challenging questions
from the opposite point of view in order to elucidate further answers and I think
that's been a very helpful process.


Geraldton (20 February 2007)            P-5
The fact remains that across Australia, Lindsay, so far, and I doubt if it's likely to
change, the most significant group of people want to retain a single desk. And
it's clearly argued on the basis of a pool, underwriting their risk, and quite
frankly, I think, probably fear of what would happen in a deregulated market. So
your transition period of three to five years if your proposal was to be accepted
by Government, would be immensely important to most wheat farmers across
Australia to gain confidence in any deregulated market, so what features would
you see that exist in that transition period to give the vast majority of wheat
farmers in Australia the confidence they need to move to a deregulated market?

MR LINDSAY OLMAN: That's a very good point, and the fear, and there is a
fear out there and there's a lot of misconceptions, a lot of myths, about the single
desk. The single desk has never saved anybody from going broke and the single
desk in the last five years has sent a lot of people to the wall, because of the
management of it. The single desk - the short history of the single desk for those
who don't know, it was a war time measure in 1942 put in by the Labor
Government to know where our products of Australia were going, because of the
Pig Iron Bob issue before, and it was lapsed after World War II, in 1946, and
reconstituted again in 1948, alongside of the AWB, which was the formation of
the AWB, and the Wheat Industry Stabilisation Fund. And since then, we have
all been sort of mollycoddled, while the Government had that SMA as it's called,
Statutory Marketing Authority, it was like a co-operative and handed everything
back. Today that doesn't happen, and the transition period of three to five years
is a way of protecting them, because as you can't have a cliff face of anything
happening, because you'll lose total support, the Government will lose support,
people won't know what to do.

In the interim period of that transition then there will be a lot of marketing
information out there, there already is today, the NACMA is coming around
shortly to give advice to people and what to do. We've a meeting with the
National Bank on Friday, which is one of the leading things up to risk
management. A lot of people out there are already doing risk management, and
they've done that since, what, the last five years, or before, with contracts, or
whatever. In those three to five years, everybody should take in what is
happening and make them more aware of what they're doing, take them closer to
the markets, and a better market understanding, and a better understanding of the
wheat industry that they are actually in. Does that answer the question?

MR CORBETT: It does, thank you very much.

MR RALPH: Thank you very much Lindsay. The next speaker is Mick
Desmond.

MR MICK DESMOND: I'll be pretty brief and straight to the point, because
probably being a younger grower in the audience, I probably feel a bit nervous.
As far as I can see we need choice, we should be entitled to choice, and at the


Geraldton (20 February 2007)             P-6
moment we have no choice. And that's about all I've got to say.

MR RALPH: Okay. Thank you very much.

MR CORISH: Mick, I understand exactly where you are coming from, we need
choice, but do you see that change, that choice coming from total deregulation
and moving towards it as quickly as possible, or do you accept the point that was
made earlier that a lot of growers are, to be frank, scared of a deregulated
market, and have said so repeatedly to us over all the meetings that we've been
attending. Would you agree that there needs to be a transition time and perhaps
a move towards deregulation rather than a cliff face?

MR MICK DESMOND: Probably be, you know, from a farmer's point of view,
most of the time we're busy doing our farming thing more than the - and a lot of
the people you hear from, as far as I can see, is the people that are probably the
cleverer side of farming, I suppose, that have an organised body and maybe you
do not hear from, you know, the people like myself too often that, you know,
like too scared to get up and say anything. So to answer that question I'm happy
to go deregulated tomorrow. And other than that, if people need time, take time.
We're a lot smarter than what we give ourselves credit for.

MR CORISH: Thank you.

MR RALPH: Thank you Mick. There's a vehicle outside WUM 242, and the
headlights are on. Thank you. The next speaker is Peter Bligh.

MR PETER BLIGH: Thank you, Chairman. Chairman, the way I see it, and I
stress this is my own personal views, I see a body corporate or otherwise would
hold a single desk, that'll be owned and controlled by growers. I'd like to stress
single desk, single seller where possible in the long term.

One possibility I've fleshed out here, and again I'm speaking for myself here, you
either de-merge AWB International Limited to run the national wheat pools or
you could use an existing body such as the Wheat Export Authority, WEA, or
set up a token new body which could be called Australian Wheat, Aussie Wheat
or any other suitable name.

Preferably I would like to keep the AWB name for this body, as it is a brand and
trade mark that is well recognised nationally and internationally. I know that the
name has been soiled with what's come out through the Cole Commission, but
especially internationally it's well known and if it does, as I hope, eventually set
up it's own trading division, somehow or other, I know raising finance is going
to be a problem there, but it could trade on that name.

AWB Limited as it is at the moment could use a name of their own choosing for
example Landmark Limited. This new AWB could allocate export licences to
bodies such as Wheat Australia, CBH Group, Graincorp Proprietary Limited,


Geraldton (20 February 2007)            P-7
Graincorp, ABB Limited et cetera in the short to medium term. They could also
use any of the other Australian and International grain traders, such as Carghills,
Louis Dreyfuss, if they are deemed suitable. I would hope that bags and
containers trade could be deregulated.

I would like to see the new AWB able to raise funds very long term either from
growers by such as means as tolls, as was the case by CBH Limited WA in
previous years, or by using commercial lenders. These tolls could be used to set
up AWB's own marketing division very long term, so that all profits from
marketing Australian wheat is returned to the pools. If this was successful AWB
could also look at sourcing cheap streams of finance for growers, hopefully
cheaper than current market rates. The profits from this could also be distributed
back to the pool. AWB could also look at setting up its own ship or freight
charting division so that any other profits derived from CIF rather than FOB
could also be added back to the pool.

Personally I do not like a model such as the Doug Clarke model. I've had a close
look at it. I feel it's too airy fairy and places too much emphasis on people
hopefully doing the right thing. To make that model work, there'd have to be a
lot of legislation that would have to come into force and that legislation would
mean too much government interference. That's as far as I've got in fleshing out
what I was going to say today Chairman, thank you.

MR RALPH: Thank you Peter. Peter, just getting to the principles of your
submission, a) you'd like the continuation of the single desk, but you would want
it under the control of growers?

MR PETER BLIGH: Yes, some sort of elected board.

MR RALPH: Yes, and deregulation of containers and bags?

MR PETER BLIGH: That's correct.

MR RALPH: Now, the issues you raised in terms of taking the name et cetera of
course, you have a publicly listed company and those shareholders, the A and B
class shareholders, have the rights and whether they are prepared to give up that
name would be under their control.

We had a submission from the Victorian Farmers' Federation that had a lot of
support in Victoria, which adopted your principals and they had the alternative
of a separate body elected by growers taking on the management of the pool and
the veto et cetera, or AWBI if that was possible, because what they are
recognising is it may not be possible to get the kind of clean de-merger, in other
words, so that model would fit your requirements also, I presume.

MR PETER BLIGH: Pretty well, Chairman. I've seen the VFF model, and I
have used elements from it, as well as elements from WA Farmers own model.


Geraldton (20 February 2007)           P-8
MR RALPH: Yes. Good. Thank you.

MR CARROLL: Peter, just clarify for me, what are the core functions you'd see
this new entity performing? I mean, is running a national pool important, is
active currency and price risk management of that pool important?

MR PETER BLIGH: In the long term, yes, I'd like to see the pool run that but in
the short term because the new body would have nearly no funds, it would have
to outsource all those - the trading; well, the finance is already fairly well
outsourced anyway because you can go to your bank and just take the quarterly
pool payments or whatever; the chartering would probably have to be done by
those companies or by the buyers if they're selling FOB, the buyer would then
look after the freight. If it's done CIF probably the trader would pick up that
profit, so I'd like to see that profit in the long run go back to the pool.

MR CORBETT: Peter, at the present time, the shareholders of AWB will, of
course, have a view of their ownership. It used to be owned by wheat farmers
which, of course, a lot of them sold, so it's no longer owned by wheat farmers
and those shareholders as the Chairman has pointed out have got rights.

The government have asked us to come and listen to you, and in making your
submissions through us to government is really what you're doing, how will the
government deal with that issue, because there's going to be residual asset values
and ownership there? If you set up a new model as you suggest, as an immense
secretariat and expertise and so on that's knowledged, how is that going to be set
up, it just can't be set up by a type of act of government ad the type of overseas
marketing contacts and so on how would they be set up in your model?

MR PETER BLIGH: Well, there's three avenues there. You could source the
finance from that. Either if, for example, AWBI was de-merged, some capital
would have to come with it. If that's not possible, the government would apply
the capital, or else we have some sort of toll raised by the new marketing body. I
realise AWBL holds the right to the name, and they may wish to keep that name
which we've got no choice but to allow them to keep it. We would have to
choose another name.

MR CORBETT: Yes, but you've got to accept that the directors of AWB - we've
been reminded of director's responsibilities in the last few days, haven't we? The
Directors have got responsibilities to the shareholders. You just can't take a
portion of the assets and divest them to someone else - - -

MR PETER BLIGH: Yes.

MR CORBETT: - - - because the Government or someone else directs you to do
so. How would that be handled, I wonder?




Geraldton (20 February 2007)           P-9
MR PETER BLIGH: Well, in that case, if no assets can come with a de-merged
body, or to form a totally new body or use the WEA as an example, it would
either have to come from government or have to come from some sort of a levy
on growers to run the pool.

MR RALPH: Thank you. Thank you, Peter. The next speaker Murray Criddle.

MR MURRAY CRIDDLE MP: Thank you. Thanks very much. It's good to
see you in Geraldton, in the mid west. For those that don't know I'm a member
of Parliament and also a grain grower and I'm principal of the operation at home,
so I have a clear understanding of the farming operation, and obviously I've
attended a lot of meetings around Western Australia with regard to this issue,
and got the feedback that a lot of people still favour a single desk, very seriously,
but I want to talk from my point of view as a farmer.

You've talked about fear of the marketing systems that are around the world, in
my view, I want to talk about reality, and I've seen in other industries, and we
have a lobster industry here in Geraldton, where the fluctuation in prices has
gone from something like $35 down to $14. We have a dairy industry which has
suffered very recently with reduced prices, and you can go through the whole
range of things. We tried to sell sheep just recently through a contract and ran
into all sorts of problems, and I think if we go away from the single desk with a
veto, we will expose farmers in the wheat belt, and this industry underwrites the
wheat belt here in Western Australia, we will expose them to the open world and
they'll have to deal with that on an individual basis, and I think from my point of
view, we will see some real issues and some difficulties in the industry itself.

We see governments underwrite droughts and so forth and underwriting
droughts and putting money into the industry is going to be a loss if you haven't
got some sort of a marketing system that underwrites their wellbeing, so I really
do think there's some issues here. And what we expose is the fact that we could,
if we move away to a deregulated system, we could move away from the
standards, the classifications, and the incentives such as the Golden Rewards that
are there at the current time under the present marketing system and if you lose
the single desk the guaranteed payments and I've had people come into my office
with regard to guaranteeing payments and traders in coarse grains who haven't
received their payments immediately or who have difficulty with that.

So they're some of the issues that I would just like to put before you. I have put
in a submission and you have that, but they're some of the issues that I think that
some of the people in this area will face if we lose the system that we have and
you talked about AWB shareholders and who holds the shares in AWB and the
responsibilities that those Directors have, but that will be the case in any
marketing organisation. If you are talking about Carghills or Louis Dreyfuss or
Glencorp, any of those people will be responsible back to the shareholders of
that company. So I think that particular issue needs to be viewed in the fact that
right across the board, that will be an issue.


Geraldton (20 February 2007)           P-10
MR RALPH: Just to clarify, so you're in favour of the single desk with the
status quo with AWB Limited retaining its relationship to AWB International. Is
that your position?

MR MURRAY CRIDDLE MP: And the point that I make about that is that
transparency is absolutely paramount. So if you have that sort of a situation in
place, then you need to maintain a very transparent situation and whether it be
CBH or anybody else with their mills in Asia, the same sort of thing should be
the issue, but make sure that there is transparency so everybody knows how the
business is being conducted.

MR RALPH: In the meetings we've had to date, the majority of people who
wish to retain the single desk have also declared themselves in favour of a
separation and the reason for that is you say that all companies have profits
going to shareholders et cetera, but the difference is that in AWB at the moment,
you have two classes of shareholders and the conflicts that are then set up
between the interest of the A class shareholders and the growers and the interest
of the B class shareholders who want to see the share price rise, and one of the
conflicts - one evidence of conflicts for example is employees of AWB receiving
shares in AWB, so therefore they have an interest in seeing, you know, the value
in the other side of the AWB listed company because that's where their return
comes from. So it's that conflict that is the reason people have given us for
coming out on the side of separation but still retaining the single desk, but you
are on the other side of that equation, you would rather retain the combination of
the two companies, is that right?

MR MURRAY CRIDDLE: Well I guess what I'm saying is that you can put
rules and regulations in place to overcome those issues and you can overcome
those issues as AWB or you can separate the company and have the same sort of
operation on the separate organisation but I'm just saying, you don't have to
dismantle everything to get the result that we require.

MR CARROLL: Murray, you started off talking about volatility being a reality
and commodity prices and I've no doubt that that's true, but managing that
volatility is not necessarily part of the single desk, that relates to how the pool's
managed and managing the currency exposure and commodity price, over the
life of the pool and leading up to the opening of that pool. You don't think there
should be greater choice so that growers can pick whether they want an actively
managed pool or whether they want to actually sell into a pool that isn't managed
and take care of that risk management themselves?

So that's one question and another one I had was, you talked about the
importance of maintaining the quality and standards around how we grade and
segregate our wheat and we heard earlier that Western Australia or people that
deliver into the pool are paying the costs of that for the benefit of all growers,
including those in the eastern states selling into the domestic market, do you


Geraldton (20 February 2007)           P-11
think a levy on all wheat growers regardless of whether they sell domestically or
into the export markets is a fairer way to provide those industry good services?

MR MURRAY CRIDDLE: Well, I guess, in the first instance I think that
particular point depends upon whether they sell into the domestic market and
sell directly into the domestic market or they go through the current system. I
mean, there is a choice there anyway. I know it's not a great choice in Western
Australia.

MR CARROLL: Are you suggesting re-regulate the domestic market so that - -

MR MURRAY CRIDDLE: Well, no, you don't have to re-regulate the domestic
market to do that. People have got the choice on the domestic market. They can
actually go to anybody and sell their grain. They don't have to go through CBH
or anybody else.

MR CARROLL: Yes.

MR MURRAY CRIDDLE: So, I don't see that point.

MR CORBETT: The very point that you're putting about the need for
transparency is the very criticism we are hearing about the Australian Wheat
Board - the lack of transparency. If, in fact, you've got a deregulated market,
well, then people can make their choice. Transparency is not so important. But
if you, by law, as is the present situation, compel people to sell their wheat for
overseas only to one, then transparency is important and many argue that that's
just what's lacking.

For example, there is great concern about the escalation in cost. There's great
concern that AWB really decides what services AWB really decides what
services AWBI will use, so they decide the scope of services they'll need and
what the price is and many people are really concerned about that. Other people,
Murray, are really concerned that eastern board, I'm not trying to create a divide
here, by the way, between east and west, it seems to be there anyway, doesn't it,
with daylight saving, but the eastern seaboard people, of course, have a very
large domestic market.

MR MURRAY CRIDDLE: Yes.

MR CORBETT: And some people believe in the Wheat Board but don't sell any
wheat into the pool so they type of use the convenience of the price fixing
mechanism or stabilising mechanism but don't sell any wheat there but they don't
pay anything for the service and the people in the west who are, of course, the far
bigger exporters are really paying the lion's share of the cost of maintaining the
Australian Wheat Board. Is that fair? They're some of the issues that have been
raised about transparencies.




Geraldton (20 February 2007)          P-12
MR MURRAY CRIDDLE: Yes, well, I agree that they have been raised but I
don't think they have been dealt with and that's the issue. I mean, I think that
those issues can be dealt with if you tackle them.

MR CORBETT: Well, they would be those that argue that it can't be dealt with
in the present structure because of now the split responsibility of the directors.
Yet, I don't think the example between Carghill is right because we're not asking
Cargill to divest themselves of some of their assets. We are doing that with
AWB so most people have argued that the present structure of AWB, where
there's clearly a conflict of responsibility now to independent shareholders, many
of whom are not wheat farmers at all, they're investors and the directors have got
a responsibility to them. At the same time they've got a responsibility to the
wheat farmers to maximise the return. Now many feel that those two things are
irreconcilable so there's a lot of type of questions that the Australian Wheat
Board and I don't really hear from you, Murray, yet an argument why the
Australian Wheat Board should stay in its present form or be an actor in light of
that lack of transparency and the conflicts that exist.

MR MURRAY CRIDDLE MP: Well, I guess I'm having as much difficulty
understanding your point of view because I think if there was a transparency then
all of those things would come out. I understand the responsibility of the
directors or the board members in AWBI and also in AWB Limited and there is
some conflict there, but they're responsibility on AWBI is to the growers, to
maximise their returns. Perhaps that's the message that comes out of Iraq.

MR CORBETT: But AWBI is wholly owned by AWB. I just want to
understand, if I can, Murray, whether you are arguing for the AWB as it
currently constitutes or some form of change?

MR MURRAY CRIDDLE MP: Well, I think there will be some form of change
and I've said but I think that that can be dealt with but I understand what you're
saying, but I think that issue can be dealt with.

MR RALPH: Thank you very much, Murray. Next speaker is Debbie Collins.

MS DEBBIE COLLINS: Thank you and welcome to WA.

MR RALPH: Thank you.

MS DEBBIE COLLINS: I support a single desk wheat marketing system 100
per cent. My support is for AWBL and I to completely de-merge in a fair and
transparent manner and in no way detrimental to any Australian grain grower. B
class shareholders must be second on the rung in the short term I feel.

I feel growers have far too much to lose if we go with any other model in the
short term. Some reasons: money is already invested in R & D by growers
through AWB, shaping the future program, someone made the comment earlier


Geraldton (20 February 2007)          P-13
that we have the best quality wheat in the world, well, that gap is very, very - is
getting closer and closer because the US have very, very similar quality wheat as
we do now. The golden rewards are risk management, management of grower
logistics to market our crops through the national pool.

Wheat growers harvest, deliver the grain, AWB markets the grain, money in the
bank. It's pretty simple. Yes, with a cost but without that ease what will be the
real costs? Consultants are currently charging around $200 an hour or $1 a
tonne. Growers would be required to be in the office for more hours with little
expertise in that field for most. More pressures on families and small
communities and all the other reasons put to you for support for the single desk.

We still have the flexibility to do our own futures and currency if we so wish.
Surely we've had the best of both worlds. The Howard Government has not
been totally honest in the Oil for Food saga in my view. Many companies have
been named and some US companies have paid billions of dollars in cash for
bribes I've been led to believe.

I would like AWBI and L totally de-merged. I to retain the name and logo and L
to have a name change. International to be grower controlled and operate under
a cooperative system. Assess the outcome in two years with a national review.
This will give growers the time required to make judgmental decisions for the
future of our industry as we are the ones who know what is best for us. I know it
is our choice to be primary producers but it gets very hard at times and we are
the very first in the supply chain line and dictated to most of the time. And yes,
that's it. Thank you.

MR RALPH: Thank you very much, Debbie. Thank you for those comments.
Next is Dave Brindal.

MR DAVE BRINDAL: Mr Chairman I just want to introduce you to a limited
licensing concept. We have some handouts up there. Is it okay if somebody
runs around and gives those handouts because we just want people to be able to
take them away and consider some of the options we are going to present to you.
Is that okay?

MR RALPH: Okay. Would it be better to hand them out as people leave?

MR DAVE BRINDAL: Well, whatever. However you - - -

MR RALPH: I think so. I think it's going to be a bit awkward otherwise.

MR DAVE BRINDAL: Okay. Okay. Righto. Well, time's a real consideration
here - - -

MR RALPH: Yes.




Geraldton (20 February 2007)           P-14
MR DAVE BRINDAL: - - - I'll get on with it. Okay, basically this was
developed by a group of mid-west farmers simply in response to the fact that
there was really seemed to be very little option out there that was produced
independently.

So basically, as I say, it's a limited licensing concept and the concept can be
either reviewed as transitional towards further deregulation, revert to a single
licence, or stand alone. It's an orderly marketing concept and the objectives of
that would be to maximise grower returns, it's got strong grower representation,
it's backed by legislation, it maintains the good industry functions that we all
want; and there will be a powerful authority for export control. We've actually
renamed this thing as a Wheat Export Board. It's basically a change from the
Wheat Export Authority. It retains a lot of the functions of the Wheat Export
Authority but it will take on some other roles. It has no assets so consequently
there's no conflict of interest and basically the structure of this Wheat Export
Board is that it is a statutory authority. We would consider strong grower
representation on that board and obviously members with special qualifications.
Its role is to tender out licensing operations, providing annual reports to
government and growers, to disseminate market signals from the licensees, to
give back to researchers, growers, breeders and all the rest of it some of those
functions that are already there and we see as good industry functions. It sets
guidelines for quality control and would offer new licences 12 months in
advance so people have got time to get organised and it controls all bulk export
wheat.

There are two licensing portions of this whole system. One is a majority
licensee and that licensee would be a tender under tender for a permit for three to
five years and they would be required to run a national pool, obviously maximise
grower returns, they are a buyer of last resort and they have to demonstrate
financial capacity and report to the wheat export board.

The other side of it is what we would call a minority licensees and basically
that's more towards market access for those areas that's not available to the
majority licensee, also for new markets and some innovation which has been
distinctly lacking in the whole process. Mr Chairman, I think that the benefits of
this type of model is simply that you are not giving up any of the things that we
have become accustomed to.

There are a number of sacred cows wandering around the pasture out there,
including the national pool and buyer of last resort and we really have no way of
actually testing those things so we see it as being transitional in that respect but it
does have the capacity to stand alone and, as I said it does have the capacity to
revert to virtually a single desk type system. That's basically it.

MR RALPH: Dave, can I just understand, with the Wheat Export Board, is it a
statutory authority or is it a Board whose members are elected by members?




Geraldton (20 February 2007)            P-15
MR DAVE BRINDAL: No, it would be a statutory authority but I would
understand that you still can elect members to that board if it is a statutory
authority.

MR RALPH: Yes, would you like to see a majority of members elected by
growers or a minority of members elected by growers?

MR DAVE BRINDAL: I think that's a moot point Mr Chairman. I think that's
somewhere that needs to be negotiated. I mean, obviously, as a grower we'd far
rather control everything but that's probably not possible and not sensible. We
see a grower chair as probably being, you know, probably not a bad idea in some
respects but we wouldn't set too many parameters around these things. These are
all negotiable and so we think that this is an area that we can sort out.

MR CORISH: Dave, one of the concerns we've had raised in the meeting so far
is the issue that if we have a move towards multiple licensees or deregulation,
we have the potential for marketers of Australian wheat competing with each
other in the same markets and that certainly is of concern to a number of people.
 In your model that you've outlined I think very clearly there, do you see that as a
risk and commercially is it a risk anyway?

MR DAVE BRINDAL: No, in this model the major licensee would actually,
you know, have access to those main markets. Now any minority licensee and
those minority licensees are only for 12 months, so it's not dissimilar in some
respects to a GLA system so that they can't actually compete in those same
markets.

MR RALPH: Would you continue to regular or de-regulate the trade in
containers and bags?

MR DAVE BRINDAL: Yes, another sacred cow out there, Mr Chairman. Yes,
we would still think that with a Wheat Export Board or Wheat Export Authority
it should remain as it is so that it is still not regulated as much but you are still
required to seek permits for it. To total deregulate it seems to be - I'm not too
sure what that's actually achieving. To have somebody who has the authority to
know where the grain is going and what's actually happening I think is still
important for reporting mechanisms.

MR RALPH: Thank you very much for that Dave. The next speaker is Gary
Collins.

MR GARY COLLINS: Thanks, Mr Chairman. A lot of the things I was going
to say have been said but what I will say that the key in my mind is a single desk
and grower control. Now we've heard of an AWBI de-merger. Maybe that's end
up being a co-op, maybe that's something to consider or just a straight out new
co-op but in my mind they're the two key things: grower control and single desk
and it's all the sorts of other things that go with single desk, though all those


Geraldton (20 February 2007)           P-16
things have been mentioned so I won't go back over that.

MR RALPH: Thank you, Gary. I think we understand your view. Glenn
Thomas.

MR GLENN THOMAS: Mr Chairman, many of my issues have been covered
by some of the speakers but currently I think we don't have transparency and we
don't have the benchmarking. I'm really concerned how you can benchmark
against yourself and how can you have transparency of an organisation's costings
under a closed shop. The only real way to achieve this, I think, is via some form
of competition and it obviously involves more than one player. I mean similar
has happened in Harvest Finance and I'm sure similar could happen in the
costings of our marketing.

I believe an empowered Wheat Export Authority or board or similar to as Dave
and the mid-west growers are proposing where it would hold the export licence
and grant export licenses much the same way as the GLA works and accept that
the tonnes applied for must be taken and similar to having a majority and a
minority export licence holder and I think this would create a controlled and
transparent marketing option.

Those that don't perform would soon be weeded out and not used and it's not the
gross price obtained that's important but the eventual net return into your bank
account that's important and I think one of my main concerns is that whichever
way you have it, a monopoly, no matter who it is, allows for complacency and as
we all know power corrupts and absolute power corrupts absolutely and let's not
return to the old circumstances via a different name.

MR RALPH: Thank you, Glen.

MR CORBETT: Glen, a lot of people that believe in the single desk, and this
goes, I think, to Gary as well, a lot of people that believe in the single desk say
that the veto is absolutely vital. You don't have a single desk if you don't have a
veto and a lot of people feel that the single desk has got to be the licensee and
therefore the holder of the veto and, of course, the practice has been never to
operate the veto that allows anyone else to compete with you. So do you see that
structure as it's currently germane in the present set up, being demolished?

MR GLENN THOMAS: Well, I think we need some form of transition. You
can't have a cliff face but I can't see why the Wheat Export Authority Board,
whatever you like to call it as a statutory body, can't control that ability and then
be able to gain and grant licences on the applications that it sees fit.

MR CORBETT: I think we've heard a very strong point of view and we've
actually heard these words time and again, you can't be half pregnant. You've
either got a Wheat Board or an AWB or whatever it may be, a Wheat Authority
that has the single desk, the veto and all the power that goes with it, or you've got


Geraldton (20 February 2007)           P-17
a deregulated situation and a lot of people are mentally fearful the moment you
break those three things: veto, single desk, pool - you break the back of the
present system and it's just a slow downhill run from there is what their
argument would be.

MR GLENN THOMAS: Yes, well, I think that's the way we eventually have to
move. I just think you can't have a cliff face but you may need a three to five
year transitional phase where you have a majority licensee, you have a couple of
minority players, you'll see how that - and that can gradually change to open
market.

MR CORBETT: Thank you.

MR RALPH: Thank you very much, Glen. The next speaker is Andrew
Thomas.

MR ANDREW THOMAS: Mr Chairman, I'm a 39 year old grain grower from
Mullewa in the north eastern wheat belt. I've been farming for 21 years and
derive my income solely from grain growing, something I'd hope to be able to
continue in the future but my concern with the current wheat marketing
arrangement debate that's going on is if we have the status quo we will end up
with more of the same, with what we've witnessed over the last few months and
years so there needs to be some changes. Why? Because we can't afford the
current system we have.

We've seen our grain grower numbers fall from 11,500 in 1985 to just 5,500 in
2006 and at the same time our handling and especially marketing direct costs
have risen to just short of $40 a tonne. At this rate, with the marketing cost
structures we are locked into, in another 10 years there won't be any of us left.

Thinking back it was madness to have the marketer who we are selling our
wheat to also in control of the bulk export license instead of a totally
independent body. It was definitely a case of the fox in charge of the chook
house. All we ended up with is horrendous cost structures and with recent
information from the Cole Inquiry, we had fraud benchmarking as with the
wheat industry's benchmark hurdle rate, massive out performance fees,
incentives linked to AWBL share price rather than pool returns, cross
subsidisation between entities, the Iraq debt write off, previously unknown break
fees, fixed management fees and all for what: the benefit of $3 a tonne when the
just mentioned costs amount to over $13 a tonne, all paid for by us growers who
pooled our wheat.

Talking to my neighbours, the majority believe in orderly marketing and don't
want a free for all but believe there needs to be some flexibility in our marketing
system with some healthy competition for our grain, at the very least, as far as
the port. Look what healthy competition has done for financing of our grain in
our domestic market. I believe, like some past speakers, a grain marketing


Geraldton (20 February 2007)           P-18
system similar to the GLA we have here in WA can bring the flexibility and
healthy competition we are screaming for.

The marketing system I propose would operate so a maximum of 35 per cent of
the export wheat tonnage would be available for bulk export licence
applications. A totally independent body holds this bulk export authority which
is owned by growers and has the authority to issue the licence up to that
maximum 35 percent.

The marketing act can be drawn up so all bulk export applicants must show a
benefit to growers with their being no present established market and that's how
the current GLA in WA arrangement works. It must take all grades of wheat and
the tonnage on the application licence, they must commit to 70 per cent.
Currently that's not a criteria with the GLA in WA so buyers just nominate
tonnage and then walk away from it.

The financing arrangements would be as they are now, which would only have
the licence application applicant applying if they have sufficient capital to fund
the payments or as we use now, a grower would use a bank. There still would be
a national pool or maybe a WA pool operated by the successful tendered licence
holder of the single desk. It might be CBH, an AWB or Graincorp and this is for
the remainder of the 65 per cent of Australia's wheat export tonnage, with the
holder of a licence again taking all grades, offering scaled payments for protein
moisture and screenings and having finance arrangements. This alone would
create competition for the marketing services supplied by the single desk holder.

This marketing system will be the true benchmarking test where we can clearly
see how each successful bulk export applicant's pool is performing. All costs
would become transparent and traceable rather than our current bulk export
arrangements where the grain buyer sets their own benchmark and true costs are
almost impossible to find out. It would not take long for a grain buyer to set up a
true sales performance track record or even a bad reputation.

Mr Chairman, by nature change is difficult to accept, especially if you only have
five to 10 years left in the industry but this marketing system gives us a
compromise where the benefits from both sides of the debate are available and
has the people who seem to have been forgotten in this debate, especially by
senior agro-political representatives, and that's us, the grain growers. Thanks.

MR RALPH: Thank you, Andrew.

MR CARROLL: Andrew, can you just explain to me how deregulation from the
farm to the port would work and where the farmer then loses title to the grain,
because at the moment that's the silo, isn't it? The local silo?

MR ANDREW THOMAS: Yes, I suppose I'm looking not only from the
marketing side of it, but also possibly the handling side of it as well, so with our


Geraldton (20 February 2007)           P-19
current system, where we're locked into where we have to sell to a single deck's
licence older who is exporting the grains, while any of the successful tenders for
the licence application would be who we deliver to, so that's obviously where the
de-regulation to the port is.

MR CARROLL: Right.

MR ANDREW THOMAS: But that was at the very least.

MR CARROLL: Yes.

MR ANDREW THOMAS: You know.

MR CARROLL: Okay.

MR ANDREW THOMAS: And somewhere along the line we're going to have
to have some compromise, so - - -

MR CORISH: Andrew, that was a very clear presentation and you've obviously
done a lot of work in putting that together and a lot of thought has gone into it.
I'm just not clear and you may have said this in your presentation, but I'm just not
clear on, who you would envisage controlling the actual single desk for that 65
per cent. Who would issue that licence for the single desk portion of your
marketing system?

MR ANDREW THOMAS: Well, it would be like with the, say, use the present
body, the Wheat Export Authority, which would be grower owned.

MR CORISH: Yes.

MR ANDREW THOMAS: And, of course, then for the 65 per cent of the grain
any major grain trading company which it would only be the larger marketers
would tender for that so that could be AWB or CBH. It could be ABB,
Graincorp, so they would tender for the services to supply.

MR CORISH: So a strength in - - -

MR ANDREW THOMAS: - - - or manage that 65 per cent.

MR CORISH: A strengthened wheat export authority that's grower controlled?

MR ANDREW THOMAS: Yes.

MR CORISH: Yes.

MR RALPH: Thank you, Andrew. The next speaker is Ian Blayney.




Geraldton (20 February 2007)           P-20
MR IAN BLAYNEY: Hello. Thanks a lot for the opportunity to present this.
Like most of the people who have spoken, about 70 per cent of my income
comes from export wheat. My background is a little bit different in that I spent
eight years on the Farmers' Federation's Grains Council during which time this
current structure was put in place and I've just finished three and a half years on
the western panel of the Grains Research and Development Corporation.

I think the prime consideration in determining the preferred marketing
arrangements for the export wheat should be to try and see more clearly what the
industry will look like into the future, rather than what it's looked like in the past.
 Growers like current arrangements for the following reasons, among others:
security of payment; buyer of last resort; after sales service to buyers; and the
ability to price discriminate between buyers. Those opposed to the single desk
would list the following reasons, among others: a cost plus mentality leading to
higher costs; expensive and lack of choice.

The single desk arrangements I think suit best a system that is selling a basic
FAQ type product, however, in the last decade the wheats grown have tended to
be differentiated into more higher value market segments. Into the future I think
the FAQ wheats are more likely to come from the countries that export via the
Black Sea or Argentina.

For a number of reasons I don't think our future as grain growers in Australia lie
with bulk exports of FAQ type wheats. The main two reasons I would see for
this are our high cost structure and the impact of climate change. I'm inclined to
think that our future as wheat growers lies more in other areas. These would
include high value wheats that suit the requirements of our near Asian
neighbours and also those in north-east Asia; grains that are used as feed stock
for industrial processes, both in Australia and the regions above; production of
fuels for transport and grains with special nutritional properties. I think this type
of wheat industry would be better suited to a situation of a number of exporters
rather than a single one.

CBH probably deserves a special mention here. Most of us would probably
agree that it makes sense for them to invest in the value chain, especially in our
near Asian neighbours, however, having done so, I don't think it makes any
sense for them to be unable to develop and exploit these investments because
they are unable to buy the product off the farmer and take it themselves all the
way through the chain to the final user.

I would propose a system that has some kind of structure that licences a number
of exporters, perhaps initially six to eight, as we have the four pillars of banking
in Australia, perhaps we could say we would have the six or eight pillars of grain
marketing. In return for a licence to export, marketers would have to meet
certain standards to guarantee payment and maintain quality standards. Some
kind of authority would be required to oversee this.




Geraldton (20 February 2007)            P-21
As a grower with something like 20 to 30 years left in the industry, optimistic I
suppose, such a change would not cause me any concern. I think it could inject
some extra dynamism and growth into the industry. I am a lot more concerned,
for example, about climate change. Thanks.

MR RALPH: Ian, so you would also share the view of a strengthened WEA that
would control this process? Is that where the - or who would be controlling in
determining who gets the licences?

MR IAN BLAYNEY: I guess finally the decision probably lies with the federal
government and the situation that probably most parallels it, I think, is when
Keating allowed in foreign banks so that people who wanted a banking licence
applied and those applications were assessed and the government decided who
would get a licence.

MR RALPH: The government rather than a Wheat Export Authority?

MR IAN BLAYNEY: I guess the government could devolve that power to a
wheat export authority but it would be really the government's call.

MR RALPH: I mean, you need something in between because, you know,
although the government has got a policy in terms of the four pillars in banking,
you've got APRA that then supervises to make sure that depositors money is
safe.

MR IAN BLAYNEY: Yes.

MR RALPH: Or as safe as it can be, so somebody has got to accredit those
buyers otherwise it's essentially a free for all, isn't it?

MR IAN BLAYNEY: That's right. Yes, and so that, if you like, becomes the
new role, if you like, of the Wheat Export Authority.

MR CARROLL: And do you think eight pillars is going to provide enough
competition? One of the criticisms we've heard of limited licensing is that
because we've got, you know, major players like CBH and Graincorp being very
regional in their focus, Graincorp is not going to be providing competition here
or ABB.

MR IAN BLAYNEY: My understanding is that if you have two, you effectively
have a duopoly and they behave as a monopoly, with apologies to Mr Corbett, I
think we have in supermarkets in Australia.

MR CARROLL: I'm glad you said it.

MR IAN BLAYNEY: But my understanding is if you have three major players
in a market you don't have that and I mean we've seen it now in the aviation


Geraldton (20 February 2007)          P-22
industry where Qantas and Virgin have formed a cosy little club and, surprise,
surprise, their profits are going up. So, I think you would try and have a system
where there is at least three major players in each of the main markets, bearing in
mind, of course, that CBH's structure gives them a bit of a head start in the
Western Australian market.

MR CARROLL: Yes.

MR RALPH: Thank you, very much, Ian.

MR CORBETT: I wonder if I could ask Ian a question? I'll point out, Ian, that
the retailing is one of the most competitive industries here.

MR IAN BLAYNEY: When you're selling and advertising. I think when it
comes to buying - - -

MR CORBETT: Well, I won't try to defend that but - - -

MR IAN BLAYNEY: Go and talk to a dairy farmer.

MR CORBETT: An argument goes like this. We export about 15 per cent of
the world market. A lot of it is to big bulk desks. We don't want Australian
wheat to compete with Australian wheat, barking down the price. However, 85
per cent of the markets we type of exclude ourselves from because a lot of those
people have their own distribution and customers. They'd like to buy Australian
wheat to provide to their customers but if the can't, they don't buy it, so we
exclude ourselves from 85 - by the present structure, it's argued we exclude
ourselves from 85 per cent of the market and that would bring about real
competition for the superior type of Australian wheat. How do you react to that
argument?

MR IAN BLAYNEY: I don't really have a problem with that argument. I had a
relation - - -

MR RALPH: Microphone, thanks.

MR IAN BLAYNEY: Sorry. A relation who was working in the Ag
Department, they had an Indonesian buyer turn up one day wanting to buy
lupins and they basically did a bit of work and they said, "Oh, if you want to
buy lupins, the Indonesian agent for lupins is Mr Such and Such, go and see
him," and he said, "Well, I can't go and see him, he's my major competitor."
So, that potential buyer was unable to buy lupins. Whether that was a good
thing or a bad thing, I don't know but this system of single desk buyers and
single desk sellers is, you know, there's no doubt it's on the way out.

MR CORBETT:          So are you in a sense really arguing eventually for
deregulation?


Geraldton (20 February 2007)           P-23
MR IAN BLAYNEY: Yes.

MR CORBETT: By another process?

MR IAN BLAYNEY: Yes, I guess so. The critical thing is that guarantee of
payment and that sellers of our wheat maintain quality standards. That's what I
see as the major concern.

MR CORBETT: Thank you.

MR RALPH: Thank you, Ian. The next speaker is Digby Lee-Steere.

MR DIGBY LEE-STEERE: Hello, Chairman. Lindsay Olman stole most of my
thunder and a few of the other speakers out the back but adding to some of their
things I know the grain pool in Western Australian were kicking and screaming
and carrying on when the GLA was formed. Many letters in the press and many
things from their marketers saying it totally ruined our pool. Since then I've
spoken to a few in the cooperative and they've said by golly it certainly improved
our efficiency and cut our costs down so that's what competition can do.

Adding to that I think the commodity of wheat having to be sold to just one
person, I don't know of any other commodity in the world that everyone has got
to sell that commodity to one identity. To me that seems totally unfair and just
adding to Murray Criddle's about the fluctuations of prices, by golly, I don't
know, I've got $55 less for the wheat I put in the pool the year before last and we
got a carry over because I didn't put one grain of wheat in the pool this year.
Thank you.

MR RALPH: Thank you, Digby, so you're clearly for deregulation?

MR DIGBY LEE-STEERE: Definitely not the cliff type.

MR RALPH: No.

MR DIGBY LEE-STEERE: Definitely it's over a three to five year transition
period, but if AWB is as good as we all in the room think it is, it will be one of
our main purchasers and sellers anyway.

MR RALPH: Thank you, very much.

MR CARROLL: Digby, can I just ask you, on that issue that was raised around
grain price volatility and, you know, a lot of growers expressing to us a concern
about their own ability to manage that, what are your views on that? How do we
manage volatility for growers who are very nervous about doing it themselves?

MR DIGBY LEE-STEERE: Well, when I first started growing wheat it was in


Geraldton (20 February 2007)           P-24
bags and sold in bags. I'm that old. But also we were on a party line of
communication and that's all we had. I think the ones that are so scared about it
all, the communication gap between then and now is just enormous. It changes
every day with email and transition. We know exactly what's going on around
the world, we know what all prices are here and there. I think the fear campaign
is that communication is so different these days.

MR RALPH: Thank you, Digby. The next speaker is Piers Blake.

MR PIERS BLAKE: Thank you. This is a problem getting down the back of
the track is that you try and shorten your speech so you don't cover what
everyone else has covered.

I guess I’m coming in at the cost to the growers and obviously it's been a great
concern and still underlying concern that obviously the marking costs, the extra
marking consultants who go into picking your market and the actual costs of
hedging and the costs of washouts. We've had examples of washouts this year,
obviously with the season - reverse seasonals and this is where, you know,
everyone has loved the national pool in the past.

Growers, you know, as we know their time is getting shorter and shorter and
they're free time and time is money and when you're trying to do multiple jobs
and make the right decisions as you go along, it's pretty demanding. The other
concern we have is obviously in the grain transport and a lot of it is set up for the
rail and as more parcels of grain - should be go down the deregulation line too
far, then the small parcels of grain become smaller, not only quality wise but by
the marketers and this makes it very hard to compete or put it on rail so it's all
right if you live near a port but if you're further out then, you know, we'll
probably be pushed off the rail, as we know, up here we are at the present time
having trouble getting trains to cart rail because of they're taken by iron ore.

I had an example a couple of years ago and I'm sure everyone sees the trucks
going up and down the road, of freight and when the trains can't facilitate the
grain to port, it's even pushed onto road. I was in the position a couple of years
ago that I asked the contractor how much he was being paid and it was like $15
from Carnamah to Geraldton and the actual AWB at that time were taking only
$11 by the train movement. So one wonders, you know, perhaps competition
might bring it down and that but if we divide up all that grain and it's still got to
be (inaudible) and put quality not only into marketers are we going to make it
just too small to be economical. AWB we hope was the vertical integrated
marketer and the idea I saw most people we try to achieve even in the super
marts be integrated so you get profits from various levels where your margins
are increased and so you don't have your costs coming out and different handlers.

So the answer was that AWB was a corporate. It went that structure down in the
late 90s in the setting it up at the corporate structure. I believe there was a push
to go cooperative and someone made the decision, either political or whatever,


Geraldton (20 February 2007)           P-25
that it go corporate and so we ended up where we are now so what's gone wrong
other than the Food for Oil.

I guess it's the conflict between the share market with shareholders are profit
driven and growers looking for the least cost grain marketing. There's always
got to be a conflict and it's all right if you're a shareholder and willing to get your
dividends but if you sell your shares then obviously it becomes a negative.

The problem really goes back to relating to the power of veto. This is obviously
it is a corporate structure giving the power of veto away was giving profit away
and this is where I believe AWB was inflexible and inflexible has led to where
we are now. I reckon 80 to 70 per cent of the growers were fairly happy with the
system but because AWB and AWBI were too close together that we lost that
transparency.

Yes, we would like to see minor players marking our grain and to make a bit
more of a benchmark but we have to - we also want see that orderly marketing
that has come through. We obviously have had a lot of concerns and hopefully
with all the wisdom we come up with the right answer.

MR RALPH: It appears so in summing up you would like to see the
continuation of the single desk, but you are also arguing for the separation
between AWBL and AWBI, is that right?

MR PIERS BLAKE: Yes, I believe the model that the mid-west growers, West
Australian farmers - probably somewhere in between there, must I believe, sort
of would fit. As to what you call it and how you go is probably two different
things. You know, everyone's got a different name, but it's just a function of
how do you do licensing.

The only other suggestion I will throw in, it was made by a Federal MP 12
months ago, was like we have multiple buyers but that – Wheat Export
Authority, or whatever you'd like to call it then looks at those - the buyers have
the contracts and you look at the highest contract and perhaps that particular lot
of grain would then be sold. It's like tendering for the highest price and then just
that single seller.

MR CORBETT: Yes, thank you for your presentation. One of the things we've
heard is the importance of a guarantee. You know, people are very anxious not
to sell their wheat to someone who can't pay for it eventually, so one of the
things that happens with the current single desk is they actually don't pay for the
grain, they pay you a proportion then they sell it for what they can and you get an
eventual price. It may take a year or two to work its way through so they don't
take any risk, you take the risk.

So if you start to go to a licensing arrangement, then it's germane to that that the
company buys your grain from you and once that person has bought your grain


Geraldton (20 February 2007)            P-26
from you, that person, big or small company, takes a risk on your behalf - well,
not on your behalf it takes a risk on their behalf, correction. So you're free.
You've sold your wheat, there's no risk providing you're paid for it and then he
takes all the risk in the world market. He either makes a profit or he doesn't. If
he sells it well he makes a profit, if he doesn't, he doesn't. If the world market
turns against him, then he's carrying the risk. So that's, of course, the danger in
payment. It's very hard to have a situation where companies overall take the risk
and at the same time you've got a gilt edged payment arrangement. How do you
respond to that?

MR PIERS BLAKE: That's the trouble is that most companies that do that
obviously work in percentage of, let's say, insurance of the market going down
and it becomes a cost to the grower and this is where what we didn't want to
happen, this is why we wanted the idea of the pooling is the idea is that it only
costs you to market the grain so it didn't actually cost you a profit margin going
out. Anything you do to someone else he will take it on but he's going to take
insurance - he'll take a percentage profit to try and cover his backside and that's
like anyone doing a quote. They put their 20 per cent on top and that, and that's
going to be another cost against the growers and that's obviously why everyone
sort of likes the pool side. In principle it was only supposed to be the costs of
the marketing coming out.

MR RALPH: Thank you Pearce. The next speaker is Wilson Tuckey. Wilson,
before you came in I explained the rules are five minutes each and a bell at the
four minute mark.

MR WILSON TUCKEY MP: Thank you. Thank you, very much Mr Ralph and
thank you for the opportunity. I don't grow grain on this occasion. Can you hear
me.

MR RALPH: Use the microphone.

MR WILSON TUCKEY MP: I don't grow grain. I've had three very serious
attempts. The first was one where I cleared land around Korda back in 1956, my
second attempt was with a partner to buy land in this region, a new land block,
and the government of the day put quotas on us. We got 100 tonne, and then
more recently I had about eight or maybe 10 years growing quite a quantity of
wheat on a 5000 acre property in the Quairading shire.

The reason I don't grow it any more is I woke up to something. You could apply
all the efficiencies available on your farm but the minute it left the farm gate you
were in the hands of a monopoly that could charged what it liked, and it did. But
having said that I thought I might address just a few myths also. There's a
reference made here a couple of times to buyer and sometimes receiver of last
resort.

I have the wheat marketing act here and I can show you where it specifically


Geraldton (20 February 2007)           P-27
negates AWBI being a buyer or receiver of last resort. But as Mr Corbett, I
think, pointed out a minute ago, if growers turn up at your front door and give
you their wheat, with no recourse to recover it, and a few people discovered that
when they were looking for stock feed early in the drought, why would you
knock it back? I mean, it's a gift and some of my recollections as a farmer -
somebody talked about volatility - '02, '03 the EPR, the estimate pool return
dropped $40 a tonne between harvest and February. I think that's volatility. But
furthermore, I was growing in the year when the EPR was 90 bucks, so, I mean,
these are realities, but furthermore to that, guaranteed payments since we left the
old Australian Wheat Board of 50 years with Reserve Bank backing, there's no
guarantee and what's more, you can ensure your harvest payment at $1.60 a
tonne and I hope they didn't used to lay it off with HIH.

I mean, since we transgressed from the statutory authority to corporation, you are
dealing with a corporate entity and you have all the usual protection that people
like HIH and Ansett have provided in the past.

A reference was made to transparency. I suggest someone should read sections
5(c), (d) and (e) which were implemented in 2002 to give the Wheat Export
Authority some opportunity to inquire into AWBI's activities but clause (e) lays
out how the minister, the WEA or any of their employees go to jail for a year if
they tell anyone what they found out. Anybody wants to read it I've got it here.

Let me talk of pooling and the lack of transparency. In a typical 15 million tonne
pool, a $150 million mistake or corrupt act is $10 a tonne and you don't have to
write that off in one day, you do two here, five there, add a little bit back and do
a bit the other way and nobody would know. 150 million out of growers'
pockets.

I've already said there is no buyer of last resort other than the fact the operator
would be mad not to do so and someone has already said that in pooling the
grower takes all the risk. Guaranteed payments are covered there.

Golden rewards was implemented by the old Wheat Board. It just didn't have a
fancy name in those days, but gentlemen, it is a true fact that people are very
concerned based on this argument of multiple sellers bidding the price down.
They had the same fear with land marketing and when that was wiped out, the
price of land doubled to the grower, but nevertheless I think that's a fear and
people are entitled to have a response to that fear.

You don't have to have a total breakdown in marketing and let me talk
consequently about the de-merger proposal. One, if AWB agrees to it, why? Do
they propose, as they probably would, considering about 13 per cent of growers
actually participate in the election of directors of AWB, do they propose to stack
it with their own people, and make sure, you know, it's business as usual, and if
not, why would they do that? If the government chooses to legislate for a new
body, I think the just term is compensation conditions in the constitution might


Geraldton (20 February 2007)           P-28
arise.

But finally if it was transferred lock, stock and barrel with the veto and its
exemption from the Trade Practices Act and its exemption from licensing
application, which just means that nobody knows what prices are being
achieved, then, in fact, it did as has been proposed and it went to the market
place and it said, we want a bid to service the farm gate or to the proposal.

And let's say CBH won it. CBH would then have a veto over AWB and they
would be out of business and I think that's a silly idea. I think AWB is the 800
pound gorilla, should be there but should be subject to all the same conditions as
anyone else and consequently Judith Adams and I and others have sponsored a
bill and it's the only solid piece of effort that's ever been made, and that says we
change the Wheat Marketing Act and by taking away from AWBI these special
privileges, we automatically transfer them to the Wheat Export Authority.

The Wheat Export Authority then, as the authority, can licence all comers but
we've got a condition in there. It says the function of the Wheat Export
Authority will be to control the export of wheat from Australia so as to
maximise financial returns to growers. Now if they make a wrong decision,
whomsoever is their board members, that will be contestable in the judicial
system and the legislation says that should start with the Administrative Appeals
Tribunal because that's a low cost, very simple, no lawyer exercise. You can
actually give evidence on the phone.

Now it might be that they give out 20 licences and certain people say that's not
going to maximise grower returns and they could appeal it. They might also
knock someone back who is offering an extra 50 bucks a tonne and they could
appeal it but the process then is you have a board, we propose a Western
Australian or South Australian wheat grower and a wheat marketer as part of the
board but we see them more as being the expert advice to the board because the
board will be subject to the Act and the Act says they will not licence anyone -
this business of bidding the price down, you come in with a silly price, you won't
get a licence, and I'll tell you who will be the biggest operator - AWB. But
they'll have to pay farmers right.

They can't take 48 million revenues out of sea freight to direct to directors and,
by the way, go and have a look at the top 40 directors of AWB Limited, there's
no foreign ownership restrictions on AWB Limited. One of their biggest
shareholders is an American pension fund and another is a sheik from Yemen
and they've been doing really well and the only source of profit is you blokes.

So the realities are, thank you, that there is a piece of legislation. It retains the
regulatory regime if a WEA could prove that a single seller or a single seller to a
specific market maximised returns to growers and it could prove it, necessarily
in court, they could licence accordingly.




Geraldton (20 February 2007)           P-29
But this idea that it's all about growers, the only reason we're here is that there's
government legislation. We say it should be changed and it would achieve what
a lot of people want and it doesn't put AWB out of business. Now considering
CBH does everything but send the invoice in this state, it's going to knock spots
off AWB. It could be the service contractor to the new, you know, de-merged
entity and say, and AWB gets nothing. If they think that's a good idea, I don't.
Thank you.

MR RALPH: Thank you, Wilson. As I said at the beginning, some players,
including the large organisations and parliamentarians get their chance to make a
direct input. This meeting is to give the growers the opportunity also to have
their say. Thanks Wilson.

MR WILSON TUCKEY MP: Good. No questions?

MR RALPH: No, because - - -

MR WILSON TUCKEY: (inaudible).

MR RALPH: You'll be questioned elsewhere. The next speaker is Ian Grant.
The microphone is very directional, so you need to hold it sort of that angle
facing you.

MR IAN GRANT: Right, thank you. I'm not going to get too bogged down in
the nuts and bolts of how things are going to work because I think our job is to
give you a broad view of where we want to be and a lot of those things can be
worked out after with people a lot more intelligent than I am, but basically I want
freedom of choice. I don't want to be forced and I don't see why I should be
forced to sell my wheat to a single acquirer.

I want more competition from export acquirers as has been alluded here earlier
on. WA is in a unique situation where we have very little domestic market so
we have very little avenues to sell and especially this zone, to sell our wheat
other than to the export pool. At Geraldton, under a deregulated system, would
have huge - and WA also - would have huge freight advantages and these are
currently being swallowed up, you know, into the pool and we're subsidising
others.

We're struggling at the moment under high fees and no service from the AWB.
The single desk is actually costing us and it's not a premium as people think and
I think you only need to read one of those reports, being the Tasman Report, the
Assenture or Kronos reports to see, you know, there's a lot of wise heads have
actually disseminated that information.

My view is that we remove the single desk and we replace it with licences issued
through the WEA and I see AWB as being a strong competitor in that system
and the acquirers will need to be accredited through maybe an organisation such


Geraldton (20 February 2007)           P-30
as NACMA or somewhere, you know, as to their legitimacy and able to pay.

I don't know why everyone is so fearful of competition where we face it in every
walk of our life. There seems to be a misguided view as to the safety net of this
single desk which, as I've said before, I don't believe it is there at all. It's only
costing us.

Someone mentioned volatility earlier on, well, we all have the ability at the
moment to manage a lot of the volatility through our hedging tools that we
already have. I also see the pool - some people like pools. I don't see any reason
why any other trader or any other acquirer wouldn't offer pools because it would
be advantageous for them to do so. They are currently being operated in
independent crayfish industry now through separate organisations and as for the
guarantee of payment, I think Wilson is dead right. We have no guarantees at
the moment. We lose ownership of our grain and retain the risk the day we
deliver it. Thank you.

MR RALPH: Thank you, Ian. Thank you very much. Next is Paul Camerer.

MR PAUL CAMERER: Yes, mine is probably a little bit of a statement really.
Most growers and I'd say just about everyone here does the same thing. They'll
shop around to achieve the best price for their inputs into their produce or the
crop they are going to grow but why not should those same growers be allowed
to shop around to achieve what they believe is the best price for the sale of their
produce that they grow. I don't think so. That's all, thanks.

MR RALPH: So you're for deregulation?

MR PAUL CAMERER: I'm for deregulation, probably in a little bit regulated
way of deregulating, but deregulation in the final end. Well, a transition period
to the deregulation.

MR RALPH: Thank you. Thank you very much Paul. Sandy McTaggart?

MR SANDY MCTAGGART: Thanks. I'll keep it fairly short. I'm not a wheat
grower, I'm a simple shepherd from the desert but I get to sit in on wheat
meetings and I listed to hear opinion and sometimes I don't think you can see the
wood from the trees. And so the essence of it all is from where I come from and
where PGA comes from is that we don't really need government in our business
at all. We don't need regulation. The only possible use I can see for government
in this wheat marketing process is perhaps in the accreditation of the financial
operators in the market. It just seems to me that to do anything else is confusing
the issue.

We've been through a process now in Australia for the last, I don't know, 60 or
80 years of grower controlled or thought they controlled entities and none of
them has been a success. What we need is commercial people in charge of our


Geraldton (20 February 2007)           P-31
industry and that means deregulation. Get the government out of it. So politics
is the art of the possible, as Kim Beasley said to me about 12 months ago, but
commerce is about the art of the impossible and there's no doubt Mike Carroll
could tell you when he pulls the rug from under your feet, so I just think we
should think about the issue of deregulating the market completely. I understand
here there's a fair bit of sentiment for a gradual change but it will not benefit the
industry to do so and I recommend a total deregulation.

MR RALPH: Thank you very much, Sandy. I think we know where you're
coming from. Thank you. The next is Rob Gillam.

MR ROB GILLAM: Thank you, Mr Chairman. I come from a point of
deregulation. I certainly support deregulating the market. Every other
agricultural produce that I produce is deregulated apart from grain and I have a
very diverse operation and I would like to be able to have that freedom of choice
also in my wheat marketing as well.

Much of what is in support of deregulation has been spoken of today but I would
like to address two points which - and it is how you get to deregulated market
and I believe that a transitional zone is particularly important. I certainly don't
wish to see the AWB disappear from the market. As much as they have
transgressed in many ways, I believe in the period going through to deregulation,
and afterwards for that matter, they will be somebody for many people who are
very nervous about going through the deregulation process will have the comfort
of knowing that a company there that they have placed great faith in and many of
them have got great belief that that company will do the right thing by them.

 Now whether that's right or wrong, it doesn't really make any difference whether
their faith is properly placed or not. The important part is that that company will
be there. The fact of how much you believe in AWB is just how soundly you've
listened to their corporate affairs division for the last 50 years.

Now I think the AWB, if they went into a transitional zone, I think we need a
period of probably four or five years and I think it was Glen Thomas who talked
about maybe six or eight players in the market. I thought it may be five or six
players in the market at that transitional period. I believe that the AWB will go
into that with a mammoth kick start.

If they don't achieve 80 per cent of the market in the first instance, in the first
year, then there's an awful lot of people who haven't been truthful when they've
been putting their point of view because it's said that there are probably 70 or 80
percent at least people who support the AWB. Now the real test of that, of
course, will be when they have the opportunity to market their grain to them
when there is an alternative. And so I believe having the AWB as a player on an
equal footing with another four or five others who are licensed to buy and export
in that first period is particularly important, but certainly I see we need a
transitional period.


Geraldton (20 February 2007)           P-32
How we get over that cliff face period at the end of that even, because even then
you face another cliff face, I'm not 100 per cent sure, but I think probably then
you need to deregulate completely after you've had that period, so I'm only
talking of one step down before you go total deregulation. I think it would be
very difficult to phase in more players over a period of years after that because
what will happen is you'd be giving some exporters more of a leg up than others
because it took them longer to get into the game, so I see a transitional.

The other one is this Australian wheat versus Australian wheat. I just can't
believe that people believe and have so much empathy with that argument
because, quite frankly, we all compete against each other. Every other produce
that you have here you're against your neighbour, you’re against every other
grower and it's all about supply and demand. And if we have a big harvest in
Australia then you can just about guarantee the price is going to be subdued at
the very least, and if we have a very small harvest, just as we've just come out of
because of climatic conditions, then there is more opportunities to sell your
wheat and so I think that if people believe that not having two Australian
exporters overseas trying to sell wheat against each other is meaning that they
put more money in their pocket at the end of the game, I think they're sadly
misguided because there's not shadow of doubt that that competition will do far
more to return to the grower's pocket than having a single desk seller overseas.

Mr Chairman, the other one that's been raised here is payment and it was alluded
to recently by Wilson about the HIH scheme. Certainly we are in a situation
today, every one of us here that's paid an insurance bill this year on our farms,
we still have an HIH levy, it's going back but it's been put there. I'm not sure
how you guarantee payment.

I guess in any commerce there eventually comes a stage where somebody has got
to be the risk taker and I'm not too sure how you work that out. I would certainly
like to see something in place which goes a long way towards making sure that
we have got security of payment but I'm not too sure if you can put something in
place that is 100 per cent without introducing that very same thing that we have
with AWB with a mandatory levy over the market maybe it will be a situation
where it is self defeating for a sufficiency. Thank you.

MR RALPH: Thank you, Rob.

MR CORBETT: Rob, thank you for that very lucid type of explanation. In the
deregulated model or the transitional period that you are referring to, if the
Australian Wheat Board's arrangements continue and they are, they take your
wheat, they sell it for the best possible price and then give you what's left over,
in a sense - they've got no commitment to you until the grain is sold and they can
therefore afford to sell at that dollar under anyone else in the market place.
They've got no commitment. So you then give out a number of licences and I
presume those licences are to buy the wheat at your gate and then to sell it on the


Geraldton (20 February 2007)           P-33
world market.

How do those people compete against an Australian Wheat Board that can
always, because they haven't got a commitment, they haven't bought - the guy
who's bought the wheat, he's going to sell to the best possible price to make a
profit. The fellow who hasn't bought the wheat until he's sold it can always sell
if for a dollar under you.

MR ROB GILLAM: Sorry, you've - - -

MR CORBETT: How does that work?

MR ROB GILLAM: You've misunderstood me. I see the AWB as a fully
private company operating against other buyers in the market. I don't see them
having the right to acquire the grain. I would like to see, as I said, five or six
people licensed to be grain traders and exporters.

MR CORBETT: So the Australian Wheat Board would have to buy the wheat at
the same price?

MR ROB GILLAM: Absolutely. They would have no - they would be
operating under exactly the same terms. The only great advantage I say they
have is because they've already got this great following in the farming
community already and even here today, there's a very firm affirmation that
there's some people here who have great faith in the AWB.

My faith is not so strongly placed but I believe it's important that they, as a
private company, go out and compete with the other grain traders at that
particular time and if they have the ability, if they're good enough, they'll
survive. If they're not good enough they will diminish. I think over a period of
time their market share will diminish but at the same time, the one thing that will
happen with the AWB, as sure as I'm standing here today, is that when they go
fully privatised and have to compete against somebody else, they will lose more
staff than the fig tree loses leaves in autumn.

MR CARROLL: Rob, there's a National Competition Policy review scheduled
for 2010. You don't think that two years of a licensing program leading up to
that would be sufficient? Because one of the benefits I can see of licensing is it
allows a more objective assessment of how AWB is performing as well.

MR ROB GILLAM: I think we've had plenty of time to assess AWB. I know
I've had plenty of time to assess it and I believe that particularly the younger half
of the farming community and I'm not in that part, but in my business there's
probably many of those that are here today, the younger generation who is
starting to take over strongly, they are much more conversant with risk
management, hedging, all those type of things.




Geraldton (20 February 2007)           P-34
I don't have much to do with it myself in my own business. I'm lucky enough to
have a daughter who enjoys that and does it very well so I don't believe the
AWB would need any further time for coming in. I think we can go deregulated
with a limited number of players, as I said, five or six in the market at this stage.

MR RALPH: Thank you, Rob. Well, that is the list that we had so now we're at
the stage where anybody else who would like to speak, if you'd raise your hand
and the microphone will be bought to you and we'll operate it on to the same
rules. You have a limit of five minutes with a warning at the four minute mark.
Who would like to have the microphone next? Who's got the microphone?

MR RALPH: Just a moment till they bring you the microphone. He's just
putting some new batteries in to make sure it works. As I said, this meeting is
on the public record, so before you speak, if you'd give your name thanks.

MR BRUCE LEY: Yes, my name is Bruce Ley. I farm at Cabin Valley. I'm 40
years of age and there's just a couple of points I want to raise. One, if you split
this room into two age groups and, for argument's sake, 45 and under and 46 and
up, you'd get two different answers on what we should be doing with
deregulation, I feel.

A lot of people are saying they want a grower controlled body but the same
people, or not all the same, but a lot of people that won't control their own
growing marketing. They're quite happy just to dump it in a pool, but yet they
want a grower controlled body, so I sort of think if you're going to do that, you
want to take a bit of responsibility for your own growing at the same time and
maybe we should be focussing on our farm gate price, not on whether the Wheat
Board can get $250 and another company is going to get 245, they're going to
undercut the Wheat Board by 5 bucks. It's what you get in your hand at the end
of the day and if that company sells it for 245 but can give you 230 bucks and
the wheat board can only give you 220, well, you're $10 a tonne better off for
starters, so I think people want to just focus on the farm gate price, not so much
on what is going to happen overseas. And that's basically all I've got to say.

MR RALPH: Sorry, can I just clarify then, you're in favour of deregulation or
are you wanting more contestability between - do you want to continue with a
pool but with more contestability between the farm gate and the port?

MR BRUCE LEY: I'm in favour of deregulation.

MR RALPH: Good, thank you.           Who would like to be next. There's a lady
down here.

SENATOR JUDITH ADAMS: Thank you. Hopefully Chair, I am a member of
parliament - - -

MR RALPH: Yes.


Geraldton (20 February 2007)           P-35
SENATOR JUDITH ADAMS: - - - Senator Judith Adams, and as Wilson has
already alluded to we have put forward our possible way of - sorry - possible
way that we could move forward with this with our exposure draft of the bill and
really what it is in essence, it's the veto goes from AWB to the Wheat Export
Authority, the Wheat Export Authority has to report to parliament annually and
this is the key to the whole thing, that we cannot go back where we've been,
we've got to have transparency and some sort of regulation to show that we're
not going to end up as we have, so some very minor changes to the bill.

I have copies of it here which you'll be able to get from my staff member Joanne
who will be over at the entrance there when you go but really in essence it's
putting everyone on a level playing field. It's brining in the AWB, taking them
under the auspices of the ACCC, which at the moment they are exempt from and
under the legislation currently with the Minister, the way it's been changed AWB
do not have to go to the Wheat Export Authority to apply for a licence to export
wheat so it brings them back to the playing field and as Rob said, they compete
with everyone else under the same guidelines and criteria but the main thing is,
I'm a wheat grower from Kojonup my other role, is that we're maximising
returns to growers. I can't, you know, state that more clearly, but it's very
minimal changes to the Act and we believe we can do it and my adjournment
speech, which I did the week before last is on my website so you can do it.
Thank you very much for your indulgence.

MR RALPH: Thank you, Senator Adams. In the middle here?

MR VIV CARSON: Viv Carson from Bineel. I'm a retired farmer but I grew up
in a deregulated market and all the farmers were on their knees. We had a
wonderful Wheat Board for many years and then they corporatised the Wheat
Board and the transparency has never - everybody is complaining about they
don't know what's going on and I'm concerned for the younger people if they
deregulate the market because they'll have to sit in the house and check their
prices and trying to get a decent price, otherwise they'll get screwed to death. I
think that was all I was really worried about. Thanks.

MR RALPH: Sorry, so you would seek just the status quo being retained?

MR VIV CARSON: I do believe so.

MR RALPH: Thank you, very much.

MR VIV CARSON: Like Murray Criddle said, it wants a few modifications for
sure.

MR RALPH: Thank you.

MR PETER ALLEN: Yes, thanks for that. Peter Allen. I talk to a lot of young


Geraldton (20 February 2007)          P-36
farmers around here. I make an effort to do this. Probably 75, 80 per cent want
a statutory marketing system but on the same basis, they're the first ones on the
phones to the marketing authorities to try and work out the best price they can
get. So, from my observations, I think what a lot of the future farmers actually
want, they want a degree of regulation to feel comfortable that they get paid for
their grain. That's one of their prime concerns, also they get a good price as well
for it.

But I think, really, probably the majority of people want some type of
deregulated system. I know I find with my son the same way he drivers the
header, he's got a mobile phone and all the equipment in the header and he can
be on the phone all the time checking out prices, checking out details, so while I
understand where the - coming from, the old days back in the 1930s you
probably had to wait for the camel train to come out and bring the wheat buyer
out to find out what the price was. I think in these modern days of modern
communications, I think it's just so simple and so easy to find out what the prices
are.

I think the main thing people are concerned about is security of payment, but I
do think they want the opportunity to be able to search around to find the best
price. I know personally, myself, some years ago I had a particular product
which was of particular good quality. I knew of a buyer for this particular
product but I was unable to sell it, I had to put it all in the pool with everybody
else and I subsidised all the other players in that pool. I'd just like to make those
few comments, please.

MR RALPH: Am I right then, Peter, in saying that you would favour,
essentially a licensing system so that you had accredited buyers who would have
to establish their financial capability of performing to contracts and once they
were accredited then it would be under some system of licensing for them to be
ale to participate in the market. Is that where you're coming from?

MR PETER ALLEN:             Yes, it would be, yes.        They do have to have
accreditation.

MR RALPH: Yes.

MR PETER ALLEN: We do need to know the capabilities - that they can pay
the bills, they can market the wheat and they can uphold Australia's reputation.

MR RALPH: Yes.

MR PETER ALLEN: I also see another, maybe a problem, I don't know, who
sets the standards in a deregulated market? How does CBH divide the grains up
in their bin, but I'm sure that's an issue that can be overcome.

MR RALPH: Thank you. Thank you, Peter. Down here? The gentleman here


Geraldton (20 February 2007)           P-37
with his hand up.

MR GARTH KOWALD: Okay, right, I've got it. Garth Kowald. Like that? Oh
here, we are, yes, it's working good now, isn't it.

MR RALPH: Yes.

MR GARTH KOWALD: Us old fellas aren't technically - we're not capable of
all these things. Amway, yes, Garth Colwell from Canna in the Morawa Shire.
Actually we farm between the Morawa and Mullewa Shire. I farm with my son.
My families, my grandfathers back in South Australia grew wheat. We've been
wheat growers for years and years and years and years.

What I'd like to say is there's been no mention, only a little mention of estimated
pool return. Now my son has talked to all sorts of people - actually, he's gone
out shearing to earn money because we didn't deliver any wheat this year, and
he's had to do a budget and he put down his estimated pool return at $140 a
tonne. Then our neighbours put down $200 a tonne. Now what are the banks
going to do? Who will be able to give us an estimated pool return which is very
important to most farmers? So that's one thing.

Another thing is two years ago we had a almost bumper harvest - the second
biggest harvest we ever had and there's been a carry over. Now what buyer will
be able to manage a carry over? I know that this wheat - our bins have been
emptied now from wheat we delivered two years ago. So that's one of my
concerns.

Another one was, now, my son drives the header and I drive the truck and we're
on the two way and my son has half the farm and I've got half and he farms
independent of me but we work together, so when it comes to his grain, I get on
the two way, oh, what shall I put on the delivery form and he tells me and,
anyway, it come up during - when everybody was buying lupins because of the
drought. "Oh, dad, what did you do with my lupins?" "Oh, I don't know, I'll
have to have a look. I think I pulled it." "Oh, good, because we'll get extra
payment because of the price of lupins going up because of the drought."

So how is that going to be managed with wheat? The same thing. And then half
way through harvest he said, "Oh, dad, I've got a lot of wheat this year, how
about putting the rest of the crop in distribution or quarterly payment." It think
it's called distribution and we're benefiting by that now because we're still getting
payments. We're still getting money from the distribution and we're benefiting
from the higher price of wheat from two years ago, so with this deregulation and
all these private buyers, will they be able to give us the same sort of
options?That's very much a big concern to me.

There's another thing I wanted to mention. I didn't have a pad here to write it
down. I'll probably have to let it go, my time is up anyway, but - oh, yes, and


Geraldton (20 February 2007)           P-38
another thing I want to point out to you which I think is very important is will
you consult the buyers of our wheat overseas? Do they want a hotchpotch of
sellers from Australia? I think it's very important to ask the actual buyers - the
main buyers, you know, what they really want, because I believe that quite a few
countries would rather deal with one - one seller of our wheat like the AWB.
Thank you very much.

MR RALPH: Garth, I take it from those comments that you would be in favour
of maintaining the current structure of the two companies in the one group?

MR GARTH KOWALD: Yes, exactly, and I believe that - talking to Chris
Moffat, which my family know personally, that the actual AWB, is it I or
whatever it is that sell our wheat - - -

MR RALPH: Yes, right.

MR GARTH KOWALD: - - - they're going through a period now where they
are trying to amend all the things that's gone wrong in the past. Thank you.

Oh, another thing I'd like to say is that the growers mustn't forget that the AWB
have done a tremendous job at selling our wheat in a very competitive world, so
we must not lose sight of that.

MR RALPH: Good, thank you very much Garth.

MR JIM CHOW: Thank you, Mr Chairman. My name is Jim Chow and up
until two weeks ago I was a farmer at Dalwallinu, wheat farmer, and my family
had been farming there since 1908.

If I could make a comment on the meeting, Mr Chairman. I've attended five of
these meetings throughout the wheat belt on this issue over the last six months
and this is first meeting that I've attended where the single desk lobbyists on the
AWB supporters haven't overtaken the meeting, so I'd like to make your
Committee aware that today here, in my assessment, you are hearing very fair
comment across grassroots farmers and that's what your Committee is about and
I think you should take heed of the comments here today as being impartial.
Thank you.

MR RALPH: Thank you, Jim.

MR ROBERT WILLIAMSON: Yes, my name is Robert Williamson from
Yeano and as you can see I'm nearly past it. I heard some - - -

UNIDENTIFIED MALE SPEAKER: You said you nearly are.

MR ROBERT WILLIAMSON: Yes, well, we grew up with stories from our
father and his mates about what it was like before hand and it was terrible.


Geraldton (20 February 2007)           P-39
We've heard that from, you know, from Viv behind me.

In this new and wonderful world that's being proposed, it's wonderful when
you've got a shortage of grain in the world. What happens, and it will happen
again when there's good seasons around the world. When we've got 25 million
tonne of wheat to sell. I draw analogy from what the coal market used to be.

They'd all go over to Japan, the 17 companies in the door, all line up against a
panel like you, all the buyers, all organised. The last one in the door set the
price. What do you do when, you know, the weakest - people have got debts,
mortgages, commitments, what happens then? These wonderful people are
taking risk - they won't take a risk. They go to the market, get a price, take their
margin and come back and give us what's left. Have a XXXX good think about
it.

MR RALPH: So am I to take it from that that you're in favour of the status quo
or, let me break it down, you're in favour of the single desk, right?

MR ROBERT WILLIAMSON: Yes, well, there's got to be some control.

MR RALPH: Yes.

MR ROBERT WILLIAMSON: Whether we go on without changing, I mean
nothing goes on without changing.

MR RALPH: No.

MR ROBERT WILLIAMSON. I mean, Mr Blainey stopped and made me think
about his suggestions. In this wonderful world about the buyers are going to
come and bid the price up to buy it off me individually, come on. Father
Christmas - Yes, six or seven years old you might believe that.

MR RALPH: Just to keep pushing you on this, what we've found is that we've
got people in favour of continuation of single desk, but then they fall into two
different groups. One group want to retain the status quo, the way it is with the
listed company AWB Limited, a listed company with a subsidiary AWBI that
actually markets and manages the pool.

On the other side of that divide are people who want the single desk but they
want a separation between AWBI and AWBL so that I has only grower
shareholders and is only engaged in the selling wheat. Do you have a position
on which side of that divide you would lie?

MR ROBERT WILLIAMSON: Yes, well, some of the arguments I've - I'm in
the stage that I'm starting to modify my opinions and think about things.
Obviously we can't go on as we were so there has to be some control. We can't
have an open slather. We have to have some control if people are going to - the


Geraldton (20 February 2007)           P-40
reasonable institutions can pay for the - you know, meet their commitments.

I mean, it was the farmer's little Indian buyer that was getting around offering the
highest prices in Western Australia and he was in trouble in the courts and he
was still XXXX promoting himself but I mean that's the open market, but people
can get caught. Yes, the idea about having five or six licensed, yes, they all need
investigating but by crikey, you remember what happens when there's a bit of
grain around and what happens when the weakest seller will crack and then
you're gone.

MR RALPH: Good, thank you very much.

MS SUSAN VALENTINE: Thank you. Susan Valentine from Morawa. I am a
farmer. I farm with my husband, son and his partner. We must be reasonable
good farmers because we're still surviving after six of the past seven years being
in drought. My grower number is XXXXXXXX. At the moment it feels like a
combatant's number or maybe a prisoner of war number with all that is going on.

Unfortunately AWB is creating a problem during a time of seasonal changes
which has added difficult to farmers. A few people just recently have bought up
points that I wanted to bring up. One of them is the GLA and what has happened
with Australian foods. A lot of people lost money selling through this market
and I personally know of a grower in Victoria who lost $700,000 on a canola
sale. Will this happen with our wheat if we have a deregulated market and
would have to do the same thing?

We also have to set a budget every year which is acceptable to the bank. At the
moment I use AWB's forecast prices because grain is our biggest income and we
must have some idea of where we're going with our grain each year to set a
budget because we actually rely on bank finance to put a crop in each year.

I also wonder if we go for a deregulated market would the government then look
at what Europe and America has in giving subsidies to farmers to allow us to
operate. It's not an open playing field, a level playing field in the world because
we don't get subsidies to grow our grain.

We also - sorry I have to (inaudible) - we also have a problem is we go to this
and we're accepting cash prices. For those of us who are delivering to a harvest
pool, we would then have a double income in the one year. Will the government
give us tax relief, because we'll have a huge tax burden? Thank you.

MR RALPH: Susan are you advocating then, the status quo? Is that - - -

MS SUSAN VALENTINE: No, actually, I think I would have a few months
ago, now I prefer AWBI to be separated from Limited.

MR RALPH: Okay, thank you very much.


Geraldton (20 February 2007)           P-41
MS SUSAN VALENTINE: Thank you.

MR TREVOR DE LANDGRAFFT: Yes, thank you. Trevor De Landgrafft and
I am president of the WA Farmer's Federation. I wasn't going to get up today
because I thought the farmers in this district certainly could do well, but there's a
bit of time left and I see that a number of politicians and other organisations have
stood up, so perhaps to add to that balance it's appropriate.

Our organisation has looked at a couple of models and one that really did take us
to deregulation and one that gave us, I guess, a half way style of outcome. We
recognise that the government is severely embarrassed by the Cole Inquiry and
they do need a political outcome so we have to face that reality. But also the
Cole Inquiry has given us an insight into what happens when a corporate has a
dual responsibility. So I think we've got some good opportunities within this not
only to deliver an outcome for the government but also a better outcome for the
farmers.

We have proceeded down the line of recommending that the - to a degree what
AWB is already doing, looking at what they call a soft de-merger, although I
know they haven't brought it forward, but we believe that AWBI needs to return
back to the farmers and be totally de-merged from AWB. That would have to be
put into the hands of a cooperative, more like, I think, many people would have
liked to have seen - is that better - in the first place, instead of actually being a
corporate.

The other side of this is whilst, obviously, the government doesn't want AWB to
be too much in the fore here, we also need to look at in a sense of export
overseas how this sets us up on the world trade organisation and how any kind of
a seemingly market interference is viewed.

We believe that with a co-operative, you can quite easily have a single desk,
single seller system as a co-operative and be almost in line with what the US
does. In the US, obviously they are subsidised, however they do have a lot of
cooperatives over there and cooperatives and all companies over there are under
the anti-trust laws which stops them being monopolies.

However, what the Americans have done, as you might expect, they've covered
their bases here and under the Kapa Volstead Act which has been in place for
many, many years, the Kapa Volstead Act allows cooperatives to collude to form
a monopoly for export purposes. When you think about a cooperative in
Australian to replace AWBI to conduct all of the pooling and the export sales,
then we in fact do line up with much of their thinking.

The whole wheat industry has developed significantly over the last 70 years and
I think the kind of contestability we have at the moment is quite good and
probably could have gone unchallenged had it not been for the Cole Inquiry.


Geraldton (20 February 2007)           P-42
We've got contestable financing, so to a large degree any cooperative doesn't
have to have the money, the banks do it for you, and, of course, we've also got
many accumulators of grain operating within Australia who have managed to set
themselves up a business accumulating grain and then supplying at export.

So under the model that we're proposing, the operations of the cooperative
would be limited to off shore but they would run that national pool that gives the
security that farmers want. In many respects we actually have to build a system
for the big crop years, because as we know, the little crop years like we've just
had, the drover's dog could market the grain. We get good prices but, of course,
if we're going to deal with these carry overs, as was mentioned early before, they
have to be taken into store and we've got a great storage system that can do it,
and they need to be marketed over a number of months and, of course, obviously
some forward hedging involved as well so that that week can be disbursed in an
orderly fashion. So we think that the good parts o the current system need to be
retained. We can retain them at that level, yet we introduce and continue to
drive forward with the innovation that's happened in onshore contestability.
Thanks.

MR RALPH: Thank you very much, Trevor. Thank you.

MR RODNEY MESSINA: Mr Chairman, I'm a farmer from Mullewa, Rodney
Messina is my name. It worries me as a younger farmer that we would go back
to a cooperative. AWB had the power and that's when they formed AWBI and
AWBL. I don't necessarily agree with deregulation straight away because there
is such a big cliff face. Everyone has support for the single desk but not for the
power of veto.

Now we have seen in WA where the GLA marketing system for coarse grains
has actually worked. 90 per cent of course grains still goes through CBH. Now
you can't say that feed barley or even canola prices have dropped as a result of
that. So as a transition phase, I don't think there's any problem with that.

There has to be systems that allow every farmer, old and young, to get used to a
new system, whether it's deregulation or whether it's a multi-seller system that
allows farmers, and especially young farmers, to make a choice. If we go back
to a cooperative, how do we have a choice? All of a sudden we're still pooling.
I personally don't agree with a national pool. Absolutely a WA export pool, no
problem at all. But why are the guys on the east coast benefiting from our export
wheat? It's been said everyone has - we have the best wheat in the world and
talking to a marketer the last week who represents 543 million people. It's our
closest neighbour. That's our domestic market. Let's have a crack at it. Thank
you.

MR RALPH: Thank you, Rodney.

MR AIDEN OBST: Thanks, Mr Chairman, I consider myself a - - -


Geraldton (20 February 2007)          P-43
MR RALPH: Name?

MR AIDEN OBST: Aiden Obst from Mingenew, just down the flat. 75 per
cent of growers that are in the middle of the two extremities, I think I consider
myself one of them, a 38 year old grain grower.

Fundamentally the time for deregulation is not now. It may well be in the future
whether it be five, six, eight, 10, 12 years, whatever, we actually at the moment
have all the production risk so that must be taken into consideration. AWB must
be seen to be singing for its dinner.

I'm not sure about the structure but if it's so good as what it continues to be and
everyone - a lot of support here for it, it must be a part of the game, as far as I'm
concerned and also must not have a conflict of interest with its - working for it's
shareholders as well as trying to do the right thing by us.

If you want to know about deregulation, just ask a dairy farmer. The structure of
the GLA in WA works but you'd be fully well aware of that and I've got a bit of
a problem with politicians having an input into the structure of the WEA. That's
pretty much about the size of it.

My biggest problem is we all have the production risk and, you know, we're
getting very worried about the price of grain in the end but, you know, we've got
some pretty serious issues with the cost of production. Thanks very much.

MR RALPH: Aiden, you've said you want the AWB still involved but you also
said you had a problem with the conflict. You're having B class shareholders
who are concerned about dividends and share price and A class shareholders
who are concerned about pooling. I wasn't clear whether you wanted to stay
with the status quo or whether you wanted some way of trying to resolve that
conflict by separation. Where do you feel - - -

MR AIDEN OBST: Yes, separation I think is probably the way to go, simply
because of, you know, we're paying for dividends and their charter is to
shareholders as anyone who has done a directors' course will know.

MR RALPH: Good, thank you very much.

MR DARREN LEE: Darren Lee from Mingenew. I'd just like to say that I'm a
younger grower. I'm 40. I have two children, 6 and 5. I'm not from a farming
background. I was actually in the banking industry and have been farming for
the last 10.

It's interesting, today I think it's been a real balance of opinions for orderly
marketing, deregulation and single desk and I guess one of the best meetings I've
been to and everyone has maintained control and not got passionate about their


Geraldton (20 February 2007)           P-44
issues.

Even within our own family, I have a father-in-law that's 75, 76, who grew up
with the AWB and I'm sure he was for single desk and I think his opinion now
has changed. I've got a brother-in-law that's 50 and he's single desk, single
seller. I'm 40 and I've got my opinion and I'm on for an orderly marketing
system so within our own family we have different views.

I think at the end of the day farming is a great industry to get involved with and
it's very exciting and it's dynamic. The GLA I'll preface by saying I was
involved in the mid-west farmer's submission, what was put together with an
orderly licensing system and when the GLA came to Western Australia I was
vehemently opposed to it. I think, though, through the powers of competition,
the grain pool and the Agri Corp et cetera have lifted their game and I can
certainly live within that.

I think I'd like the best of both worlds. I'd like part of the single desk and I'd like
part of the option of giving my grain to whoever I choose to and I suppose the
point in that is if we have an orderly marketing system with a beefed up wheat
export authority with a majority licence holder and a minority licensee holders
we get the best of both worlds.

I think the forces of competition will make the majority licensee holder do the
best thing for the grower and if they can't do that, market forces will drive those
other ones to improve and possibly put their hand up and take on to that majority
licensee holder. I'd just thank you for the time. Thanks, Mr Chairman.

MR CORBETT: Darren, can I ask a question. You rightly said there's quite a
range of opinion here. This meeting is quite unique that we've had in terms of
the widths of the range that I've sat at. If that's the case, what about instead of
government controlled, free enterprise endeavours here, what about self
regulation? And so if people want to use AWB and a single desk they'll choose
to do so and they'll get the volume and the business. If other people want to sell
independently well then they've got the opportunity to do so. Why can't this
market and these growers find their own level and elect, as it were, with their
wheat where they want to go?

MR DARREN LEE: Certainly some of those points, Roger, I would agree with.
 I think the important part in our model that we've put together it gives a bit of
the, I don't like mean the old school, but that surety of a major licensee holder.
For the younger growers I'm sure they will put toes in both waters. I've lost my
train of thought. Come back to your question again, sorry, Roger?

MR CORBETT: Well, I was just talking, Darren, about self-regulation.

MR DARREN LEE: Yes, I remember now.




Geraldton (20 February 2007)            P-45
MR CORBETT: And if the majority - - -

MR DARREN LEE: Sorry, I was going to say, I don't think we should strive for
grower control. I think a beefed up Wheat Export Authority or Wheat Export
Board needs grower representation. If you have strong charter and strong
corporate governance, those decisions will be made by those guys on that board
in a black and white situation. As long as they follow a good strong charter,
they're not skewed either way as to what decision they make but it gives the
grower the surety of, you know, it's semi-regulated as such.

MR CORISH: Darren, one of the things we keep hearing is the issues around
the so called industry good work - industry benefit work - that AWB does and as
someone else pointed out earlier, people that don't contribute to the pool are
perhaps not contributing to that.

Under the system that you're putting forward, would the Wheat Export Authority
take control or take responsibility for that industry good, perhaps either doing it
themselves or tendering it out, allocating it out to other industry organisations
perhaps including the R & D corporation?

MR DARREN LEE: The Wheat Export Board as we propose it had a lot more
control and had responsibilities back to growers. It all comes back to the bells
and whistles. If you want all the gadgets to go with AWB, sure go with that, but
if you just want to go without all those and you do your own risk marketing,
your own pricing, your foreign exchange, all of those, you don't have to take that
and subsidise.

I say I think the eastern states, at the end of the day with due respect, look at the
AWB price as a base price and then they grow on top of that with all their
domestic stuff and in Western Australia, unfortunately, we don't get that option.
CBH 0.75 per cent, they were working on that margin back into Interflour and,
you now, I don't want to pay AWB $15, $20, $25 a tonne for all the bells and the
whistles. I think a national pool is a good point. I say within our model I think
we get the best of both worlds.

MR CORBETT: Thank you.

MR RALPH: Thank you, Darren.

MR JEROME DREW: Jerome Drew, farmer North Hampton region. One of
the things that keep coming out here today is deregulation and I can't see how
you can have transparency with deregulation.

We're in international market where the Americans and Europeans are
subsidising and we need to take advantage of any systems that we can develop,
whether it needs to be the current system improved or changes to the way the
international market runs but at the moment we need to look at keeping the


Geraldton (20 February 2007)           P-46
shareholders separate from our profits. A lot of people have said that but we
would like to still have a single desk system, I think. I think most of the majority
of people would like a controlling system that allows other players to have a say.
 Thank you.

MR RALPH: Thank you, very much, Jerome.

LINDSAY OLMAN: I just want to make a couple of statements here.

MR RALPH: Name again, because it's going on the public record, thanks.

LINDSAY OLMAN: Okay, it's Lindsay Olman. I'm 70 if it's of any interest to
anybody. I should have given the game away a long time ago, but I don't intend
to. I've grown 55 crops. I may not get to 60. My wife disagrees.

Now I had a lot to do with the noodle wheat industry, in fact, the Western
Noodle Wheat Growers Association started in my house in 1991 for the very
reason that we're standing here today, we were under funded and we saw quality
and we weren't getting paid for it, so I know a fair bit about what I'm talking
about.

When it comes to Australian Wheat, it is of a better quality than anywhere in the
world and if anybody wants to travel around the world please do so and go
through the flour mills and you'll see and I've done that. Our quality is, for a
start it's clean. It might have a bit of radish in it but it doesn't have any maggots
in it. It's white. Okay, so America is starting to grow white wheat. The one
thing they cannot compete with ours is dry.

Now the milling quality of our wheat is in excess of 68 per cent and I say in
excess of 68 per cent. Some of the later wheats are even higher than that and
there's no wheat in world that comes anywhere near that. So that means that we
will and can and always will and prior to the recent years, where the buyers have
fell over themselves to buy our wheat and they still want to do so today because
straight away there is your competitiveness and it's been traded away by the
AWB and I won't go down that path right now because I'll be here for an hour
and I won't be allowed to do that.

When it comes to subsidies, yes, the rest of the world is subsidised in different
ways but we are too. I think out subsidy and I think Trevor De Landgrafft might
back it up, other's can, is about 8 per cent and the one that starts straight away
you have a fuel subsidy and secondly you have your licence subsidies. That's
two that come straight to my head straight away. That's all I need to say. Thank
you very much.

MR RALPH: Thank you, Lindsay. Is there anybody else like to speak?

MR GARY SNOOK MP: Thanks, Mr Chairman. Noting your comments, Gary


Geraldton (20 February 2007)           P-47
Snook, member of parliament, so my comments won't be directed in line with all
the others but I just want to make a couple of observations.

This is probably the best meeting that I've attended out of all the wheat grower
meetings that have been on in the state. It's constructive and it's balanced but I
just want to make the observation, Mr Chairman, being a parochial West
Australian, if I may, and a former wheat grower, that probably in this room you
would have more export wheat grown from the grower's representative here than
the culmination or collective volume of growers in all the meetings that you've
attended in the eastern states. I just want to make that point. Thank you.

MR RALPH: Thank you, Gary.

MR GRANT WOODHAMS MP: Mr Chairman, thank you for the opportunity.
My name is Grant Woodhams and like, it would seem, almost a majority of
people in this room who have spoken, I'm also a politician, quite remarkable.

 Mr Chairman, I'd like to move that the Committee doesn't take any submission
from politicians. I'd spoken to quite a few growers before this meeting.

UNIDENTIFIED MALE SPEAKER: Go on.

MR GRANT WOODHAMS MP: You go on too. You go away. You've had
your say, you've had it plenty of times and you know it. Mr Chairman, I'd
spoken to many growers before this meeting and I was certainly under the
impression that all the growers I'd spoken to I said, I don't want to talk, it is your
meeting, it is your meeting, and I think, Mr Chairman, you've heard from the
floor some very reasoned and intelligent debate. And the people - there are a
whole range of issues, a whole range of different opinions right across the floor
and I would expect that, and I do appreciate the opportunity to hear things that
I'm hearing today I haven't had the opportunity in other meetings to hear before.

I don't like the idea of any of these meetings being either politically hijacked by a
certain political perspective or hijacked by various lobby groups. Quite simply,
Mr Chairman, I would say that the people in this room represent everything from
absolutely best practice in farming and most of the people in this room are best
practice farmers, otherwise they still wouldn't be here. But they are from a range
of geographic areas where many are advantaged by the seasons they've had in the
past and many, as you've heard today, extremely disadvantaged by four, five, six
years of very trying conditions.

Mr Chairman, I know that you're not going to make the decisions that have been
forced upon wheat growers of Australia in a sense by the incidents of the Cole
Inquiry and now the review, if you like, and so the single desk, but I would
suggest to you that you take from this meeting the great concern of all these
people is that they want to continue to be wheat growers.




Geraldton (20 February 2007)            P-48
There's been some evidence that I've heard today and I'm sure that you've heard
today that they've put a lot of thought into what they want as the most reasonable
way to approach exporting wheat. You've got total deregulation at one side.
You have absolute maintenance of the status quo at the other but I think you're
hearing from most of these growers that there has to be a change to something
that accommodates their requirements, accommodates their conditions and their
circumstances.

So in closing my remarks, Mr Chairman, I'd ask, and it is truly a genuine plea, I
didn't want to stand up here and say this today. I believe the only people who
should be speaking are growers. That should be the only people who have a
legitimate right to put information to you. I don't believe that any other group
should be here representing its interests unless it has bona fides in growing
wheat. Thank you, Mr Chairman.

MR RALPH: Grant, the reason I haven't asked any questions of any politicians
is because basically we are looking for the opinions of growers. Our terms of
reference do require us to consult with others in the industry but our principle
task, having done that, is to report back on the views we get from growers. Is
there anybody else like to speak?

MR RICHARD COBLEY: My name is Richard Cobley. I've been growing
wheat for 49 years. It's been a circumstance for me and I'd like to think it's going
to be a circumstance for my family for another 49 years and I'm not a politician.


MR RALPH: Yes. Yes, that's it.

MR RICHARD COBLEY: Okay, I'm sorry for that. I think this whole thing is a
bit narrow. We seem to be here bogged down into a debate as to whether or not
it's going to stay the same or whether or not we're going to go somewhere else. I
think the fact is that change is going to happen. It doesn't matter whether we like
it or not, it's going to happen and I think if we can we should try and drive it
rather than be driven.

There's a question that was touched on that I've had in my mind for a little while
and Mr Mossina touched on it a little while ago. Given that the - I might say that
I've been to a conference over in Canberra where there were 250 grain traders a
few years ago. It was run by NACMA and I can tell you that there were 250
grain traders there who did not want AWB to be a part of it and there's a fairly
obvious reason for that.

I've wondered for a little while now why it is that we in Western Australian want
our grain marketed in conjunction with grain that's produced on the eastern
seaboard. The two markets are completely different. There's no similarity at all.
 In a normal season over there they export almost nothing. When they have a
bumper season they want an export market. Over here we export the whole lot


Geraldton (20 February 2007)           P-49
pretty much.

Mr Messina touched on the fact that the GLA down here has issued licences to
various people and it appears to have worked very well. I don't see why we in
Western Australia wouldn't set up something or demand that the marketing of
wheat over here should be deregulated to the point where West Australian
harvest is marketed separate from the eastern states. We would then get the
price that is offered by export markets and is not bastardised by what happens
over in the eastern states, because I can tell you what happens over in the eastern
states, the AWB pool prices, what they bounce their price off, I did in fact speak
to a guy who had 15 different options to sell his whole harvest within 20
kilometres of his farm. What's he want AWB pool price for? Just as a base
price. So I just want to ask this meeting here today, why is it that we don't want
to market West Australian wheat harvest separate to the eastern states?

MR RALPH: Can I just clarify there, do you want a Western Australian pool,
because you also used the term deregulation? Are you suggesting a separate
Western Australian pool controlled by - it could be controlled by AWBI or it
could be controlled separately. Is that what you're suggesting?

MR RICHARD COBLEY: I think probably, I mean I haven't gone down this
track very far. Yes, no. No. But I think that probably the way to do it would be
for there to be some other licensees other than AWB.

MR RALPH: Okay.

MR RICHARD COBLEY: But I think one of the conditions that should be
applied to licensees is that they all offer a full service, that they all offer a pool. I
don't think you're going to have people trotting around trying to pick off APW or
something like that. They need to compete across the whole gamut.

MR RALPH: Yes.

MR RICHARD COBLEY: That's what I think.

MR RALPH: Good. Thank you, Richard.

MR TIM BROAD: Tim Broad, Morowa. I'd like to iterate my support for
single desk marketing and I would like to say that if something changes there
and deregulation becomes apparent, that I would like to see total deregulation,
not just a little bit here, a little bit there, a little bit of licensing, something,
something, something. Nothing at all. No controls over me exporting my wheat
to any buyer anywhere in the world that I chose.

I'd like to also say that supply and demand is what generates our pricing structure
and while there are export subsidies in the US and Europe that we are going to
be always competing against that and that that competition will drive our prices


Geraldton (20 February 2007)             P-50
down. Buyer competition will drive prices down in a buyer's market and it is not
a buyer's market here it is only a - not a seller's market. We haven't had a seller's
market since, say, the late 40s early 50s.

MR RALPH: Thank you, Ian. Anybody else? Well, if not, I'd like to say a
couple of things. The first is to thank you all very much for coming along today
to have such a good crowd. If we didn't have people attending these meeting
such as we have then, of course, our task would be futile.

As I said, our task is on one hand simple and the other hand complex. It's simple
in the sense that we just have to report what we learn from these meetings and
what we learn from the submissions; complex because as you've heard here
today and as somebody has already referred to, we had this spectrum, at one end
of which is no change, at the other end is full deregulation and the majority
somewhere along that path and there are various positions along that path and
we have to try and analyse that and report it in a way that's meaningful and
accurate. We're taking that task very seriously and it's one reason why we've
made the process transparent because we want you to have confidence in what
we're saying.

We have to report to the government by 30 March. We're looking for written
submissions by 23 February. I don't know whether the report will become
public. Our remit is we've got terms of reference to report to government and
then it's up to the government to decide whether or not they make the report
public. I hope they will but as I said we've got no guarantees on that and I just
don't know what the intention is.

The second thing that I'd like to comment upon and note, even though you'd
expect that people who come from the country areas, I grew up in the country,
the way in which you've behaved during the meeting to allow people to have
their say even though you don't agree - there are actually two people I'd like to
particularly note for their behaviour and I'm not referring to any of the politicians
but these two young boys down here sitting there for that period of time. I've got
grandchildren. I can't imagine them being as well behaved as those two and, you
know, it's a credit to somebody that they've got young boys who will sit there
and listen to all this talk and behave the way they've behaved. So thank you all
very much for coming along to this meeting and we'll do our best for you.
Thank you.

UNIDENTIFIED MALE SPEAKER:                 (Inaudible 168.04) (Speaker not near
microphone).

MR RALPH: No, well, that's why I'd like them to get their views in by sending
in a written submission.




Geraldton (20 February 2007)           P-51

								
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