AWB-backed study sees gradual end to wheat monopoly

Australian wheat exporter AWB Ltd released on Thursday a report it had commissioned that recommended a gradual dismantling of its wheat export monopoly even as its fights to keep the monopoly amid a scandal over sales to Iraq.
AWB's export monopoly, known as the "single desk", is at the centre of a political storm after allegations that the group abused its powers by providing $222 million worth of kickbacks to the Iraqi government of Saddam Hussein between 1999 and 2003. The report, commissioned and released by AWB, argues that deregulation of AWB's export monopoly will be brought about by new agreements in the World Trade Organisation which will restrict state-sanctioned enterprises like AWB.
"Further changes to the single desk arrangements for marketing Australian wheat overseas are warranted, but they should be gradual and linked to the global trade reform timetable and structural adjustment within the domestic grains industry," the report, by trade consultancy ITS Global, said.
AWB has fought hard to keep its controversial monopoly over years of stinging attacks, headed by the US wheat industry, global grains trading giants and its Australian rivals.
The report said the Doha round of World Trade Organisation talks would set 2013 as a deadline for new competition rules to restrict operations of state-sanctioned enterprises. AWB spokesman Peter McBride also said the report looked to counter-balance a report released by the Australian Grain Exporters Association on Wednesday.
This group, representing trading giants such as Cargill Inc, Louis Dreyfus, Noble Group, Bungle Ltd, Toepfer and Glendora, said net returns for wheat sales could be increased by at least A$10 a tonne by removing AWB's monopoly.
The group wants a self-regulated industry with no restrictions on competition among buyers and has called for a two-year transition with limited government involvement in the up of Australia's bulk wheat export trade.
The AWB-backed report by former trade diplomat Alan Oxeye calls for the single desk to handle Australian wheat exports until 2010, to give wheat growers time to adjust. "This would avoid undue financial uncertainty and stress during the current drought and maintain critical high value markets in Asia and the Middle East," it said.