Australian farmer organisations will decide within weeks whether to accept a proposal by scandal-hit exporter AWB Ltd for a new grower company to apply to operate the country's wheat export monopoly. The head of the newly formed Wheat Export Marketing Alliance, Graham Blight, told Reuters on Monday that AWB's latest proposal was a "good news" step forward.
But divisions still dog the farmer-backed Alliance and AWB. The farmers want a new export organisation to operate the full range of services to back wheat exports. AWB wants to limit the number of services operated by the new group so that it can bid for lucrative support contracts, and says it will not negotiate this away.
"This is what we're offering, do you want it, or not?" a spokesman for AWB Ltd said. "If they (the farmer organisations) don't want it, well, it's not going to go anywhere," he said.
AWB was stripped of its role as monopoly exporter by the government last year after an inquiry found it had paid kickbacks to the former Iraqi government of Saddam Hussein to secure sales.
The government in May decided to maintain the national monopoly export system, but to move it to a new independent grower-owned group next year. The government will take applications for the monopoly operator. AWB last week abandoned a plan to hive-off subsidiary AWB International to apply for operating the monopoly because of costs and complexity.
A new AWB subsidiary would be in a simpler position because it did not have existing business operations nor have a legal involvement with AWB's past dealings, the spokesman said.
AWB wants the new subsidiary to be based on an "essential services model", under which AWB would be free to bid for outsource contracts covering wheat export marketing, grain acquisition, trade finance, business processing, ship chartering and supply chain operations. Blight, a former president of the National Farmers Federation, said the state-based farmer bodies had not yet discussed options. But farmers always wanted to operate the full range of services. There was always room to negotiate, he said.
Most important was that the Australian wheat industry retained its export monopoly, he said. The alliance would have to decide whether to accept AWB's offer within weeks if it is to meet a government deadline of March 1, 2008, for the development of a new entity to manage the "single desk" export monopoly. The new model will need approval by 75 percent of AWB's shareholders. No timetable has been set for the meeting, AWB's spokesman said on Monday.
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