Australia's wheat growers are deep in discussion over exactly how much of a watering down of full-service operations they will accept in running the country's controversial wheat export monopoly.
If AWB Ltd has its way, the watering down will be considerable, with the former Australian Wheat Board keen to retain control over marketing much of Australia's wheat, which forms the second-largest block of wheat exports in the world.
An industry analyst said that a "take it or leave it" model now put forward by AWB to wheat growers means AWB is refusing to hand over client lists, marketing records and relationships with customers built up over decades of marketing Australia's wheat.
The Australian government last year stripped AWB of its export monopoly after an inquiry found it had paid kickbacks to the former Iraqi government of Saddam Hussein to secure sales.
In May, the government decided to keep the monopoly export system - favoured by growers but opposed by the United States and private grain groups. But the monopoly is to be operated from next year by a new grower-owned body, to be established by industry consultations and approved by the government.
Two weeks ago, AWB ditched plans to hive off its export arm AWB International to operate the monopoly, deciding instead to create a new "shell" subsidiary to bid for the job.
The new subsidiary, to be owned by growers, would conduct only essential corporate services, tendering out lucrative export marketing, grain acquisition, trade financing, business processing, ship chartering and supply chain operations.
This would allow AWB to bid for those services on export deals. AWB this week said that it was not prepared to negotiate with farmers on its latest proposal. Farm groups have said that they prefer the new monopoly operator to conduct all services, but will negotiate on this.
Some industry analysts, who do not want to be named, said on Friday they were sceptical that farmers had the expertise and ability to operate all the services, which back the monopoly.
John Ridley, chair of the grains committee in Australia's largest farmer group, the New South Wales Farmers Association, disputed this. But the only non-negotiable point was that growers own the new company, he said.
To operate all services the new Grower Company would need to draw heavily on AWB's staff and expertise, Ridley conceded. Ron Storey, a former manager of AWB's national export pool and a well-known industry figure, said it was possible to split single desk management from other services, including sales and marketing.
This could involve the single desk operator setting prices, without conducting sales and marketing, he said. AWB in the past operated as pricing manager, selling the wheat to international traders, before boosting its own marketing in the 1970s and 1980s, he said.
Some wheat is still sold in that way even today, even though the vast bulk of AWB's recent-year sales have been direct, bypassing middlemen traders, Storey said.
Sales through traders would be one model which would be considered in present discussions, with the new "shell" monopoly operator free to contract sales and marketing services to traders including international grains giants such as Cargill, or AWB, or barley exporter ABB Grain, he said.