Wednesday, September 08, 2010

Bring the Australian Wheat Board back under the control of the government!

(The following article is from p. 4 of the September issue of the CPA (M-L)'s paper Vanguard)

Nick G

Australian grain growers, the purported “owners” of the Australian Wheat Board (AWB), are incensed that the company could soon be controlled by Canadian giant Agrium Inc.

This follows on from the Japanese Sumitomo Corporation’s 50% purchase of Australian grain trader, the Emerald group last March, and Canadian grain firm Viterra Inc’s takeover of South Australia’s ABB Grains Ltd last year.

The AWB was founded in the wake of the 1930s Depression to save grain growers from the anarchic ravages of the domestic and international markets for wheat.

As a government-owned and operated entity it ran the “single desk” system under which it was the sole marketer of wheat for the international grain trade and the domestic purchaser of “last resort” – meaning that it always stood ready to bail out struggling farmers when falling demand or prices threatened to leave them in ruin.

Ironically, given the source of the current threat to the Board, it served as a model for the Canadian Wheat Board.

Both the CWB and the AWB were opposed by US grain producers on the grounds that government purchase and sale was unfair in a free trade environment. This is despite the latter’s heavy subsidies from the US Government, which rather undermines the credibility of “free trade” arguments.

Nevertheless, conservative Canadian and Australian governments driven by neo-liberal ideology have worked to strengthen the US imperialists at the expense of the farmers of their own countries.

In 2007, the Canadian Harper government tried to end the CWB’s “single desk” but was defeated.

The AWB’s “single desk” was abolished under Kevin Rudd despite a pre-election pledge that it be retained.

But it was the government of John Howard that had set the wheels in motion with the 1999 privatisation of the AWB.

This was sold as a move to give wheat growers ownership of the Board; indeed, the 2009 AWB Annual Report opens with the question “Who is the AWB?” superimposed over a young cocky looking over his wheat crop.

However, as a publicly listed company, the AWB is actually in the grip of a small group of local and foreign investment banks, insurance companies and fund managers. The largest single shareholder, HSBC Custody Nominees (Aust) Ltd holds around the same number of shares as the bottom 41,000 retail (or “Mum and Dad”) investors.

The threat to the AWB from Canada’s Agrium follows an announced merger between AWB and GrainCorp. The latter emerged as a competitor following the demise of the single desk, and a merger of the two would have strengthened the international competitiveness of an Australian diversified agribusiness – hence the pre-emptive attack by the Canadians.

(Incidentally, GrainCorp and the AWB may be competitors, but four of the top five shareholders in each company are the same: HSBC Custody Nominees, JP Morgan Nominees Australia Ltd, National Nominees Ltd, and ANZ Nominees Ltd. They represent 32% and 36% respectively of the total shares in each company.)

Grower dissatisfaction is emerging around the country.

President of the SA Farmers Federation John Lush warned back in 2004: “The US dominates Australia in the trading environment and we cannot afford to lose any of our advantages such as collective bargaining and single desk marketing if we are to have any chance of competing internationally.”

On August 12 2010 Mark Harrison, chairman of the NSWFA grains committee told the Weekly Times “What we are left with is Australian wheat growers struggling to compete in a world market still corrupted by subsidies.” He called for the recreation of a single marketing desk.

The AWB provided economic stability for many small and medium-sized Australian farmers for half a century.

Imperialist-serving neo-liberal governments of both persuasions, having privatized the Board and removed its single desk status, are simply engaging in nation-wrecking and the undermining of economic sovereignty.

Stop nation-wrecking by multinationals – nationalise the AWB and bring back the “single desk”!

Reject the unequal “free trade” arrangements!

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