.
AUSTRALIAN
WHEAT BOARD
IT COULD BE
‘COLE’ COMFORT FOR THE AWB
International Trade has always
been the most difficult of all human activities. Because it is such an “open
market” situation every seller is trying to convince the buyer with regards to
quality, price and conditions and each purchaser is trying to extract the best
deal possible. Given that it is almost completely a regulation free environment
it is easy to understand that it can become a cutthroat business. It can be
said, without question, that there is no such thing in international trade as a
straight up and down deal.
Before marketing can really
start it has to be recognised there are a swag of advantages and disadvantages
in the market place and among these are Government subsidies, shipping, method
and timing of payment, sovereign risk and any number of extraneous influences.
To add to this growing confusion, and because Governments are involved [and
don’t believe otherwise] the life of an international trader, particularly one
involved with a commodity in oversupply can become very complex.
Given this background then why
has the Australian Government commissioned an inquiry into the activities of
Australian Wheat Board (AWB) Limited in what is almost certainly the most
complicated of circumstances. No one really knows and it is unlikely that the
Government will come up with any sort of acceptable explanation. It no good
saying that it is to protect the good name of the United Nations as some of its
own employees were mentioned in dispatches when it came to receiving oil
contracts from Saddam.
And apart from that the whole
“Food for Oil” program was designed and redesigned to the point where
corruption was almost certainly unavoidable. So if the grounds on which the
dollars were obtained to purchase Australian wheat were flawed then why are we
delving into the activities of a minor player whose claim can understandably be
that it was just “playing by the rules” in the interests of its growers and
shareholders, or, if you like, in the “National Interest”.
On this of course we can only
speculate. There are some things we know. Firstly, Australia is a large,
reliable and efficient producer of grains. So much so that Australia could not
be ignored in any worldwide grain play.
We also know that Australia has
a single desk selling system that is dedicated to working exclusively in the
interests of the growers. The history of this system is that it was originally a
Marketing Board, Government and grower owned and operated, and much of that
culture survives today. As we know most of these Boards were disbanded in the
interests of privatisation. We also know that it would be very difficult to
manipulate the Australian industry, particularly in relation to exports, while
the single desk selling system remained in place.
In addition, we know that
several of the world’s grains dealers have operations in Australia and these
operations almost by definition would be subject to, and affected by, the single
desk.
We also know that the Prime
Minister has been reported as saying that he has an open mind on the single desk
selling system remaining in the hands of AWB Limited so there are plenty of
balls in the air.
There is an old saying about
Government initiated ‘Inquiries’ and it goes along the lines that you never
start one up unless you know exactly where it is going to finish. Maybe when the
Cole inquiry started the belief was held that it would achieve certain
objectives, report on them as expected and then go the way of all reports, to
collect dust. It was to have served its purpose and moved on. Of course what the
outcome will finally be is up to Mr Cole exclusively and as the inquiry goes on
it is becoming clear that he totally in control and fiercely independent.
But what, in the beginning,
could have been its intended purpose, whether that end transpires or not. It
would be hardly worth going to all this trouble to hang a few minor corporate
types out to dry. Again it would have been quite fanciful to believe that any
inquiry could even start to clean up the practices relating to international
trade let alone define them.
It is clear that this option can
be dropped out of hand. It could hardly have been that we needed to impress or
placate the United Nations as offending them seems to be a global sport. And
further more it would be unlikely to develop a better marketing system for
Australian grain growers as the whole point of AWB’s activities could be
interpreted as bending the rules to the benefit of Australian growers. And it
can’t have anything to do with the deals in question, as they are now as dead
as the dodo.
It doesn’t leave a lot of
options but two areas not covered have been private grain trading and the single
selling desk.
And here, given the amount of
money that has been expended to date, you will have to come to your own
conclusions.
See also...
