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(Cairns... Far North Queensland)


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Selwyn Johnston



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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...




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Written and Authorised by Selwyn Johnston, Cairns FNQ 4870