Nationals appear to be in a bind. You can't solve a mess caused by over-regulation with further regulation. One thing alone will sort this mess out - a free deregulated market!
----------------------------------------------- Minister sued over monopoly
By Caroline Overington
April 21, 2007 12:00am Article from: The Australian
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AGRICULTURE Minister Peter McGauran is being sued in the Federal Court over his refusal to grant the right to export Australia's wheat through companies other than AWB.
The action is the first serious attempt to use the court system to break AWB's monopoly on wheat exports, and allow grain growers to sell wheat to whomever they choose.
A Sydney-based grain trading company, Ozepulse, lodged the application before Easter.
Papers were served on Mr McGauran this week. He is expected to be called as a witness.
He will be asked to explain why it is not in the public interest for a private trader to sell 50,000 tonnes of wheat to Yemen, at a price that is $50 a tonne higher than AWB is offering.
Ozepulse last year applied to sell the wheat to the Middle Eastern country, but growers could not accept the offer because, by law, only AWB was then permitted to export wheat.
Ozepulse managing director Peter Howard said Mr McGauran had written to him in the wake of last year's Cole report, which found that AWB had been paying kickbacks to the regime of Saddam Hussein, and "specifically called for applications to export wheat".
As punishment for the kickback scandal, AWB was stripped of its right to veto applications by rival traders.
The power was granted instead to Mr McGauran, who is required to consider whether applications to export are in the public interest.
The Weekend Australian yesterday obtained a copy of Mr McGauran's reasons for refusing the application.
He said he had received "numerous letters" from "farmers" and "parliamentary colleagues" indicating support for the single desk, which is currently held by AWB and protects its export monopoly.
Mr McGauran said he had considered "AWB's advice on the application".
AWB told Mr McGauran to refuse it. He had also taken into account the views of grain growers who supported AWB.
Mr McGauran agreed that Ozepulse could obtain enough wheat, it had the right infrastructure, and it had a "positive relationship with Australian grain growers". He also agreed that West Australian farmers would benefit from the deal, and would get higher prices if the applications were approved.
But the minister refused the application in part because Ozepulse had no experience of exporting wheat in bulk.
Mr Howard said this was absurd because AWB was the only company permitted to export Australian wheat.
He was told the export would not deliver significant benefits to the Australian public.
Mr Howard immediately re-applied, telling Mr McGauran that Australian wheat would displace US wheat in Yemen, and that Yemen would "continue to purchase Australian wheat, developing long-term, value-adding opportunities for grain growers".
He said it was a "feature of democracy where individuals are free to choose who they deal with. But he knocked us back".
Mr Howard said he had no choice but to take action in the Federal Court.
"The discovery will be very interesting because there were cabinet meetings, and we want to know who was there, and what was said," he said.
"Were there any discussions with AWB? Did AWB tell the Government what to do? Are they pulling the strings?"
Melbourne lawyer Adam Bisits, acting for Ozepulse, said the company was asking the court to review the decision, set it aside, and direct Mr McGauran and the Wheat Export Authority to grant the company's application "where it's still feasible".
"But if the customer has been lost, we will be seeking compensation, equal to the profit/loss," he said.
The WEA received 46 applications to export 5.3 million tonnes of wheat in the wake of the Cole report. The applications were made by 18 companies.
AWB wrote to the minister in December, recommending that all applications be refused.
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