Australia: Barley producers willing to retain the barley export monopoly
Barley growers in South Australia want to retain an export monopoly but have indicated they want it to operate more independently from current manager ABB Grain Ltd. (ABB.AU), according to a statement issued on March 28 by South Australian Farmers' Federation, Dow Jones reports.
Of the 5,909 barley growers in the state, some 1,762, or 30%, participated in a ballot, which was completed late last week, about the barley export monopoly, with 80% saying they wanted it while 20% said they didn't.
Asked about maintaining the status quo, 41% wanted the monopoly managed by ABB Grain to continue while 59% wanted more independence for the export monopoly, the federation said.
How this might happen wasn't stated. A third question canvassed growers' preferences for other marketing arrangements, were the export monopoly not be supported by most growers. To this question, 89% said they would prefer the introduction of a licensing authority, similar to one operating in Western Australia, while 11% favored total deregulation. Brett Roberts, chairman of the federation's grains council, said the ballot showed South Australian barley growers back the export monopoly, or single desk, as its known locally.
"There is a lot of pressure on governments to abandon marketing systems such as the barley single desk so state legislation can comply with National Competition Policy. We will need to put a very strong case to the Minister about the value of retaining this system for exporting our barley," Roberts said in a statement.
Perry Gunner, chairman of ABB Grain, said the results of the ballot weren't unexpected. But he doubts any greater independence of the monopoly from ABB Grain will have any major impact on the company.
"From ABB's point of view we will still be very involved in exporting of South Australian barley and involved in exporting barley from other states, involved in the domestic barley market," Gunner said in a radio interview. "This could mean not a lot of change to ABB," he said.
ABB has strong relationships in place in the major markets of Saudi Arabia, China and Japan, which will see very little difference to the company's ability to sell most of the barley exported from South Australia, he said. As well as operating the export monopoly, ABB Grain has extensive interests in grain storage and handling, malting and marketing barley and other grains. South Australia is estimated to have produced 2.7 million metric tons of the national barley output of 9.9 million tons this crop year ending March 31, according to an official forecast.
About 80% of the grain is exported, with feed grade typically destined for the Middle East and malting grade mostly heading to Asia, especially China. The monopoly is one of the last of this type of arrangement that formerly dominated agricultural marketing in Australia.
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