By Boyd Champness
AUSTRALIAS wheat and barley growers entered a new era last week with the official privatisation of two former statutory authorities.
AWB Ltd, formly the Australian Wheat Board, and the Australian Barley Board are now unlisted public companies, with control passing into growers hands.
AWB Ltd is already Australias largest agribusiness, with an average annual turnover of A$4 billion (£1.7bn) and a capital base of A$600 million.
Under the changes, the Federal Government will no longer underwrite AWB Ltd borrowings to finance harvest payments. This does not affect the smaller ABB because its structure didnt allow for government underwriting.
Growers will be issued shares to both boards later this year, depending on how much grain theyve delivered to them over the past three years.
AWB Ltd is expected to list on the Australian Stock Exchange within the next two years.
In the interim, and over the ensuing years, AWB Ltd will stand or fall on its performance, regardless of past reputations. It has, however, secured top international credit ratings and is off to a good start.
But international grain traders salivating at the thought of Australia relaxing its single-desk marketing arrangements might have to wait a while before dining out.
Under Australian law, all export wheat and barley is marketed and sold by the AWB and the ABB. Australias competitors argue that this marketing tool is unfair – likening it to a hidden form of subsidy – due to the sheer size of both marketing boards.
However, AWB Ltds single-desk marketing arrangement is subject to a National Competition Policy review next year and a review of the Wheat Export Authority in 2004.
A review of the ABBs single-desk marketing arrangements will take place in 2001.
It would be a very brave politician who calls for changes to Australias marketing laws at the early stages of privatisation and while world subsidies continue to manipulate markets.
ABB chief executive Michael Iwaniw said both boards had pursued privatisation because the old arrangements restricted them from expanding.
“Privatisation opens up a whole new range of opportunities,” he told The Weekly Times. “We will be dealing more directly with our customers.
“We may enter into strategic alliances with organisations which can assist our core activities and bring value to the shareholder.”