LONDON, U.K. – Australia is getting high marks from the U.S. for the way it’s changing its grain marketing system.
But U.S. secretary of agriculture Dan Glickman says the Canadian government’s proposed changes to the Canadian Wheat Board leave something to be desired.
“I’ve been impressed with the movement in Australia with respect to their deregulation activity,” Glickman said. “I think they have been stronger on this than the Canadians have been.”
Australia is turning its wheat board into a private farmer-owned company with no government financial guarantees. It would still be the sole exporter of Australian wheat.
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Proposed legislation in Canada would put farmers on the CWB’s board of directors, but the government would continue to guarantee initial payments and back up the board’s borrowings.
Glickman made his comments following a speech to an international grain conference held here June 19-20 in which he reiterated his government’s opposition to “state trading”, a term he applies to both countries’ wheat boards.
“State trading disrupts and manipulates markets through artificial pricing,” he told some 300 delegates attending the International Grains Council conference. “On the export side they often hide subsidies. On the import side they can contain supply and raise prices for consumers.”
Earlier Canada’s wheat board minister Ralph Goodale told the same meeting those who don’t like single-desk selling agencies must do a better job of making their case.
“The onus is on those who believe they have a problem to identify their concerns precisely and in concrete terms and come up with sensible solutions to handle practical problems,” he said.
The American government has said it intends to make state trading organizations an issue in the next round of world trade talks beginning in 1999.
Calm the waters
But Trevor FlŸgge, chair of the Australian Wheat Board, said he hopes the issue can be headed off before it turns into a major fight.
“It’s definitely going to be an issue, no question,” he said in an interview. “But as to how much it’s going to be pursued, that’s something we’ll have to wait and see.”
He said the Americans now appear to be more intent on dealing with the issue of using health and safety regulations to limit trade, prompted by fears that Europe may take steps to restrict imports of genetically modified oilseeds.
Despite Glickman’s kind words about reforms to the Australian board, FlŸgge didn’t give credence to the U.S. secretary’s comments about state trading.
“We’re trying to get to as many people as we can to make it very clear that the so-called distortions they talk about are absolutely perceived, they are not real,” he said.
Just as the CWB has done, FlŸgge rejected U.S. charges that the boards use their monopoly powers to undercut American wheat in competitive markets.
The world price is set by U.S. futures markets in response to supply and demand, he said, and the boards respond to those prices.
“We don’t discount the market,” he said. “In fact we have a very clear policy of getting a price above those values.”
He said buyers are willing to pay a premium to the two wheat boards because of the quality, reliability and consistency of the shipments they receive.
FlŸgge met with Goodale during the conference to discuss ways the two countries can work together to deal with the American attacks.
