The AWB Are Camel-Raping Faggots

What possible solution could there be to this thorny dilemma?

DROUGHT-stricken wheat farmers will tomorrow get an offer they can’t possibly refuse – except that it would be illegal to accept it.

The Australian understands that bulk handler CBH will tomorrow offer wheat farmers about $270 a tonne for their wheat, to meet soaring demand in Indonesia and Malaysia.

But the offer cannot be accepted. Wheat farmers can only sell to AWB, which yesterday announced that its pool price would be somewhere between $245 and $255 a tonne.

Single desk supporters (I know there’s a few of you reading) – defend this if you can.

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11 Comments on “The AWB Are Camel-Raping Faggots”

  1. Steve Says:

    Sam, you’ve got the figgures wrong!
    The single desk will ALWAYS be of benefit to farmers. How I don’t know, but more enlightened minds have worked it our for us. You see, allowing a market would allow market failure: which is really bad, for some reason.

  2. BJAS Says:

    I am not a supporter of the single desk; but it doesn’t always work this way.

    Sure, in this instance, a participant in the market is willing to pay more, but the single desk generally provides a more stable price structure. One cost of the single desk is an inability to take advantage of idiosyncratic and beneficial variations in price but you also avoid the converse, hopefully. Or at least that’s what they tell us.


  3. “One cost of the single desk is an inability to take advantage of idiosyncratic and beneficial variations in price but you also avoid the converse, hopefully.”

    There is a derivatives market. We don’t need no steenkin AWB!

  4. ozrisk Says:

    The single desk sucks. It starts with a $68 million bill to the pool and get worse from there. It had no place 50 years ago, never mind now. Kudos to Costello for saying that AWB should allow the sale.

  5. BJAS Says:

    ‘There is a derivatives market. We don’t need no steenkin AWB!’

    I doubt that the average producer is willing or able to hedge their position through the derivatives market. And you can only imagine what would happen with that market’s capacity to amplify losses, particulalry when used by the inexperienced.

    Very practical suggestion!


  6. That is the lamest excuse for the AWB. Millions of Australians invest in equities markets, with no or little training and rely on their broker or financial planner.

    Farming is tied very closely to banking. To suggest that a Agribusiness banker could not arrange these things (with the backing of a bank) is an absurd thing to say and a pitiful excuse for the AWB’s 10% margin on this trade.

    So what if some people don’t want to use their own bank – why should everyother grain farmer be compelled to deal with the AWB?

  7. ozrisk Says:

    ABL,
    It has some basis in fact – as do all bad arguments. The contracts for wheat traded on the ASX are only thinly traded and trying to get a contract or two through the CBOT if you are trading wheat or the Winnipeg, Kansas or one or two others for other grains (think canola, lupins, barley etc.) is almost impossible, never mind trying to trade on a futures exchange on another continent and at midnight.
    It is a good reason to have a few biggish players, without compulsion, not a reason to have an enforced monopoly. Without the single desk, farmers wanting to hedge could go to CBH, AWB, Elders etc. and still hedge, getting all they are now, without the silly charges and fees that the AWB add in to the pools’ operating costs, before they even get off the ground.


  8. Thinly traded: because of the AWB?

  9. ozrisk Says:

    Probably has an effect, ABL – but liquidity on these markets is also a network benefit; the more liquidity there is, the more you get. The CBOT has most of the liquidity.
    If the single desk were removed it may well improve, though, as then CBH would be rading with Elders rural, individuals would also have more uncertaintyto play with.

  10. Yobbo's Mum + Dad Says:

    CBH only wants to buy high grade wheat so what happens to the rest, why didnt they come up with the price earlier in the year. CBH is also a monopoly built with farmers money.

  11. ozrisk Says:

    Not to put too fine a point on it – Bollocks.
    From the CBH press release:

    The CBH Group Wheat Pool will accept all grades. Please be aware that grade spreads will reflect requirements for specific grades under the application e.g. noodle wheat (a grade not applied for under the licence) will be returned to the National Pool and spreads will reflect this.

    On the history point – CBH lost its monopoly on canola and the other pooled grains a few years ago. You need to update.
    CBH was built with farmer’s money – and is still owned by them as a co-operative. Try looking at the name – unlike the AMP, CBH still means co-operative – there are (from memory) 6000 shareholders, all farmers.
    Try again, Mum & Dad. Wrong on all points – except the last.


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