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 Price not shares will drive grower loyalty: AWB 

Price not shares will drive grower loyalty: AWB

12/08/2008 7:25:00 PM
Price, not a the shareholding structure, will deetermine whether wheat growers remain loyal to AWB in the new deregulated export market, according to the latest research by pollsters IPSOS.

According to AWB, the IPSOS research confirms that Australian wheat growers will make their grain marketing decisions based on four key factors: price and incentives, security of payment and service.

The research found a unanimous view that price and being a 'good player' are the bottom line when it comes to a 'good buyer' of Australian wheat.

"Whilst there is certainly some positive sentiment towards AWB, wheat growers are most loyal to price and security of payment, so it essentially depends what the deal is," the research found.

"If AWB does not offer a good price or maintain security of payment, then growers will turn to other buyers and distributors that will give them what they want."

AWB says the research undermines claims that the retention of A class shares as part of a dual class share holding structure are essential to maintain grower loyalty in the new deregulated wheat export market.

"A class shares do not factor into grower decisions on whether to do business with AWB versus competitors, even among advocates of A class shares," the IPSOS research says.

"Price per tonne is the primary factor when choosing who to do business with any grain marketer. Reliability and security of payment are also extremely important factors."

AWB managing director, Gordon Davis, said the company wants to amend its constitution so that "AWB has the best possible chance of providing a competitive deal to wheat growers in the new deregulated market".

"If the status quo is maintained, AWB will be forced to compete against bulk handlers and the multinational traders with one hand tied behind its back and will not be able to offer wheat growers the best commercial deal," he said.

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Comments


Date: Newest first | Oldest first
If growers' rights are extinguished by the removal of article 2 AWB will convert to a middleman trader and will become a price matcher not a price maker.
Posted by Jock on 13/08/2008 6:53:15 AM
Federal government has allowed our industry to be totally available to overseas governments directly. ie Indonesian Government for one, as world nations struggle for food, dealers will disappear! AWB can choose to be another dealer & disappear or hold onto grow loyalty. as we enter a new marketing era even grain commentators haven't got a grasp as they think we are headed to a USA grain marketing system.
Posted by Ray on 13/08/2008 7:59:54 AM
Welcome to post single desk life, people.

For those misguided soles who still believe they are going to be better off with the demise of single desk, (if this is the case) you are one of the tiny minority. Unless you have rail access on your property and massive storage capability, you will not be better off at all.

Demise of the single desk serves 2 purposes, the interests of corporates and works against the interests of the family farm.

I'm so thankful our family is out of grain growing, especially now that quality payments are being stopped. There is now no encouragement for producing high end product.

The US values and protects its farming sector, yet our stupid and idealistic federal goverments are happy throwing the Aussie Primary Production sector to the wolves.

Posted by cq on 15/08/2008 12:20:54 PM

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Q: Do you support the creation of a 'guest worker' scheme bringing in Pacific Islanders to counter Australian agriculture's labour shortages?

Yes
(69.1%)

No
(25%)

Undecided
(5.9%)

Total Votes: 508
Poll Date: 10/08/2008

2:41 PM AEST | AWI's new board can only succeed in old battles by fighting in new ways.
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