"Single Desk" Deregulation for Barley, no negative effect found

[TOM4CWB]

Mallee,

I see that Malcolm Bartholomaeus
Managing Director Callum Downs Commodity News P/L has an interesting article on Barley marketing reform.

Here is Malcolms thoughts on the issue from his January 2nd 2007 newsletter.

"SA Barley Market Reform."

"There seems to be a
reluctance to believe the conclusion that no group of
growers will be worse off if the barley market in SA is
deregulated.

In the old days of state based “single desks” all going into
some markets, the seller offering the lowest price got the
deal.
That seller than delivered the grain, and returned that
lower price to all growers in their state via their pool. If
another marketer wanted the business they would have to
undercut, and get an even lower price for their growers.

The theory is that multiple sellers will drive prices down to
the price on offer from the lowest seller. If there is only
one seller this cannot happen - they will hold prices up for
the benefit of growers – the classic single desk defence.

We are in a very different world now and I don’t think these
old arguments apply any more. The old state marketing
boards may have had each other to compete with for sales
in the export markets, but in their own states they had a
monopoly when it came to “buying” that grain to deliver.

Today if we have multiple sellers, we now also have that
same group coming back into our market to buy that grain.

If a marketer sells too cheaply overseas, that marketer will
also have the cheapest prices on offer to growers back here.

To make themselves attractive to growers they have to try
and get the best price for their export sales, not the lowest
price as per the old theory.

In the old days ABB did not have to be attractive to growers
because they were the only ones there. Growers had no
choice.

We now have limited choice and will have much
more choice as to who we sell to, and what price we get,
when in a deregulated market.

I can accept the conclusion that the group looking at the
issue could not find any group of SA barley growers who
would be made worse off if the market is fully deregulated."



I am very thankful for the precise and clear thoughts that are directly applicable to our Canadian situation... IMHO

Here is Malcolms contact information for anyone interested in the newsletter he publishes.

callum@capri.net.au.

Malcolm Bartholomaeus
Managing Director Callum Downs Commodity News P/L

Clare Office: Adelaide Office:
Callum Downs Callum Downs
PO Box 54, Clare, South Australia 5453 Steadfast House, 239 Magill Rd, Stepney, 5069

Ph08) 88422781 Ph08) 83666583
Fax08) 88423078 Fax08) 83666528


Since the above conclusions closely match the essence of the Western Grain Marketing Panel Report;

What reason does any "single desk" supporter have for not deregulating barley in western Canada?

[rkaiser]

Funny no single desk reporters respond to this article!!

[TOM4CWB]

Snappy,

We should see if we can get Malcolm to a conference over here.

I have been very impressed with his 3rd party views. If he see's the single desk in wheat has a possible benefit... he say so and why.

Maybe that would be too much for some though!

[malleefarmer]

Tom the changes to barley marketing have gone through without a murmur thus far.
Even the most ardent supporters have reluctantly agreed nobody will be worse off but in the same breathe they say there wont be huge benifits of change, so basically the change will happen.
PS this year in the drought less than 15% of grain has been pooled and sold to the single desk holders so alot of grain has been sold by single desk supporters outside the system.

There have been rally etc etc with only a few of farmers going to show support for awb as well. I couldnt attend as i didnt reach the mandatory age bracket of 72 plus years to attend

[TOM4CWB]

Mallee;

The internet and our communication systems certainly have revolutionised grain marketing!

Callum Downs called it perfectly in the last edition... it is bang on well thought out... Malcolm really knows marketing grain!

Does he ever travel and give seminars?

Is there a possibility that he might come and share his knowledge with us in Canada if we wanted to bring him up here?

[Fransisco]

[Fransisco]

[Fransisco]

[Fransisco]