Emerging differences in state grain trading: Australia and Canada

The Australian Wheat Board (AWB) and Canadian Wheat Board (CWB) have attracted attention recently because they are two of the largest state trading enterprises (STEs) engaged in agricultural trade. They have traditionally been viewed as nearly sister agencies. Among major STEs in the world market, these two agencies historically had similar characteristics including: price pooling, cost pooling, export sales monopolies, monopoly powers within domestic markets, grain quality control, and government underwriting of initial producer prices and export credit. However, during the past 6 years, similarities between the AWB and CWB have begun to diverge and the importance of their differences is becoming increasingly apparent. This paper identifies major emerging differences between the AWB and CWB and explores potential explanations (hypotheses) for these dissimilarities. A major point is that reforms in institutional design and legislative changes have given rise to emerging differences in key aspects of the marketing systems and performance. (C) 1997 Elsevier Science B.V.