THE Pastoralists and Graziers Association has added fuel to a US-led attack on Australian monopoly wheat exporter AWB over its dealings with Iraq before president Saddam Hussein was toppled.
THE Pastoralists and Graziers Association has added fuel to a US-led attack on Australian monopoly wheat exporter AWB over its dealings with Iraq before president Saddam Hussein was toppled.
The anti-single desk US wheat lobby last year accused the AWB of overcharging the UN’s Oil for Food program (OFF) in Iraq.
The PGA, which also opposes the single desk, said it was aware of the potential problem “several years ago” and last week called for a parliamentary inquiry into the allegations.
OFF allowed Iraq to sell oil in order to pay for food, medical and other humanitarian supplies.
But the program is now under investigation because many of the contracts are alleged to have contained surcharges of 10 to 20 per cent of the contract price.
The AWB sold about 10 million tonnes of wheat to Iraq under OFF.
PGA Grains chairman Leon Bradley said it was important to find out if the AWB had acted improperly as soon as possible and said a parliamentary inquiry would be the only way to do this.
“What I am concerned about is [that] Australian wheat growers will be tarnished by the AWB and I would like the full truth to become known so that something can be done about it,” Mr Bradley said.
“And if there is any wrongdoing, Australian wheat growers don’t get the blame for it. It needs to come out now before it becomes more damaging – the US Congress is actually taking an interest in it now as well.”
While the AWB and the Federal Government have rejected the claims, both sides of the argument admit the issue has the potential to seriously damage Australia’s international reputation as a wheat supplier.
The wheat lobby in the US has complained to the US Congress, currently considering the US-Australia Free Trade Agreement.
Australia’s single desk mechanism has long been in the sights of US wheat farmers. It was on the agenda during the recent FTA negotiations, but Australia was able to retain the monopoly exporter’s status.
“The potential for disruption that the Americans may seize on concerns us and that adversely affects a whole range of other Australian primary industries,” PGA communications officer Geoff Gare said.
But Mr Gare said the issue had the potential to affect more than the FTA negotiations.
“From the wheat growers’ perspective too, there is the potential to lose quite a big chunk of their sales . . . there were two millions tonnes sold [to Iraq] last year,” Mr Gare said. “If Iraq is closed off or the Americans or the new coalition body want to open the market out and include other countries there is probably going to be little room for these sorts of deals.”
AWB spokesman Peter McBride said an internal review had been undertaken and AWB was confident it “had operated with the utmost integrity with all wheat contracts under the UN’s Oil for Food program”.
Mr McBride said all AWB’s OFF contracts were approved and vetoed by the UN and now the Coalition Provisonal Authority had seen that all outstanding 2003 contracts – not just wheat – had to be renegotiated and reduced by around 10 per cent.
He said WA growers should be concerned by the PGA’s comments, particularly as such unsubstantiated claims undermined Australia’s international wheat trading reputation.
“We are a little bit disappointed by the PGA’s comments, considering they seem to be similar to comments being run by the US Wheat Associates,” Mr McBride said.
“We also think that WA wheat growers would be disappointed with their comments, considering that there has been no evidence and no named sources in any of the media reports.”
He said the Iraqi authorities were obviously comfortable with the AWB and Australian wheat as the AWB recently won a tender for 100,000 tonnes with the new Iraq Grains Board.
However, Mr Bradley said he was aware of other supporting claims.
The PGA will write to New South Wales senator Bill Heffernan and South Australian senator Jeannie Ferris, who chair the Rural and Regional Affairs and Transport Legislation Committee.
It hopes to find out whether the Iraq claims could be included in the terms of reference of a current inquiry or in a separate inquiry, or even if there is any chance of the claims being investigated.
The Rural and Regional Affairs and Transport Legislation Committee was critical of Wheat Export Authority and the Australian Wheat Board during its ongoing inquiry last year.
Following the committee’s report, the Wheat Marketing Act was amended and an independent panel was set up to conduct a review of the WEA as well as the 2004 annual review of the AWB.