Amanda Haines

July 8, 2004

Wheatbelt farmers came out in droves last week to demand payment for wheat sales to Iraq.

Federal Minister for Trade Mark Vaile met with more than 600 local wheat growers in Merredin and Lake Grace to discuss the Federal Government’s decision to forgive the majority of Australia’s Iraq wheat debt.

The meetings were organised by WAFarmers, and were attended by WAFarmers president Trevor De Landgrafft, representatives from the Australian Wheat Board (AWB) and the Grains Council of Australia, and local politicians.

More than a third of the wheat debt is owed to WA farmers, who comprise the highest percentage of affected growers in Australia.

Some farmers in WA are owed around $25,000 each.

The debt, which relates to wheat sales made by the AWB between 1987 and 1990, amounted to nearly US$500 million.

The sales were insured to 80 per cent of their value, through the Federal Government insurer EFIC, which has paid that amount of the initial debt to wheat growers.

The AWB says the balance now owed to growers who participated in those seasons’ wheat pools is nearly US$100 million.

At the meeting in Merredin, Mr Vaile said that Iraq had no chance of repaying the debt, and the only option was debt forgiveness, which would be discussed at a meeting of major creditors later this year.

He said the important issue was the government’s plans to invest $20 million in wheat storage and handling facilities in Iraq.

“The most important thing is ensuring a future market for our wheat in Iraq,” he said.

The Member for Kalgoorlie, Barry Haase, said before the meeting that “the debt forgiveness is something I was hopping mad about, until I realised there is a very strong commitment of $20 million for grain receival infrastructure, which at the end of the day is at least something which will cement our relationship with Iraq as a regular supplier.”

Mr Haase said that growers would be more out of pocket if there were no relationship between Australia as a supplier and Iraq as a significant international buyer.

“This receival facility will guarantee that we are locked in to that long term supply,” he said.

“Whether it is sufficient for growers to forgive the debt is another matter, in reality the likelihood of that debt being repaid was a bit like hell freezing over.”

Mr Haase blamed the AWB for much of the growers’ discontent over the debt forgiveness.

“Growers are of the opinion that the decision was made without their input,” he said.

“The truth is that the AWB were used as advisors in this whole affair, and the consultation process took place, but the AWB wasn’t doing a great deal to keep in touch with its members.”

Greens (WA) MLC Dee Margetts said she attended the meeting in Merredin because she was angry that a National Party minister could “sell Australia’s rights away with a free trade agreement which could impact on so many jobs.”

“As I understand it, the money isn’t owed by Iraq, the money is owed by the United States – they are responsible for this money that is owed, and they are the ones who should be paying it back,” she said.

Ms Margetts said the Australian Government had made agreements with the US and now had a responsibility to get the money back from the US who were responsible for freezing Iraq’s assets.

“The freezing of assets means that the assets are not held in Iraq, they are held in bank accounts overseas,” Ms Margetts said.

“Iraq was previously holding money in overseas bank accounts to pay their wheat debt, and it wouldn’t take a genius to find out where that account was.

“How can the Department of Foreign Affairs not find that out?

“Mr Vaile says he can’t find that bank account, but really he is more interested in pushing his manky trade agreement.”

WAFarmers president Trevor De Landgrafft said that the sentiment at the meeting was that growers understand the need for the government to forgive Iraq’s debt but they should not have to shoulder the consequences on behalf of the nation’s goodwill.

“After travelling for the day with the Minister, it was clear that having heard growers’ concerns, his views had changed,” Mr De Landgrafft said.

“The Minister made a commitment to take on board the comments made at the meeting and the resolution put forward.”

A resolution passed at both meetings calls on the Federal Government to make a payment of US$98.1 million to AWB International on trust for distribution to wheat growers, and to fund the outlay as a national cost in the same way the Government is funding military and humanitarian assistance to Iraq.