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Wheat Groups Want AWB Suspension Reinstated

Over the weekend, the U.S. Wheat Associates Board of Directors unanimously approved a resolution urging "the U.S. Congress, the State Department, the Justice Department, the Export-Import Bank and USDA to examine the ramifications of AWB's actions and take whatever actions are necessary to protect the integrity of U.S. market development and export programs."

All three wheat groups - USW, National Association of Wheat Groups and Wheat Export Trade Education Committee - have recently asked USDA to reinstate its previous suspension of the Australian wheat board, AWB.

In a report to the board, USW President Alan Tracy gave an overview of the ongoing investigation into Australian's Wheat Board sales to Iraq over the past decade. Tracy says AWB operates a wholly-owned U.S. subsidiary, AWB (USA) LTD that has used U.S. programs to their advantage.

"I believe that whatever happens to the AWB in Australia, they should pay a price in the U.S. because American farmers have paid a price for AWB practices," Tracy told the board. "While AWB was paying kickbacks to Saddam, and selling 8 million tons of wheat to Iraq, we were completely shut out of that market. Those lost sales, added to what appear to be AWB bribes for wheat sales to Pakistan, Yemen, Indonesia and South Africa, have led to reduced U.S. wheat exports, which in turn leads to lower U.S. prices - which hits American wheat farmers in the pocketbook and increases government support program costs."

Tracy says the U.S. needs to consider several options:

• First, suspend the AWB monopoly from participating in the U.S. futures markets.
• Second, bar the AWB from any further access to the U.S. government credit programs that they have used and abused.
• Third, prohibit AWB from using any U.S. Export-Import Bank programs, particularly for wheat sales to Iraq.

Jan. 30 several U.S. senators sent a letter to USDA Secretary Mike Johanns also urging USDA to reinstate the suspension of AWB USA from U.S. export credit programs.

The senators also pose three questions to Johanns:

1. Is the Cole inquiry sufficiently independent of the current government of Australia to be entrusted with the inquiry?
2. Has AWB USA utilized the supplier credit program to create problems for its U.S. competitors?
3. Is it appropriate for a company run by and for the benefit of Australian farmers to participate in a USDA program intended to facilitate export sales by American farmers and agricultural businesses?