Australian grain growers should benefit from a major overhaul of US food aid programs that will see more targeted humanitarian food assistance and less distortion of international grain markets, AWB Limited Chairman Trevor Flügge said today.
Mr Flügge, who returned this week from Washington after meeting with key members of the Bush Administration and US Congress, said that AWB has always supported aid programs that have as their primary objective the alleviation of poverty and hunger.
"However, historically a number of US aid programs did not serve genuine humanitarian purposes and often acted as an export subsidy helping the US move its surplus stock," Mr Flügge said.
"AWB has campaigned actively in the US to have the impact and effectiveness of these programs reviewed and thus we were encouraged by President Bush’s announcement that US wheat donations would be reformed so they target those in need, and do not undermine healthy commercial trade channels," Mr Flügge said.
Under the proposed changes, the US will phase out donations under the Section 416(b) program, which donates surplus US agricultural products, particularly wheat.
This will be supported by refocusing other programs to target donations towards humanitarian food assistance and reforms aimed at reducing the amount of donated commodity that becomes monetised on the commercial market.
While in Washington, Mr Flügge held meetings with key Congressional Members, including the Chairman of the House Agricultural Committee, Larry Combest, and Ranking Member, Charles Stenholm, regarding the progress of the Farm Bill.
"Those politicians remain quite aggressive in seeking successful passage of the Farm Bill, and adamant in the use of its provisions," Mr Flügge said.
"But it was clear from our meetings that the US Administration, in particular the US Department of Agriculture, recognises the damage that these proposed agricultural support measures will have, not only on Australian producers, but also on the long term competitiveness of the US industry," Mr Flügge said.
"We are unlikely to influence the level of funding - that is not going to change. But the Administration now understands the distorting nature of the current programs and is committed to ensuring that the final Bill which goes to the President limits the impact of such proposals," Mr Flügge said.
While Mr Flügge was in Washington the Senate voted to include a provision to its Farm Bill that would cap direct Government payments to US farmers at US$275,000 per year. The proposed $275,000 annual limit would be 40 percent below the current cap
of $460,000 and well below the $550,000 cap in the farm bill passed by the House last year.
"This progress in the US Senate demonstrates some understanding among the US Congress for what we have saying over the past week," Mr Flugge said.
"The structure of the current system of US farm subsidies only makes those large, wealthy farmers and farming corporations richer at the expense of the US taxpayer. AWB has consistently argued this not only distorts international markets, but also does little to assist the very "family farms" the US Government seeks to help.
"This latest amendment should be seen as a small but significant victory for those advocating a more sensible, commercial approach to US agricultural support," Mr Flügge said.