The Australian wheat industry’s position in the international wheat market will be boosted by the Federal Government’s announcement today of an in-principle agreement to commit $20 million to develop a grain processing facility in Iraq.
AWB Chairman Brendan Stewart said the proposed investment into the wheat supply value chain would provide an avenue to retain and grow the Iraqi wheat market for the benefit of Australian growers.
Mr Stewart said growers would be disappointed by the announcement that the majority of the debt owed by Iraq will be forgiven. But he said the decision was understandable given the situation in Iraq, and that it may assist in the long-term development of the country and its wheat market.
“Although full recovery of the debt to growers is not possible, we have made it clear to Government that they should use their best endeavours to continue to seek recovery of at least part of the debt on behalf of growers,” Mr Stewart said.
“AWB is focussed on ensuring Australian growers are recompensed through long-term access to the Iraqi market in the future – achieving this is likely to be worth more for growers in the long run.
“Following consultation with the Government on this issue, we welcome their in principle support to establish processing facilities in Iraq, and we look forward to working closely with the Government on these proposals with an aim to secure long-term demand for Australian wheat,” Mr Stewart said.
The debt relates to wheat sales made by the Australian Wheat Board between 1987 and 1990. The outstanding amount was US$480.4 million, although the sales were insured to a maximum of 80% of their value through the Federal Government insurer EFIC, which has previously paid that amount of the initial debt to growers. The balance owed to growers who participated in those season’s wheat Pools is US$98 million.
“We were always hopeful that the full debt be recovered, and for the past ten years have taken every step possible to achieve this,” Mr Stewart said.
“After consultation with Government and industry, we consider this is the only practical approach to go forward.
“While we are disappointed for growers, we are also realistic about the likelihood of fully recovering the debt. Total Iraqi debt is believed to be in excess of US$100 billion, and in this environment, we understand the Australian Government’s decision.
“AWB is also mindful that major wheat exporters and competitors, such as the US, France and Russia, are likely to forgive significant debt to Iraq to assist rebuilding of the nation,” Mr Stewart said.