Howard to meet AWB chief after Iraq halts trade

By Virginia Marsh
February 14, 2006
The Financial Times
Original Source: http://news.ft.com/cms/s/f051c2f6-9d49-11da-b1c6-0000779e2340.html
John Howard, Australia's prime minister, on Tuesday moved quickly to stem further political fallout from a scandal over bribes allegedly paid to Saddam Hussein's regime, saying he would try to broker a deal to enable his country to continue its lucrative wheat exports to Iraq.
The prime minister's decision to meet the chairman of AWB, the wheat company at the centre of the allegations, before the conclusion of an official inquiry reflects growing concern about the damage from the scandal both to the government and the country's reputation.
An opinion poll published on Tuesday showed the opposition Labor party had overtaken Mr Howard's centre-right coalition in the polls once votes for small parties were redistributed. 
It also showed an erosion in the prime minister's personal popularity after a fortnight in which the inquiry - and question marks over whether the government knew of the bribes - have dominated much of the media.
Mr Howard's intervention on Tuesday followed the Iraqi Grains Board's decision on Monday to suspend contact with AWB, Australia's monopoly wheat exporter. It is alleged that the company, the single biggest supplier of wheat to Iraq, breached United Nations' sanctions by paying some A$300m in bribes to the Saddam government.
The prime minister said he would explore options for wheat exports to Iraq at a meeting with AWB in Canberra on Wednesday. Under AWB's monopoly, it can veto any bulk wheat exports from Australia. 
The move comes amid reports that Iraq is planning to reconsider a large wheat tender after being disappointed by high US prices. Canberra has been one of the Bush administration's staunchest allies in Iraq but there is strong rivalry between the wheat industries in Australia and the US, two of the world's largest agricultural exporters. 
Mr Howard also sought to quash speculation that his government was planning to strip AWB of its monopoly, a long standing point of contention with Washington. US growers have lobbied hard against the provisions, arguing they give Australia unfair leverage.
There would need to be a strong national interest case in order to alter [the existing AWB provisions], the prime minister told parliament. What we are considering now has to be looked at in isolation from that ongoing question.
Pressure on the coalition – which counts farmers among its key constituents - to solve the impasse with Iraq has been increased by forecasts of a bumper wheat crop for the present financial year. In recent years, Iraq has accounted for up to 15 per cent of Australian wheat exports.
Abare, the country's official commodity forecasting agency, on Tuesday lifted its prediction for the wheat crop to 25m tonnes, an increase of 11 per cent over last year and one of the best results on record.	  	
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