Government urged to pay $74 million

26 Jul, 2001 07:12 AM
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WA wheatgrowers, desperate for cash after a disastrous start to the season, are calling for the Federal Government to pay them the monies still owed as a result of sanctions imposed against Iraq during the Gulf War of 1992.

The embargo ‹ still in place ‹ had meant that funds held by Iraq in foreign banks were frozen, and repayment of outstanding debts were deferred ‹ including a substantial amount of money owed for AWB sales from seasons 1987 to 1990.

Because the sales were insured to the maximum value of 80pc of sale value, growers were able to recover some of the debt ‹ but now, with seasonal prospects the worst for decades, growers want their remaining 20pc paid out.

According to WA Farmers Federation grains councillor Kevin Jones, the money still owing at the time of the freeze was $200 million, with WA growers accounting for 37pc of the figure, or around $74m.

Including the interest that would have accrued in the nine years since, the funds would provide a sizeable windfall for growers who need the capacity to make up for lost income and to plant next year's crop.

"Prime Minister Bob Hawke said then that no section of the Australian community would be disadvantaged by the sanctions," Mr Jones said. "He should have said 'except growers'."

"The government must honour its commitment and pay out wheatgrowers, and then collect the balance of monies owing from Iraq when the sanctions are eventually lifted."

Mr Jones stressed that growers were not criticising Iraq, who are regarded as one of Australia's biggest and best customers.

"The Iraqis are honourable customers and will pay the balance when the sanctions are lifted," he said.

He said instead the onus was on the Australian government, which needed to fulfill the undertaking it gave to business in 1992.

WAFF grains council president Peter Wahlsten said with the funds frozen after nearly 10 years and with no sign of them being released, the government had an obligation to reimburse growers who were affected by the decision.

Mr Wahlsten said he would be raising the issue at a Grains Council meeting in Sydney next week, and prior to that, will be hoping to approach Prime Minister John Howard on the matter when he visits Perth this week.

AWB Ltd chief executive Andrew Lindberg said as custodian of growers' pool obligations, the organisation had a role to play in helping growers recoup the money.

However AWB would not be directly involved with approaching the government to repay the funds in advance.

"The is a political issue involving the government of the day, and it is up to the farm lobby groups to progress this issue," he said. "It is not the role of a commercial entity such as AWB Ltd."

"But AWB Ltd will support them with all the figures and statistics necessary."

Mr Lindberg dismissed fears that the outstanding debts would eventually be written off.

"AWB Ltd believes the money will be repaid, it is just unfortunate that it has got caught up in the sanction process," he said.

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