Kept out of the loop

30 Jun, 2004 10:00 PM

Grains Council kept us in the dark: WAFarmers


WAFARMERS president Trevor De Landgrafft has accused the Grains Council of Australia (GCA) of keeping WA wheat growers out of the loop in early negotiations about the future of the Iraq debt.

Growers have been furious at the lack of consultation and timing of the announcement, which was made in the middle of seeding .

The move could see about $138 million of debt - 37pc owed to WA - written off to help the struggling Iraqi economy get back on its feet.

"We believe GCA, while probably making the right moves at the end of the day, should have allowed us much more time to be able to talk to growers about it," Mr De Landgrafft said.

"We know the decision had to be made when it was made because the government had to move forward with their financing provisions.

"But we believe there was time before that when we should have been brought into the loop and given the opportunity to talk to growers."

Mr De Landgrafft said negotiations were well advanced before WAFarmers was consulted. It had just 24 hours to make a decision on whether to support the final package or not.

GCAustralia director David Ginns said WAFarmers had received as much time to make a decision as other member states.

He said the GCA had only had 48 hours extra notice of the government's desire to seek industry endorsement for the $20m grains facility.

Mr Ginns said he had been extremely frustrated with what he said were inaccurate claims regarding the wheat debt situation.

"No decision has been taken about the debt because the Paris Club is not meeting until October," Mr Ginns said.

"Now whether GCA or WAFarmers or any of the other organisations agrees with what the government may or may not do is academic.

"The debt that they look like forgiving is a debt that was taken over when the claim on the Export Finance and Insurance Corporation (EFIC) was made by AWB for 80pc of the original sale amount."

Mr De Landgrafft said WAFarmers had maintained the government had a moral debt to pay growers what they were owed.

"We have maintained that momentum all along," he said.

"The government said it would re-offer EFIC insurance and credit for growers to trade with and it would provide $20m worth of infrastructure to shore up market share.

"The government said take it or leave it if you want to do it, and get off our back, or you can hang out for the money."

Mr De Landgrafft said the offer of the $20m for the processing plant was on and off the negotiating table while WAFarmers, represented by grains section president Peter Wahlsten, had to make up its mind.

"Now we could have walked away and it was an option we thought about," Mr De Landgrafft said.

"But at the end of the day we didn't believe we were going to achieve anything by walking away, in fact we were going to lose the package and the government still wasn't going to pay out and it has maintained it will pay out when Iraq when is able to pay."

Mr Ginns said any decision to forgive debt was a Federal Government issue because the liability was held by taxpayers.

He said the issue of possible debt forgiveness had been discussed.

"In our letter to the Prime Minister supporting the in-principle agreement to invest $20m, we said that if there is to be any debt forgiveness that it will cause some disquiet amongst the grains community," he said.

"This is because there was a level of belief that they are owed money from Iraq now the facts of that issue are entirely different."

Mr Ginns said the debt was not owed to growers, but to AWB, and if it was not paid it would be a default of payment.

"When the final payments of the three affected pools were accepted by producers who delivered wheat into those pools, they then finalised the sale," he said.

"Therefore no debt is owed to any single producer who delivered into those pools and that is a legal, contractual fact."

Mr Ginns acknowledged the whole process had occurred quickly and said governments work in mysterious ways.

"It's one of those issues that, internally, the government might have been wanting to do something for quite some time, and it may have had something to do with the budget, I don't know," he said.



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