December 03, 2003

 

 

US' Wheat Groups Blame Australia For Supplying Wheat to Iraq

 

Springtime predictions of hundreds of thousands of tons of American wheat streaming into Iraqi ports didn't come true.

 

American wheat groups blame Australia, which has used diplomatic leverage to get a lock on the current market. Australia replies that it's acting responsibly while protecting its interests.

 

The story of how Kansas wheat didn't get to Iraq is a lesson in how messy rebuilding can be.

 

"It's become an incredibly complicated situation," said David Frey, head of the Kansas Wheat Commission.

 

Last spring, as U.S. forces sped across Iraq, it became clear the country faced a humanitarian crisis.

 

The United States and United Nations stepped in to fill the gap.

 

President Bush authorized 600,000 tons of the U.S. grain reserve to be sent to Iraq. That's about 22 million bushels of wheat, a little less than one-tenth of an entire annual Kansas wheat crop.

 

As the nation's leading producers, Kansas wheat farmers expected to see a steady flow of grain to Iraq -- and a chance to eventually sell wheat in a new market.

 

However Kansas' expectation did not come true.

 

"Honestly, I don't think it had much affect at all," said Bruce Ott, a wheat grower outside Maize.

 

After the United States shipped 57,000 tons of wheat to the Persian Gulf for humanitarian relief, the flow stopped.

 

One reason is that hunger hasn't been as big a problem as feared. A larger reason is that while the United States was ousting Saddam Hussein, Australia was strengthening its wheat ties with Iraq.

 

Iraq is considered one of the world's top 10 wheat export markets.

 

Currently, the Americans can't even figure out if Australia is charging fair prices or making deals against which the U.S. can't compete.

 

The United States, despite being the country that led Saddam Hussein's overthrow and now leads Iraq's rebuilding, simply isn't connected as well to Iraq's agriculture.

 

Australian officials say they're following the letter of legal contracts and will be pleased to compete for new contracts as Iraq's economy gradually opens up.

 

U.S. lawmakers, meanwhile, are trying to ensure American farmers get a fair chance to compete. Sen. Pat Roberts wrote to the State Department early in November asking the status of Iraq's wheat contracts.

 

The department wrote back last week that the Coalition Provisional Authority, the U.S.-led current government of Iraq, would ensure "transparency" in wheat deals.

 

In the meantime, the situation in Iraq continues to change. Iraq may be self-governing as early as next summer, possibly through elections.

 

What happens then is anybody's guess. Iraq one year from now may be a potentially lucrative wheat trade partner, or more closed off to American farmers than ever.