U.S. wheat aid to Indonesia hurts Australian farmers

U.S. wheat aid to Indonesia hurts Australian farmers

CANBERRA (Dow Jones): Australia's Trade Minister Tim Fischer yesterday said Australia would be hurt by a U.S. plan that could give up to 500,000 metric tons of wheat to Indonesia as foreign aid.

U.S. President Bill Clinton earlier this month said he had ordered Agriculture Secretary Dan Glickman to begin government purchases of more than 80 million bushels of wheat from local growers, which he said could lift farmers' prices as much as 13 cents a bushel.

Glickman is to use the wheat in a new food aid program, with donations to countries such as Sudan and Indonesia.

Fischer said the government is concerned that up to 500,000 metric tons of the 2.5 million tons food aid program could be directed toward Indonesia, a key Australian market.

Indonesia is one of Australia's largest wheat markets, and purchased 2.37 million metric tons in 1996/97.

"This sadly is (as much) about market penetration as it is about humanitarian aid," said Fischer, and cited comments by a Glickman aide at a press briefing July 18.

The aide said the food aid program would also be used to open new "export channels" for U.S. farmers, Fischer told reporters at a news conference.

Fischer said the decisions would distort the wheat market, and defy assurances from Clinton that the U.S. wouldn't move in on traditional Australian markets.

"Humanitarian aid is a very important matter...But it's the huge size contemplated and the fact that it is directly being pushed in relation to a key and traditional and very strong Australian wheat market, namely Indonesia," that is of concern, he said.

If half a million tons is dispatched by the U.S. to Indonesia...the quantum and the direction and the objective irks Australia," Fischer said.

Fischer said his ministerial colleagues including Prime Minister John Howard will raise U.S. wheat aid to Indonesia during the so-called Ausmin talks over the next two days.

Australia would also separately raise its concerns with U.S. Trade Representative Charlene Barshefsky and Glickman, the trade minister said.

Foreign Minister Alexander Downer and Defense Minister Ian McLachlan will meet U.S. Secretary of State Madeleine Albright and Secretary of Defense William Cohen in Sydney for the annual Ausmin talks.

Indonesia is one of Australia's largest wheat markets. It purchased 2.37 million metric tons of Australian wheat in 1996/97.