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.