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Last Updated: Friday, 3 March 2006, 04:29 GMT
Australia wins Iraqi wheat deal
Australian grain silo
Iraq is the second biggest market for Australian wheat
Australia says it has won a contract to supply wheat to Iraq, despite claims that its state wheat board paid bribes to Saddam Hussein's regime.

Australian Trade Minister Mark Vaile told wheat farmers they could sell 350,000 tonnes to Iraq.

Only last month Iraq suspended grain deals with Australia amid allegations that its wheat board, the AWB, paid up to $222m in kickbacks to Iraq.

Iraq has been Australia's second biggest wheat export market.

Mr Vaile, who visited Iraq last week to lobby against the ban, told a farmers' rally in New South Wales they would have continued access to the Iraqi market.

"Overnight the Iraqi ministers have confirmed with us that they are prepared to buy 350,000 tonnes of your grain in the short term," he said.

The deal is worth about A$70m (US$52m; 30m).

It is thought the trade will not be conducted through the AWB - normally the monopoly exporter - and that the board will waive its veto over other grain companies taking part in the deal.

Bogus fees

The AWB is alleged to have paid kickbacks under the discredited UN-run oil-for-food programme for Iraq.

It is under investigation examining whether AWB executives knowingly paid bogus transport fees to a phantom trucking firm. The money allegedly went directly to the Iraqi government in order to secure lucrative wheat deals.

An Australian judge is expected to report later this month.

The AWB is the world's biggest wheat exporter after the US.

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