John Howard can sacrifice wheat cartel to spruce up his Teflon coat

AUSTRALIA'S JOHN HOWARD, alias the Teflon prime minister, has been frantically trying to flick wheat chaff off his famously scandal-proof official suit since a United Nations report implicated his government in the Iraqi oil-for-food bribery mess.

To recap, an investigation by former US Federal Reserve chairman Paul Volcker in early December had unearthed evidence linking the Australian Wheat Board (AWB), the country's wheat monopoly, to more than US$200 million in illegal kickbacks to Saddam Hussein's government in exchange for US$2.3 billion of wheat sales to Iraq between 1999 and 2003.

A royal commission has since been formed in Australia to investigate the extent of government involvement in the corruption scandal. Preliminary findings indicate that Canberra's highest officials knew about the bribery, although Mr Howard and Foreign Minister Alexander Downer have both denied knowledge of AWB's shameful activities in Iraq.

In a normal world, the scandal - which has prompted the AWB's top executives to resign - should have led to the company's demise, with a morally aware and pro-free market government removing its monopolistic powers, thereby nullifying its very raison d'etre. In fact, the scandal has so far erased about 40 per cent of AWB's market value since early December.

But, in a tragic affirmation of the mesmerising powers of monopolies and the culture of dependency that they engender, Australia's wheat farmers have called for the retention of the 80-year-old company's exclusive right to buy and sell the country's wheat output.

The AWB's defenders say a so-called single trading desk is needed to protect wheat farmers Down Under from under-pricing by their continental American and eastern European counterparts, whom the Australians accuse of receiving generous state subsidies.