AUSTRALIAN GOVERNMENT TO PAY SUBSIDIES--USDA

  The Australian Government will likely
  reimburse the Australian Wheat Board, AWB, about 132 mln (U.S.)
  dlrs to pay wheat farmers for their 1986/87 crop, the U.S.
  Agriculture Department said.
      In its report on Export Markets for U.S. Grains, the
  department said the sharp fall in world wheat prices has
  reduced the export sales revenue of the AWB to levels
  insufficient to cover its breakeven export price estimated at
  around 98 dlrs per tonne.
       For example the recent large sales of wheat to China (1.5
  mln tonnes) and Egypt (2.0 mln tonnes) were well below the
  breakeven export price, it said.
      Australian wheat farmers normally receive an advance
  payment known as the Guaranteed Minimum Price, GMP, calculated
  at 90 pct of the average of estimated returns in the current
  year and the two lowest of the previous three years, the
  department said.
      In addition, deductions for taxes, freight, handling and
  storage are deducted from the GMP the farmer receives.
      But the department said the Australian Bureau of
  Agricultural Economics, BAE, predicts wheat production will
  drop sharply from 17.8 mln tonnes in 1986/87 to 13.5 mln in
  1989/90.
      The decline will result from low world grain prices leading
  to shifts to livestock and other crops which could benefit U.S.
  wheat exports, the department said.
  

