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.