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Australia says drought aid does not impact trade deals

By Will Ziebell

MELBOURNE, Sept 29 (Reuters) - The Australian government said on Sunday its financial assistance to drought-affected farmers did not contravene the country's free-trade agreements.

Prime Minister Scott Morrison said on Friday an additional A$100 million ($68 million) would be made available for drought-striken farmers, with lower eligibility standards so more could access the previously committed A$7 billion in aid.

Agriculture Minister Bridget McKenzie said the support was not a farm subsidy that could jeopardise Australia's obligations under its free-trade agreements.

"As an exporter of 70% of what we produce, we don't want to be doing anything here at home that puts at risk our ability to trade," McKenzie told Sky News.

Parts of Australia's east coast are suffering under the worst drought in living memory and the weather bureau has forecast another three months of dry weather.

Australia's east coast accounts for close to a third of its wheat output, and the grain is the country's largest and most lucrative rural crop.

Australia is among the world's top 10 exporters of wheat, typically contributing about 2% to GDP. ($1 = 1.4782 Australian dollars) (Reporting by Will Ziebell; Editing by Stephen Coates)

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