Mr Howard faced just under an hour of questioning about his knowledge of alleged AWB payments to the former Iraqi regime despite United Nations sanctions at the inquiry headed by former judge Terence Cole, amid tight security in front of a packed public gallery.
Mr Howard was questioned by counsel assisting the inquiry, John Agius SC, about a series of cables sent to the government as far back as 2000 with warnings that Saddam's regime was rorting the UN oil-for-food program, some of them warning that AWB may have been paying kickbacks to the Iraqis.
"I believe that I did not receive or read any of the relevant cables at any time during the relevant period," Mr Howard said in a statement to the inquiry.
"I believe that the contents of the relevant cables were not brought to my attention at any time during the relevant period."
He told the inquiry his staff did not make him aware of the cables and intelligence reports, as they did not think the allegations had any basis.
He later attacked the federal opposition for criticising the Cole inquiry's terms of reference.
"It's very simple," he said in a press conference a few hours after his inquiry appearance.
"When you've got a prime minister and two senior ministers fronting a commission on oath and answering questions, you can hardly suggest that the government is hiding something or covering up something."
Mr Howard added that Commissioner Terence Cole has the power to make findings of fact against government ministers.
Howard's "neglect": opposition
Mr Howard also told the inquiry he did not see another cable sent in June 2003 warning the Coalition Provisional Authority in Iraq believed all contracts between Saddam's government and companies involved in the UN's oil-for-food program contained kickbacks of between 10 and 19 percent.
The prime minister agreed with Mr Agius that the warning in the cable was "a very bald statement" but he would not have expected his advisors to have showed it to him.
The cable was sent just three months after allied forces invaded Iraq, sparking the fall of Saddam's regime.
"The issue of whether the former regime had been corrupt and corrupted programs was not contentious to me," Mr Howard said. "It was accepted that it had.
"I can only repeat that I don't necessarily dispute (his advisor's) judgement in not bringing it to my attention particularly because the cable describes a mechanism whereby the issue was to be resolved."
Opposition leader Kim Beazley accused Mr Howard of being guilty of neglect.
"For the prime minister not to be receiving information on that -- all you can say was that a deliberate blind eye has been turned here and culpable neglect is what the prime minister here is guilty of," Mr Beazley said in Perth.
"This is a shocking national security failure ... the prime minister is at the heart of this and his two ministers, what a pair of clowns ... the buck's ended up with Saddam Hussein but the policy buck stops with John Howard," he said.
Press club speech
The inquiry was told details of how Mr Howard gave a speech to the National Press Club in March 2003, the month the allied forces invaded Iraq.
In the speech he condemned Saddam's government for rorting the UN's oil-for-food program, in which AWB was the biggest provider of humanitarian food aid.
Mr Agius asked Mr Howard when he first believed the Iraqi dictator's government had been rorting the program.
"It would be well before that," Mr Howard replied.
"Probably a year or more that I would have had that belief."
Mr Agius: "In that connection did you ever have any suspicion that any Australian company including AWB, one of the largest exporters to Iraq, might have been involved in that rorting?"
Mr Howard: "No I didn't. I'd never been presented with any hard evidence. I guess I was conscious only of AWB because of the predominant role of AWB in the wheat trade and I had always believed the best of that company as had most people in the government."
Commissioner Terence Cole refused to allow lawyers acting for AWB executives to cross-examine the prime minister, saying that the issues had already been addressed by Mr Agius.
"I do not believe any further cross-examination would assist this inquiry," Mr Cole said.
Protesters outside
Waving and smiling, Mr Howard strode confidently into the building housing the inquiry.
Mr Howard also told the inquiry he was not shown a batch of unassessed intelligence material concerning rorts of the UN oil-for-food program, saying it was rare for such intelligence to be shown to him.
Police arrested a male protester who tried to enter the building straight after Mr Howard, and the man has since been charged.
A handful of protesters chanting "John Howard is a liar" and holding placards saying: `John Howard War Criminal' and ‘Troops out now’ demonstrated outside the Cole commission.
A UN-backed report last year said AWB paid A$300 million in bribes to obtain A$2.3 billion in contracts from Baghdad, in breach of sanctions against the former dictator's regime.
The commissioner, former judge Terence Cole, has heard evidence since the inquiry opened in January that the government was warned repeatedly that AWB was paying bribes to Baghdad.
Wheat is Australia's second biggest rural export, with annual sales around A$3 billion.