The Press Friday, March 17, 1933. Wheat Restriction.

Press, Volume LXIX, Issue 20807, 17 March 1933, Page 10

The Press Friday, March 17, 1933. Wheat Restriction.

The announcement in this morning's cablegrams that the United Slates Government is "seeking an agreement with '•' Canada, Australia, Argentina, Russia, " and the Balkans to limit the produc"tion of wheat" gives the wrong impression that the United States Government has taken the lead in this matter. Actually, the Canadian Government made a strong appeal early this year i'or " international action to rehabilitate the wheat industry''; and a meeting of Australian wheat growers' organisations in Melbourne a few weeks ago passed a resolution urging the Australian Government to arrange a conference on wheat production and marketing with the Governments of the United States, Canada, and Argentina. The Government of Argentina has also indicated that it is anxious to discuss the possibility of curtailing wheat production artificially. Less is known about the attitude of Russia and the Balkan countries. The situation which has created this widespread demand for restriction can be very briefly described. In 1928-29 the average price of wheat in Winnipeg was 124 cents a bushel; at the end of 1932 it was 46 cents and world stocks of wheat were estimated at 250,000,000 quintals, the highest figure in history. At present, despite lower production costs and government subsidies, less than half the wheat farmers in the world are operating at a profit. For two reasons wheat prices have fallen more steeply than the prices of other primary products. One is the revolui tion in farming technique, particularly in the United States and Canada. Improved reaping- and sowing machinery, the breeding of new wheats to resist drought or to mature quickly in regions liable to early frostg, and more scientific fertilisation, have resulted in a heavily increased output. The following table gives some idea of the magnitude of the change: WHEAT EXPORTS, PRE-WAR AND PQOT-WAIt. Quintals (QOO's). Annual av., AnmiaJ av., 1909-1913. 10264930. Canada ... 30,152 70,051 Argentina ... 24,304 40,764 U.S.A. ... 14,296 27,334 Australia ... 11,430 17,459 The other special reason for the decline in wheat prices has been the restoration, since 1925, of European and Russian production, the cassation of which was largely responsible for the extraordinarily rapid expansion of the wheat industry in America nnd Australia during and after the War. Yet it is difficult to accept um-cservedly the conclusion that artificially restricted production is the best remedy for the wheat industry's ills. There is still an immense potential unsatisfied demand for wheat; arid even a slight revival of! purchasing power will make part of that demand effective. The Far East, in particular, has greatly increased its wheat consumption in the last few years. In .1930-31, for instance, more than half of Australia's wheat exports went to China and Japan; and it seems a pity to compromise the possibility of developing this market by agreeing to a restriction of output. Moreover, there are signs that the slump in wheat has passed 'its worst phase. World stocks have decreased appreciably in the last few months, while since the new year prices have shown a slight upward tendency. i