AUSTRALIAN WHEAT SURPLUSES

Press, Volume LXXVII, Issue 23361, 21 June 1941, Page 6

AUSTRALIAN WHEAT SURPLUSES

AMERICA’S QUOTA SCHEME

“BOTTOM IN THE MARKET”

The wheat exporting countries are sorely puzzled as to the best method of controlling wheat production to usable quantities. The United States has broken new ground in the matter, adopting a plan last month of market* ing quotas. The growers have, voted overwhelmingly in favour Of restricting the amount that may be marketed from this year's crop. The scheme is as follows: ' , , ~ . Under the American Agricultural Adjustment Act a national acreage allotment is proclaimed and apportioned between states, counties, and farms. The acreage chosen is that which, on average yield ah acre, will, together with carryover stocks, produce a supply equal *to normal home consumption needs, plus normal exports, plus a security surplus or reserve for an “ever-normal granary" of 30 per cent, of combined local and export needs. If subsequently,’ it appears that supplies will exceed this figure, due to above-average yields or below-average exports or local use, restriction is placed on the amount of wheat which may be marketed, provided that growers agree to this national marketing quota by a two-thirds majority in a referendum. The national marketing quota as a percentage of estimated total yield gives the percentage of the acreage allotment from which wheat may be marketed. Thus, a farmer may have received an acreage allotment of 150 acres, whiph will be cut for marketing purposes by 30 acres if the marketing quota determined is 80 per cent. This is the first occasion in .which the wheat industry has. resorted to marketing quotas. , ... .. There is no guaranteed price in the United States, in the sense that this is true in Australia or Canada; The crop is not purchased by the Government, and sales are made through the grain trade. However, the United States does offer a loan against wheat for sale. Wheat pledged may be sold by the grower and the loan redeemed, or the loan may be called up by the government, if prices are above the loan rate, and the wheat sold to coyer the loan. The fact that ready money is available by’ loan means that sales will not be made below the loan'rate, and so the loan rate “puts a bottom in the market.” The government is authorised to fix a loan rate of up to 85 per cent, of the income parity price, This latter is the price which it is assumed will give producers an income comparable to the incomes of other sections of the community, 'using the period 1909-14 as the basis for comparison.

The Omihi branch of the Farmers’ Union is holding an inspection day on Monday, June 23, of the nassella tussock'areas in the Waipara districts, commencing at 1.30 from the Waipara Hotel corner. Dr. H. H. Allan, the Government officer conducting the survey, which will be completed by Monday, will give an address on the subject.