MERINO EXPORT EMBARGO

Press, Volume LXXXVI, Issue 26123, 27 May 1950, Page 5

MERINO EXPORT EMBARGO

CRITICISM IN AUSTRALIA “ HAS OUTLIVED ITS USEFULNESS” Criticism of the continuation of the Australian embargo on the export of Merino sheep is contained in the latest issue of the “Pastoral Review.” The Review says: “A dispassionate survey with regard to the Merino export embargo gives the impression that it has outlived its usefulness or failed in its purpose, which makes it the more difficult to understand why any body of woolgrowers should oppose its abolition and why the Government of New Zealand has now entered into an agreement with the Australian Government to close any possible loopholes by prohibiting the export qf Merino sheep from New Zealand.

“There are, or were, only two reasons for the imposition of the embargo. Ostensibly it was designed to protect the Australian Merino wool-growing industry against competition from other countries, mainly South Africa and the Americas. The other reason, which was not so publicised, was that it was believed it would ensure Australian woolgrowers being able to purchase their flock ram requirements at a lower figure than would be the case if overseas buyers had unrestricted access to Australian ram supplies. “So far as the former of these reasons is concerned, it is clear from a study of the course of world wool prices from 1929 onward until the outbreak of World War II that the embargo did nothing to protect Australian growers against low values. For the 13 years prior to 1929 (pre-em-bargo period), the Australian clip realised between £l6 11s and £35 a bale, and in only two years (1920-21 and 1921-22) was the price under £2O a bale. During the following 10 years (embargo era) until 1939-40, when the clip was purchased by the British Government and the war appraisement period started, the per bale price ranged between £lO 18s and £2O 14s, and in only two years (1933-34 and 1936-37) did it exceed £2O a bale.

“The embargo, therefore, can in no sense be regarded as having benefited the Australian Merino woolgrower through cutting off supplies to competitive growers in other countries. With regard to the other angle, flock rams are admittedly available to buyers at very reasonable prices, but there is no ground whatever for ascribing that fact to the existence of the embargo.

“The need to-day is not to try to establish Australia in a more or less monopolistic position as a supplier of good quality Merino wool, but to strengthen the position of Merino wool itself in relation to competitive fibres by increasing the output to an extent sufficient to more nearly satisfy the world’s ever-increasing requirements. Quite apart from any question of the injustice inherent in the discrimination to which the stud breeding section of the Merino woolgrowing industry is subjected by the embargo, its abolition should be a first step in a campaign designed to provide consumers with more and better wool.”

The New Zealand Government was more or less forced into the agreement to “close any loopholes.” Had it not agreed, the embargo might have been extended to this country, with possibly unfortunate ultimate results to our important Merino industry.