Should grain be boosted?

Press, 18 June 1976, Page 9

Should grain be boosted?

Last week-end the director of the Crop Research Division of the Department of Scientific and Industrial Research. Dr H. C. Smith, in a statement, urged a major expansion in grain production in Zealand. He suggested that New Zealand had an obligation to do what it could to increase grain production for export in the light of the critical world grain supply situation and the possibility that the world’s population might exceed the world’s capacity to produce food. This could be done, he claimed, without reducing animal production, and might even be accompanied by an increase in livestock production. Dr Smith’s proposal has won some support and has

also been treated with some reservations.

Professor B. J. Ross, professor of agricultural economics at Lincoln College, said he was rather doubtful about the concept of growing food for the world. The European Economic Community, when it accumulated great surpluses, contended that in some obscure way these were helping the needy. He did not go along with this. If countries like Bangladesh and India were to be well fed in the future they must largely feed themselves, as they had done in the past, and could best be helped in raising their own

production and raising their incomes so that they would be able to afford to buy what they required on world markets. In relation to total food’ supplies the amount of food in world trade was relatively small. But this was not to say that there would not be worthwhile markets for New Zealand in a whole variety of crop products, and these should bei explored on a commercial 1 basis rather than from a i moral point of view. This I was particularly the case when New Zealand had the | balance of payments deficit I that it had at the present 1 time. There had been a lot of criticism in the Northern Hemisphere about the amount of grains that affluent countries bought and fed to livestock for meat. The argument was that less of this should be done to leave more grain for countries that were short of it. If that was the case, then countries like New Zealand which could produce meat from grass could, perhaps, help the world grain supply situation more by producing meat to their utmost than by trying to produce grain themselves. If there were world markets for grain then New Zealand should be conscious of availing itself of them, said Mr B. J. P. Ryde, senior lecturer in farm management at Lincoln College. But world markets fluctuated and the question arose as to whether this country was geared to store grain when a surplus situation developed. The answer was of course at this stage New Zealand was not. On the other hand Australia had lower cost storage available for holding grain. In New Zealand a fair amount of capital would be involved in storage, but he did not think that its cost should have to be borne by the farmer. On the question of raising grain production while at the same time maintaining or increasing production from animals, Mr Ryde said that this would involve incorporation of growing spring wheat into the system. There was an opportunity for this in a favourable spring season like that last year, but there would

be other seasons when spring wheat in Canterbury in particular could suffer, so that farmers might decide that yields from spring wheat were such that sheep farming was a better enterprise. But this would be the only way of growing a greater area of grain and still maintaining stock numbers. An alternative, of course, was that farmers might reduce stock numbers and go for more grain growing if there were good markets and it was remunerative

enough. It was a matter of relative returns from stock and grains, on areas other than those which could be irrigated. Mr J. G. Pryde, research fellow in agricultural policy at Lincoln College, favours leaving the farmer to make up his mind whether he should embark on grain growing, but with certain provisos. He believes that there must be some more satisfactory price fixing system. And he believes that there should be another look at a contract growing system. Farmers should be given the price as much as two seasons ahead, he believes. Jms should be some sort or minimum price. They wanted some assurance ahead. Il there was to be stability in the meat and wool fields then some sort of similar arrangement had to be offered in complementary areas or there would be a risk of distortion. But he believes that any price should be related to ruling market rates.

Mr Pryde thinks that there is a need for looking at the cereal industry generally, including wheat, barley, oats and maize. He says he would like to see a much better documented industry. He believed that there was an abysmal lack of data about the industry. Thus when a drought situation developed it was not known where stocks were. Ignorance to his mind was not a good thing, although there were some who believed that keeping people guessing could be advantageous.

The chairman of the Dominion agriculture section of Federated Farmers, Mr A. L. Mulholland, said he would go along with virtually all that Dr Smith had said. Whereas markets for meat were limited, Mr Mulholland said that grain could be sold to most countries, but by tne same token the competition was much more intense in the grain trade. However, there was always a place for the small quantities of exportable grain that New Zealand would produce, in particularly the East. Mr Mulholland said that grain could be stored for less cost — once silos had been erected the cost was minimal — and no refrigerated vessels were needed tor tne transport of grain. Mr R. L. G. Talbot, M.P. for South Canterbury, said he believed that a stop needed to be put to the story that had been put across in the past that New Zealand should preferably export meat and wool and import grain. While New Zealand did not have enough arable land to support a large grain industry, he believed that it need not be too concerned about building up surpluses, for there would be at least a 50-50 chance of breaking even in disposing of them and even of making a profit. Dr Smith, who suggested that a major expansion of grain growing in New Zealand would require a Gove r n m e n t-organised food grains production programme and adequate reimbursement for farmers for the extra costs involved, said that there might be a problem with investment in equipment, but he believed that this could be circumnavigated to some degree by farmers using existing plant and machinery to a far greater extent. This could be facilitated by earlier harvesting and using drying equipment for grain and also storage to the maximum. He said that utilisation of existing plant and equipment could be doubled. There would also be a spin off for industries servicing the farming industry, such as transport, he said.