Wheat industry power struggle

Press, 22 June 1984, Page 23

Wheat industry power struggle

The fundamental issue in the present review of the wheat industry is the power of the Watties-Goodman group, according to the Wheatgrowers’ subsection of Federated Farmers. A reconstituted Wheat Board wo"ld be an effective counter to that commercial power, the subsection has said in its submission to the Wheat Board on the report of Government officials on the wheat industry. This board should consist of six grower-members and two appointed by the Government, one with financial expertise and the other with marketing expertise.

The submission was discussed in draft form by the Dominion Agriculture section conference in Wellington this week.

Wheatgrowers are not satisfied that the Commerce Act can protect against monopolistic manipulation of the milling and baking industries at the expense of both the producer and end consumer.

Watties-Goodman had grown to a position where it controlled more than 60 per cent of milling and baking under a system which ensured its mills complete cost recovery in the treatment of board-owned wheat, said Mr B. McLauchlan, of Mid-Canterbury. Now it wanted the rules

governing the industry changed so they could penetrate even further, he said.

The Wheatgrowers’ submission said that the producers board should have control of all domestic and imported wheat. Among the other functions of the board would be:

© The right to set prices, premiums, discounts and pools.

• To approve and su-

pervise contracts with mills for premium, specialty and feed wheats.

• The right to negotiate freight rates and determine cross subsidisations or regional pricing differentials. • To administer a prepayment scheme. • To have the authority to “do all things to ensure the marketing of New Zealand wheat” within the cons-

traints that it needs to be competitive with imports of

Australian wheat and flour in both price and quality. Two North Canterbury

delegates to the conference, Messrs George Hutton and Norman Hewitt, expressed reservations about pushing for a wheat producers’ board as proposed. They though there was considerable value in retaining the present mix of representation on the board.

The junior vice-president of the Dominion section, Mr

Stuart Collie, said the officials’ review was treating the wheat industry uniquely, by suggesting regional differential pricing. “We can transport grain anywhere else in the world cheaper than we can to the North Island. I have asked Government why we can’t use international shipping? “They reply that the ‘unions have got you there’. “They certainly seem to have,” said Mr Collie.