PRICE OF THE LOAF

Evening Post, Volume CXI, Issue 36, 11 February 1926, Page 7

PRICE OF THE LOAF

1 ♦—- I LABOUR AND WHEAT I A REVIEW AND REMEDY ! OFFICIAL PABTY STATEMENT. The following statement by the National Executive of the New Zealand Labour Party on the wheat question has been handed to the Press by Mr. Walter Nash, national secretary: — On 19th May last the Minister of Agriculture (the Hon. W. Nosworthy) announced that the Cabinet had ratified the proposals agreed upon at the recent conference between the wheat growers and millers. The details of the proposals and the conditions laid down by the Government when ratifying them weje as follow:—The millers were to pay for aU^wheat sown in 1325 and harvestad in 1925-26 at the following f.o.b. rates: —Tuscan, 6s 5d per bushel; Hunters, 6s 7d per bushel; Velvet, 6s 9d per bushel. Any surplus offered over milling requirements was also to be purchased by .the millers ' at the above prices. Flour was to remain at £18 per ton. Bran and pollard to be reduced to £7 and £8 per ton respectively, all prices f.oj). South Island main points—Lyttelton, Timaru, and Oamaru. The following conditions were also laid down by the Minister: —(1) The wheat growers were to sow an area of wheat calculated to provide for the whole of the Dominion's requirements; (2) The duty on wheat would remain ai at present, and importation -would not be interfered with. (3) If necessary to protect the millera' in 1926, an embargo would be placed on the importation of flour. (4) The price of bread was not to be increased. In conclusion, the Minister stated that if the necessary wheat was grown in the Dominion no hardship would be imposed on the country by the embargo on flour, and he had every confidence that the wheat growers would respond to the •ffer of the Government and make New Zealand independent of 1 outside sources for one of its moat important foodstuffs. . PRODUCTION FALLS SHORT. The foundation of the guaranteed price was the condition that a sufficient area should be sown to meet the Dominion requirements of 8,000,000 bushels. Taking the average yield at 30 buehels per acre, this meant that at least 266,000 acres would have to be •own. Instead of sowing this area* the growers broke both the spirit and the letter of the agreement by sowing 160,000 acres only, the result being that the Dominion is faced with a shortage of between three and/ four million bushels. ■■'.■".'■■.'.;'■■■•' ; • With knowledge of the Dominion shortage, and a short crop in 'Australia, the wheat growers demanded that, either - the period of the guarantee should, be extended or, alternatively, they should be released from the May agreement, and be given a free market to dispose of their wheat at the best price obtainable. DEMAND FOR A FREE MARKET. The wheat growers seized the opportunity of pressing their demands when the new Minister of Agriculture was appointed. They also got the ear of the Prime Minister. Neither of these Ministers is so well informed of the position as the late Minister of Agriculture. The May agreement»i« abrogated, and the demand of the wheat growers for a free market is granted. A free market with four to five million bushels of wheat to satisfy a demand for eight millions bushels! To ensure the fullest freedom in their free market, the wheat growers asked that a duty of Is 3d per bushel shall be placed on imported wheat. At this point the millers come in again. ,On 3rd February Mr. Corson, president of the Flour Millers' Association, set out new proposals whereby control is to be' resumed, and the following prices paid to the wheat grower: s. d. Tuscan .._.,, 7 2 Hunters .....—.. 7 4 ; Pearl . 7 6 tie Government to import the balance of the wheat required free of duty and distribute at above prices. An embargo to be placed on the importation of flour. The millers to raka the priee^ of flour by £2 10s per ton. Bread to be increased by Id per 41b loaf. (The price of bran, pollard, eta., is not mentioned in the report of the proposals.) COMMENTS OF THE CHIEF 1 .-. JUSTICE. To understand the flour position it is accessary to refer to the comments of the Chief Justice when delivering judgment in the xeeent flour milling case. He stated:— > (a) That there ia no free competition in the production or sale of flour ia New Zealand. (b) That Australia pays £10 to £18 per ton again the New Zealand price of £18 per ton. («) That the Australian price was 50 per cent, lower in spite of the fact that the yield of wheat per acre in Australia teon^r abovt 10 to 12 bushels per aer?, whereas in New Zealand the average >ield is etosw to 30 bushels per acre. (d) That it was not possible to set the price lowered here without the consent of Distributors Ltd., because there Is no competition. "THE CONSUMER PATS." There have apparently been several conferences between the wheat growers, the millers, the bakers, and the Government; but the only person who has not been consulted up to the present is the consumer. The wheat grower is to have a free-protected market. The mOler k to operate freely in an em-bargo-prot«ct«d market. The consumer pays. The position is that the millera and tto wheat growers are using their nonopoly pow«r to eoeree the people of the Dominion to pay prices which are not warranted eitner by the service rendered or by tiie legitimate competitive market valne of their products. If a free market for wheat, flour, bran, and flst other by-products is the solntiott of the present .difficulty, let tfcsi market be free. Let wheat, flour, to"*, sad pollard be admitted free of all a«tr <w restrictions of any kind. MTTiTiKRa' PROPOSALS. The proposals set out by Mr. Corson and how they will affect the various users of wheat should be carefully examiaef 1 Information as to the actual qoantit., of wheat used as poultry feed is not available; bot the extra price set out by Mr. Corson would cost the poultry farmers somewhere near £50,-----000 for the year's supply, and on top of this both the dairy farmer and the poultry farmer will have to pay higher prices for bran and pollard. On the basis of 48 bushels of wheat to each ton of flour, 6,720,000 bushels will be required to produce the estijeated Dominion requirements of 140,-----000 tons. - An increase of 9d per bushel in the price of wheat as proposed by 'Mr. Corson will cost the millers £252,000, an increase in price of £2 10s per ton on an output of 140,000 tons of flour will yield the millers £350,000, or a net increased profit of £98,000. Mr. Corson does not suggest that the cost of milling wheat is higher when the price is 7s 4d per bushel than when it is 6s 7d. If the cost is no greater, why should an extra £98,000 be included in the price t "BREAD-COSTS £400,000." Mr, Corson \ proposed to compensate the master baker for the increased charge of £2 10s per too by inereas-

ing, the cost of bread by Id for each 41b loaf. Talcing 680 loaves as the average production from a ton of flour, the increase 6"f Id means an added .charge of £396,666 13s 4d to bread consumers, and the weight of this load is heaviest on those least able to bear it. The increase in the price means that the master bakers get an extra profit of £46,666. The following table summarises the fJTifrTi^.jai transactions: — KEW ZIALAND WHEAT GBOWZES.— Per bush. 1 Average price proposed by Mr. Corson 7/4 Average price agreed In May last between Growers, Millen, and Government .... 6/7 : Increase 9d So that the eitimated yield of 4,000,000 bushels at 9d will gtre the growers I an extra £150,000 ; To complete the quantity re- — I quired for milling purposes it will be necessary to Import from Australia or else- ' where 2,720.000 bushels. : Total required for flour production, 6,720,000 bushels • MHUSR&.— . Proposed adrance on 140,000 tons floor of £2 10s .... 350,000 , Deduct extra cost of 6,720,000 bushels or wheat at 9d ... 252,000 98,000 MASTER T» *gn«s: — ! Proposed increase of Id per | 41b loaf £59«,668 Deduct extra cost of 140,000 tons'of flour at £2 10s per ton _ S50,00« 1 ■ ■ 46,686 £294.666 I ' ' This sets otrt the financial position , as it affects the bread consumer. The i poultry. farmer and the dairy farmer i will have to pay also, and on top of f this the Government is, to distribute > all their purchases from overseas duty.. ■ free on lines similar to those set out by Mr. Corson. The proposals advocated, detailed above, show that in addition to passing on the extra cost of the '"wheat, they 1 provide for an added profit of nearly £100,009 for the millers and £50,000 for the bakers. The foregoing statement of facts sets out a position fraught with grave pos- \ sibilitiea for every^ person in the community. '■■'■(„ THE LABOUR REMEDY. One of the prime essentials for food is wheat, and the past policy of the Government whereby its production within the Dominion has been fostered, provided that the policy is accompanied with provisions that will safeguard the community, is to be commended. The wheat grower should be guaranteed,a ' price that will compensate him for his labour in good or bad seasons. The cost of milling under modern up-to-date ■ conditions should be ascertained and arrangements completed to ensure sup- ] plies of the necessary flour, bran, pollard, etc. The cost of bread manufacture should be ascertained, and the price of bread fixed accordingly. There may be: reasons against the • fixing of prices; but if a full supply of wheat is to be grown within the Do- , minion then the grower is "entitled to 1 some guarantee. If a price is guaranteed for wheat, then prices should be fixed throughout. Price fixing by agreement cannot logically stop, until the wheat, flour, bran, pollard, and bread reaches the poultry farmer, dairy farmer, and the housewife. 1 The Labour Party will support Mr. ' Corson's proposal to set up ah independent commission to inquire into ; ways and means of placing the wheat and milling industries on a permanent basis to ensure the production of our own rtquirethents at legitimate -prices to both prtfdncers and consumers.