WHEAT PROBLEMS

Evening Post, Volume CXI, Issue 107, 6 May 1926, Page 10

WHEAT PROBLEMS

POSITION IN NEW ZEALAND

DISCUSSED BY PROFESSORS OF

ECONOMICS

The problems incidental to the subsidising ol the wheat-producing industry in New Zealand by import duties on wheat, and the effect of such duties on the wheat producer, the farmers generally, and the consumer are considered by Professor B. E. Murphy (Victoria College) and Professor J. B. Condliffe (Canterbury College), in reports furnished by request to the Executive of the New Zealand Farmers' Union. "Our population," says Professor Murphy, "is email and produces a surplus of exportable food. Even if we were cut off we could feed ourselves, and at the next season produce wheat enough. Wheat is a crop that readily responds, given the inducement, to enlarged demand, at a price. If England, with nearly fifty million people, can pursue the policy of import from abroad, we can surely adopt the same policy ourselves. "There is likewise no warrant for the assumption that as world supplies of wheat are diminishing relatively to demand, we shall have to produce our »wn or go without. The progress of farming technique is all the time winning new wheat areas, and whatever may happen in the remote future there is at present no prospect of a world shortage of a permanent nature. Wheat is produced all the time in large quantities in some parts of the world, and can be quickly increased in amount in response to favourable market indications. BUY IN CHEAPEST MARKET. "There is no statistical warrant for the fear that world supplies-aTe, or are likely to be, insufficient. The whole world, in present conditions of rapid and cheap. transport, is one market for wheat, and cargoes can be diverted to profitable points almost instantaneously. There is no instance of a wheat | famine in modern times among Western nations. A shortage shows itself in a somewhat higher world price, and the deficit is distributed, like an insurance premium, over world consumers in the form of somewhat higher prices. The duty policy simply says that in order to guard ourselves against possible high prices in the future we should now make our prices permanontly higher by artificial means. "I conclude, therefore, that there is no cogency in the war isolation argument, or the world shortage argument, and that in the circumstances there is no reason why we should not buy our wheat in the cheapest market. The food supplies of our people should not be tampered with in the absence of the most cogent proof of over-riding public interest." In his article Prof<»ssor Condliffe discusses the problem as follows: —"It is to be remembered that the population of New Zealand is increasing at the cumulative rate of •12 per cent, every five years. The mean population of the Dominion for the year 1925 (exclusive of the Cook Islands and Samoa) was approximately 1,368,000 people. The production necessary to give the prewar equivalent of 6.4 bushels per head was, therefore, approximately 8| million bushels in 1925. In 1930 the consumption will be approximately 10 million bushels, and in 1940 12i million bushels. "The highest production so far recorded was 13 million bushels in 1900. There is, therefore, no ground for doubting that, given sufficient economic inducement, the Dominion can ( quite well produce enough wheat for its own needs. Strictly speaking, since the bulk of the wheat lands are in Canterbury, this means that, if economic adjustment be secured, the present tendency for the agriculturists of the South Island to produce the cereals for the whole Dominion is likely to be accentuated in the immediate- future. . . . NEW ZEALAND SHOULD GROW BULK OF WHEAT. "I would place second in importance," proceeds Professor Condliffe, "among the reasons for tho recent shortage of wheat production, the uncertainty of market conditions caused by Government interference ■ and control. The successive changes in policy, necessarily dictated mainly by political reasons, have taken from the farmer the benefit of the good prices in lean years while exposing him to the lower prices ruling in years of greater production. The uncertainty of the conditions under whicti the marketing of wheat would be carried out over a series of years has been, in my opinion, one of the worst examples possible of the effect of governmental interference in industry." Professor Condliffe goes on to declare that from his analysis three conclusions are justified:— (a) Tho Dominion should continue to produce the bulk of wheat required for consumption here. (b) It is not unreasonable to expect that the wheat growers will be able, given stable conditions, to produce a sufficient quantify at prices* considerably lower than those ruling at present. (c) The present position is, however, highly unstable and likely to perpetuate the recent successions of high and low prices, shortage, and over-produc-tion. If this goes on, the inevitable result will be a steady diminution of production in the average of good years and bad." Professor Condliffe suggests for the consideration of the executive of the Farmers' Union the legislation already on the Statute Book in tho Board of Trade Act, 1919, -which gives the widest possible powers of investigation, publicity, and even control of industry to the Board of Trade.