PRODUCE & MARKET REPORTS FROM DAY TO DAY

Evening Post, Volume CXIX, Issue 30, 5 February 1935, Page 12

PRODUCE & MARKET REPORTS FROM DAY TO DAY

*; PRICE OF FLOUR

STABILISATION PLAN

OF WHEAT BOUNTY

Details of a wheat stabilisation plan, proposed in Australia, are published hi the-latest Australian files to hand. The "Syduey Morning Herald" states that the Federal Ministry is anxious to complete legislation for the permanent stabilisation of the wheat industry before the Prime Minister (Mr. Lyons) leaves for Britain, so that the legislation may be introduced the House of Representatives in March. A plan involving the combination of features of the Federal butter stabilisa-•r-tion plan, with the annual payment of a v^wheat bounty, has been prepared. It is 1 regarded by several Ministers as the most * practicable available. Although the Cab- * met will not confirm any policy for the . stabilisation of the wheat industry Until j after the final report 'of the Royal Com2,_mission on bread is received, it is likely .the plan already prepared will be J-adoptea. j The plan involves the fixing of a home » consumption price of flour, which, while J the world price of wheat remains dey pressed, would be substantially above the ? flour price which would correspond with £ the world parity price of wheat. The pro- '«' posal follows that made by the Royal ■ Commission on wheat, but it is proposed J that the price of flour for home consump- . tion would berfixed by State boards simit lar to those, established to regulate other J primary industries, whose products are < marketed under an equalisation price. The J State boards would fix the selling price j for flour, and the difference between the i actual cost of flour production plus millers' £ profits and the selling price thus fixed * would be paid to the boards. 1 To ensure that all growers share in fair »: proportions the benefits of the home con- * sumption price of flour, it is proposed that i'the money yielded to each State board .» by this price should be paid into a fund by a. central committee,, and *>that. it should be distributed after each »■ harvest in the form of a bounty on some * basis determined by the central committ tee. ■J Advantages claimed for the plan are 2 that it would remove the business of regu- * lating the wheat bounty from politics, and, j at the same time,, relieve the Federal J Treasury of the heavy annual burden im- *. posed on it in the last few years by the jt need for providing a wheat bounty. The , price of flour would be almost completely ; stabilised, as it would be fixed by the ; State boards at a level sufficient to re- •; turn growers a reasonabe income. For . this reason the amount of the annual * bounty would vary in inverse proportion' T- to the world parity price of wheat, de- " creasing as the price of wheat rose and in- • creasing as the price fell. J So that the plan might be. put into operf. ation, the concurrence pi the States would i be needed to pas's complementary legislai\ tion . similar to that passed for the conJ: trol of the marketing of dried fruit and • dairy produce. One objection to the plan I is a doubt whether a sufficiently large • bounty could be provided automatically .'each year without inflating the price of X flour considerably above the present level, ; and thus increasing the cost of bread.