CONSUMER PAYS

Evening Post, Volume CXXVI, Issue 132, 1 December 1938, Page 12

CONSUMER PAYS

' HELPING THE FARMER

THE WORLD'S WHEAT

■ i EMBARRASSING ABUNDANCE

"Evening Post," December 1. Recent estimates of^ the Canadian Ministry of Trade put* the world's - wheat production at 4,227,000,000 . bushels against 3,826,000,000 bushels last year. Productions of Soviet Russia and China are not included in the estimate. The consumer is not.to benefit by this generous production. The market view of the situation is that wheat is much in excess of demand and that its price must be adjusted accordingi ly. How SUch adjustments are made is beyond the-understanding of the vast- , majority of consumers. All they know is that th^ey usually derive little or ,■;' no benefit at. all from a superabundance of any; primary commodity and^ that they inevitably have -to pay more for wheat, bread, butter, or any other necessary' commodity in times of scarcity, that or go without. Between producer and consumer is a great gulf, but, theoretically, the mute and hungry consumer should have the last word in deciding whether supply is in excess of demand. Certainly the Australian bread consumer will have to pay more for bread and flour because of a scant harvest in Australia, and that at a time when the wheat market, as a whole, is at a very low level because of general overproduction, or superabundance. CALAMITOUS PLENTY, Simple people with no knowledge of economics, marketing, finance, or politics may find it hard to belieye that a generous provision of food in the world is recorded—by the seller — as a calamity and that famine in some wheat districts of Australia is also regarded as a calamity. But there it is. - Canada,, the United States, and Argentina have had splendid harvests. But when their producers look at the mar-~ ket and the market at them, it is in no spirit of joy, much less of thankfulness, 1 because of plenty. ■ ; Australia's wheat crop is estimated to be nearly 60,000,000 bushels down on ' that of last year.- Its domestic requirements are 30,000,000 bushels. The balance of the wheat is exported in tile grain or in the form of flour. Wheat and flour are second only to wool oh - the list of exports in value. Many Australian wheat growers have been Kit and that-hard, both back and front —little or no wheat and a dressed market. How wheat can fall, in price is illustrated by a quotation in July last of 4s 8d per cental in Liverpool, against 8s 3d a year ago. Today (November 25) wheat is selling in .'Sydney at'2s 7d per bushel, and old wheat at 2s 4fd. Bagged wheat was quoted at 2s Bd. ' In Canada the low price of wheat was met by a guarantee of eighty cents a bushel; in the United States the Adz: - , ministration' undertook; to carry a loss of eleven cents a bushel on exports of 100,000,000 bushels in excess of domestic requirements. Canadians did not wholly approve Government action, . because Ontario is not directly inter-1 :' ested in the wheat industry and {' Quebec is—well, Quebec. The United s States ruffled' Argentine -susceptibilil" ties because of an attempt to exchange 1 :.■, 15,000,000 bushels of wheat for its *' ■ value in coffee in Brazil, a country which is a valued customer for Argentine ' wheat. However, tJiis. matter was adjusted. ";; ; ; ..'-"'I "DOMESTIC PRICE" POLICY. - The Australian and *\New Zealand Governments favour what is called a "domestic price" policy, that, is, to, charge their own consumers more for \ produce than it is worth for .export. That is done in Australia in respect to Australian butter and cheese, dried fruits, wines, and wheat and flour. New Zealand has its; wheat policy on much the same lines and now applied ■ to butter. But the New, Zealand domestic 1-wheat price policy is a story in itself. New Zealand, however, is j interested indirectly in Australian wheat. In normal times wheat is sec- , . ond on the list of Australia's exports in point of value. Therefore it is a pro- . . ducer of wealth from without. Aus- •; - tralia's general economic position must j ' *-. suffer through a diminished wheat i harvest, with a price of 2s 7d a bushel / against .at least 4s to pay costs of production. Therefore, that* will not -be i so much money in the Australian banks. ' on current account, and the value of s stocks, and shares may be affected. New Zealand is now a relatively large hold/.er of Australian investments, ' How the Australian wheat groweriis to be assisted in meeting the adverse conditions of the moment is not by increasing local consumption, but, possibly, by checking it and most surely increasing the cost of living. An excise duty of £12 10s, but not more than £13, is to be collected on all flour, milled from Australian grown and milled wheat for Australian consumption A sum of £500,000 is to ,be taken : from the yield of this duty—which may • •= amount to £4,ooo,ooo—and distributed ■ among necessitous growers; and the price of bread fixed at Is for/the four- . pound loaf in the capital cities. In short, while the world is "blessed with a superabundance of wheat consumers in Australia are to be taxed on both bread and flour because Australian wheat growers have had a poor harvest, and because heavy crops where have depressed the price to 2s; 7d per bushel. In this curious wheat:! N situation the people above re- j ferred to have something difficult, to ponder over and try to understand.