The Evening Star SATURDAY, NOVEMBER 2, 1929. WHEAT AND FLOUR.

Evening Star, Issue 20322, 2 November 1929, Page 14

The Evening Star SATURDAY, NOVEMBER 2, 1929. WHEAT AND FLOUR.

The report which a Select Committee after hearing exhaustive evidence, presented to Parliament On the wheat nr l flour industries is at first sight very non-comriiittal. It lays down afresh the axiom that New Zealand should be self-supporting in respect of these foodstuffs, and approves the existing s’iding scale of duties; the only tariff alteration proposed is that millers’ offals (bran and pollard) shall he admitted duty’ free instead of paying Is per cental. Theso are all questions that arc debatable without any undue invasion of certain aspects of trading. There are, however, certain other aspects where the interests of consumers, instead of primary producers, predominate; and on these matters the committee has transferred responsibility to paid servants of the State. The Department of Industries and Commerce is to bo asked to investigate tbe operations of milling and of the baking and distribution of bread. The evidence the committee heard appears to have convinced it that wheat growers are working on fairly right lines, and arc not over-reimbursed for their work and risk; that the millers r. -o either making excessive profits, or allowing avoidable waste, arising from faulty methods, to unduly swell costs of production; and that the bakers, in some centres at any' rate, ore unduly adding to the cost of the loaf

Parliament discussed the report on entirely non-party lines. If there was any line of demarcation at all it was the non-grain-growing North Island versus the grain-growing South Island. But, as the division list shows, there are many North Island members who view wheat growing from a dominion point of view, and appear to be hopeful of some way being found to protect North Island consumers from excessive charges without injuring South Island producers. Incidentally it was mentioned in the debate that wheat was once grown in the North Island but had been given up because it paid better to grow other things. It has sometimes been urged that the graingrowing districts of the South Island should follow suit, and that there would be a balance on the right side after deducting , the cost of wheat or Hour purchases abroad from the receipts from the sale abroad of the other products from former grain-growing areas. It is, however, contended that much of the wheat-growing land would realise less if turned to other uses, and undoubtedly the argument that New Zealand should be self-supporting in the matter of such foodstuffs carries much weight in the North Island as well as the South. Then the cost of the turn over from one form of farming to another has to be considered.

Labour’s formula for live preservation of the wheat industry, together with a cheaper loaf for the masses, is interesting. It is a State subsidy for wheat growers and the nationalisation of the milling industry. Neither is a new proposal. In one shape the former has been already tried; once before the latter has been suggested, and that was at the conclusion of a cause celehre in which the State finally lost its case in a prosecution of the flour millers for combining ’ ■. restraint of trade. The millers urged in extenuation of their coming together the superfluous capacity of the dominion’s mills, and this still is an obstacle to the reduction of milling costs which the Select Committee has deputed to the Department of Industries and Commerce to try and bring about. It is instructive to learn that Britain herself is now in somewhat similar throes. There the chief flour milling concerns, apart from the Co-operative Wholesale Society, which is one of the biggest millers in the country, announced in September that they had agreed upon a scheme for the rationalisation of their industry. They have suffered, they tell the public, from a serious redundance of productive capacity. There are too many firms in ■’■ho industry, and they possess a plant capable of milling far more sacks than the public shows any disposition to consume. The result, it is said, has been that competition has reduced prices to unremunerative levels, and that the return upon their invested capital has been less than could have been obtained upon gilt-edged securities. The millers, accordingly, have come together in a new combine —the Millers’ Mutual Association —with the object of eliminating from the market the productive capacity which they consider to be surplus to real needs. Pricefixing,' the public is assured, will be wholly excluded from the objects of the new association, and “ individual independence and incentive of competition will continue.” But the '‘redundant mills” will be closed down, and production 'will bo concentrated, in accordance with an agreed plan, in those mills which are best situated and best equipped. “The purpose of the new association is to reduce’costs of manufacture and delivery -by improved

organisation.” The economy to be, achieved by concentrating production is the principal argument in favour of nationalisation of the milling industry, as urged by the Labour Party in New Zealand; but Messrs Holland and M‘Combs must realise that a large part of this economy consists of tho saving of human labour. In other words, men now employed will bo thrown out of employment, as has already taken place in the milling industry in England. If it Is not proposed to dispense witn superfluous labour, nationalisation might as well be dropped, for the State simply cannot afford to increase the number of its public servants or the extent of its unprofitable incursions into private enterprise. ,