WHEAT AGREEMENT

Hokitika Guardian, 28 August 1933, Page 5

WHEAT AGREEMENT

PRICE AND SUPPY

WORLD CONFERENCE DEBATE.

.(British Official Wireless.}

RUGBY, August 25,

An agreement on tho world price of wheat, and on the limitation of supplies, was reached to-day by the Wheat Conference, in London, at which 29 countries were represented. The wheat agreement was signed at 10.30 p-.m. after ia, delay due to complications in the drafting. The delegated concluded the session after midnight. The signatories are:—

Importers: Germany, Austria Belgium, Bulgaria, France, Britain, u-reece, Hungary, Ireland, Italy, Poland, Roumania, Spain, Sweden, Czechoslovakia, Switzerland, Jugoslavia.

Exporters: Australia, United States, Canada and Argentina, while Latvia, Turkey, Norway, Denmark and Esthonia will probably sign later. The Big Four’s restrictions iare based o n their average sowings from 1930 to 1933, after deducting the normal domestic'requirements. Considering the sharp divisions prevalent during the week, the wheat agreement now -awaiting signature is an achievement of some importance, which may bear out expectations exercising a stabilising effect on the market and also influence the United States against the threatened subsidise atioh'' of exports to eastern marketc, which might seriously effect Australia.

It is understood that Mr ; S. M. Bruce, who adopted a careful attitude throughout, regards the agreement as the maximum which could reasonably bo expected, but does not share the hopefulness with which some of the Continental quarters profess to regard it.

The importers certainly have agreed to the figure of 63.6 gold cents a bushel, as the point from which current reductions will be considered after that price prevails for four months, but among the serious snags is the absence of any provision as to the extent -of the tariff cuts. Moreover, the paragraph added to the agreement to-day at the request of the importers, emphasising certain conditions were governed by the domestic situation of individual countries, indicates the caution with which they are moving. The agreement may be withdrawn, within a period thus far unspecified. The conference started on Monday, and is therefore one of the shortest international conferences on record. Th, a exporting countries agree to limit the total of export of wheat in 1934 to 560 million bushels, and with the exception of Russia and the Dlanubian States, reduce production by 15 per cent.

The agreement will be. in force for two years. The. importing countries in paragraph to 'be ladded to the agreement, declare that measures affecting the area of wheat grown and the degree of production are primarily dependent on* domestic conditions in each country, and any changes in those measures must obtain the sanction of the Legislature. The intention of the agreement is nevertheless that the importing countries will not take advantage of the reduction in exports by developing domestic policies in such a wtay as to prejudice the efforts of exporting countries in the common interest, to restore the price to a remunerative level.

The French delegate informed the Conference that his Government was prepared to give proof of the desire for an agreement by accepting the price. The German delegate spoke in ‘On behalf of Russia, it was stated thiat the Soviet would sign but with a reservation as to the limitation of exported wheat. The Damibian States intimated that they were in the same position as Russia.

There was a proposal from America, that tile, price level question be left over to be determined by the Wheat Advisory Committee, which is being set up in London. The Italian representatives also urged that the matter be dealt with later, but their proposals were defeated. Britain and other non-exporting producing countries will sign the agreement. In regard to the figure of 63.08 gold cents per bushel inserted in final agreement ,the index figure for week ending August 5, was on this calculation, 55 gold cents, and is now between 53 and 54. It will he seen, tnerefore, that the price is a rise of approximately ten gold cents per bushel and will be maintained at that figure for a period o r four months before it will be necessary for the importing countries to adjust tariffs.

Wheat prices advanced on the Liverpool futures market, when news of the agreement became known. Prices were three farthings to seven-eighths of a penny down at opening, but rose halfpenny to three-farthings higher than yesterday’s close.

The Canadian Premier, Mr Bennett, who is chairman of the conference, announced that the exporting countries had accepted thirty-two gold francs per quintal, and 63.08 gold cents per bushel, as the price level at which importing nations may bo asked to readjust tariffs on. The wheat exporting countries bad, ho explained, desired a h : gher price, but in view of the representations made by other delegations, they were prepared to agree to this price.