NEW ZEALAND WHEAT

King Country Chronicle, Volume XXVII, Issue 4461, 24 October 1933, Page 7

NEW ZEALAND WHEAT

SOLD CHEAPLY ABROAD HOME PRICES UPHELD It is comjmon knowledge that the New Zealand wheatgrowing industry is so organised that it ensures to the grower a price in his domestic market independent of any of the vagaries of the world wheat market. Special legislation in the growers' interests has secured this immunity from external market influences, although it is fair to assume that should the price of wheat in those markets go to, say, 5s per bushel, some adjustment would be made in the prices at which wheat grown in New Zealand would be disposed of in New Zealand On the face of it, this legislation was passed with the object of securing to New Zealand sufficient wheat for its own requirement, which are about 9,000,000 bushels per annum for human farm purposes, and seed. Importing wheat had two, among other, objections—one, that New Zealand should not be at the mercy of possibly exploiting suppliers; and two, that in any case, following the ancient policy of holding sufficient footstuffs, New Zealand should be independent of other countries. Wheat has fallen in price in the world's markets this year to as low as 1/11 to 2/- per bushel, and in Australia to 2/- to 2/1 per bushel at railway sidings. Shielded Market The New Zealand wheat farmers* local market, however, was shielded from such low prices by the legislation above referred to. No other industry was accorded such favoured treatment, to say nothing of the advantage of heavy import duties and the ocean freight rates that importations of wheat in the grain or milled products would have to bear. Other primary industries were in difficulties at the beginning of this year, and in order to help them the Government in its wisdom forced the rate of exchange on London to 25 per cent., thereby imposing—not on the overseas purchasers of New Zealand produce, but on all the people in New Zealand—the heavy burden added by that action to an already heavily-taxed comtmunity. The wheat farmer, of course, participated in the benefits of the higher exchange, and is still benefiting. He also participates in any advantage accruing from the compulsory reduction of interest rates, if he has to pay interest, and rents if he is a tenant. His farm requirements in the form of fertilisers and implements and other necessary appliances are also free from sales tax. In these happy circumstances is it any wonder that the New Zealand wheat farmer, on land giving the exceedingly high average yieUd of S6i bushels per acre (Australia's is about 12) is well satisfied that so far the last harvest has given a threshing return of 11,061,000 bushels.

As already explained, New Zealand requires about 9,000,000 bushels of wheat for itself. What about the balance? That is partly answered in the export returns, which show that wheat to the amount of 705,527 bushels has been exported between January 1 and July 31 this year. At what price? Approximately 2/64 per bushel on the declared value. I Export Value What has been the price at which wheat has sold in New Zealand? The question is answered in the following schedule at which, and not under,, farnijers mtust sjell tiheir wheat to the millers: —Price of wheat to millers, January to March, Tuscan 3/4 per bushel, Hunters 3/6, Pearl 3/8. Prices for May, Id pear bushel on these prices; June and July, another Id per bushel; AugU3t and September, an additional id per bushel; prices for October, November, and December will be, Tuscan 3/9, Hunters 3/11, Pearl 4/1. There is another variety of wheat, a highclass grain called Velvet. It ia merely mentioned here to describe the position of the wheat farmer in relation to other primary and secondary producers and especially to those consumers who are trying to live on unemployment pay. Some of the wheat has gone to East Asian markets, and some of it to the United Kingdom, where the English wheat farmer will, perhaps, accord it as cordial a welcome as he seems inclined to give to New Zealand butter and cheese which "cut across" his markets.

The curious thing about this wheat business is that the imports by New Zealand of wheat from other countries amounts this year to 273,032 bushels, and of flour imported there were 141,593 centals. Notwiti*standing the huge surplus of wheat raised in the Dominion, this imports*

tion of nearly one-third of the quantity of wheat exported appears to be inexplicable. Of course, the price of bread is mainly based on the price of flour. But the price of bread with flour at the price it is, the baker will aver, leave very little margifti for him; although it is still selling in Wellington at below what he states is the Board of Trade's fixed maximum price.

There is no doubt about the mystification of other producers and of traders as to how the wheat-grow-ing and flour-milling industries are able to hold the prices of their commodities where they are and for bo long.