THE PRICE OF WHEAT.

Lyttelton Times, Volume CXII, Issue 13573, 20 October 1904, Page 5

THE PRICE OF WHEAT.

A COMBINE SCHEME. At a meeting of the North Canterbury Executive of the. Farmers’ Union, yesterdaymorning. Mr W. R. Devereux delivered an address in favour of a. scheme for regulating the price of wheat. Mr Devereux said that, he had been for two years selling farmers’ grain at auction, and ho had been struck by the sorry spectacle, which he had, seen on the previous day at Rangiorn. of potatoes being sold at Is per sack, difficulty' being experienced in) getting sacks extra.. He had been impressed by the fluctuations of .prices for produce, and experience seemed to show that there was no finality about them. A farmer who grew wheat or potatoes one year did not know what, lie would get for them the next year, but some certainty might be attained if they were able to fix prices. They could not secure the. same prices year afteryear, for they must consider prices in Australia and California. If they charged' more, of course, than the imported price, they would meet disaster. The. farmer was the victim not only of small prices, hut often of the greed for high prices. With wheat at 4s 6d a. bushel, the farmer would waft, for ss, and thou ho found that the, grain, could be imported for 4s od, and the market collapsed. He could not say' that they' should get 4s a. bushel next year, or any other price they' might nominate, but when wheat wa s down Vo an unpayable price, he could show them, he thought, how to get a fair and payable price. Farmers .would do themselves infinite damage by' waiting for high prices, but if they would treat their own business in a reasonable spirit, they could always obtain a very fair price for wheat. In some years 100,000 or. 200,000 bushels of wheat prevented the producer receiving a. price equivalent to the cost of wheat imported from Australia. In comparing the annual yields of wheat for the period from 1891 to 1903, ho found that, in 1892 there were 402,273 acres in wheat, which yielded 10,257,738 bushels, while in 1899 389,034 acres yielded 13,073,416 bushels, and in 1903 194,355 acres yielded 7,457,915 bushels. When there was a. large yield prices went down with a run to the minimum, and with a small yield the case was reversed. Ninetynine farmers out of, a hundred would explain that the local market was controlled entirely by the London market, hut that was only because the farmers allowed it. After all tho largest part’ of the wheat was consumed by the colony. For consumption in Fne colony and for seed purposes 5,560-000 bushels were required, and if farmers could bo got to know that they had to deal with New Zealand, in a. few years they could arrange to grow as much as was needed for the colony and for export, and to obtain . a fair price for -their produce. It might be | asked whether it would be fair to charge a higher price in the colony than that ruling in the London market, but lie contended that tho law of supply and demand had been abrogated for the time being by the Government. There was no such thing as supply and demand, for the. price of labour and everything elec was regulated by the Arbitration Court. There might lx? forty men walking about Christchurch looking for work, but unless they could earn the minimum wage they might walk about and starve. A price for labour had been fixed, and if farmers were not ready to do something in the same direct ion, they would be left out in the cold. The farmers should consider themselves. "While other people, ran to the Government for assistance, the farmer had no need to do so, for the remedy was in his own hand*. If the law of supply and demand ■was abrogated by the Government to the advantage of any particular class, then everyone must do the. same, thing to restore the equilibrium, and the. class that did not do so would become the odd class. The farmer was in need of a scheme that would secure him a higher price for his produce. : The average yield of wheat in the colony was 7,457,915 bushels yearly, and there was an average surplus of 1,897,915 bushels over tho amount required for the colony. It was the surplus . that caused the trouble, | and once they got rid of it, they could immediately raise prices to what it would cost ! to import wheat from Australia. He had .devised a scheme for dealing with the sur- . plus. It depended first on tho establish- . ment of a farmers’ statistics department, ; which could give them an idea, of tho wants of the colony. Sir Joseph Ward’s remarks on the butter industry applied also to wheat. In the annual report of the Dc- | partment of Industries and Commerce he , said, “If arrangements could be made by i whioh the whole butter output, of the colony could be concentrated for sal® through one I channel, it would be a great step forward, and it is in the interests of the producer to bring about this desirable condition of affairs.” Should he not do the same with, wheat? Instead-of farmers going to merchants with their samples, he. proposed that, the whole of the colony's wheat should be dealt with by a body appointed *bv farmers. The details could be settled by the farmers, but he proposed that an advisory Board should be appointed, consisting of the chairman of directors and managers of cc-operative associations in the colony, witn four or five members appointed by the Farmers’ Union. The Board would sell tho colony’s wheat. They would decide, for instance, in one particular year that they could afford to take wheat at 2s 6d per bushel for export and 5s 6d for local consumption, and they would advance to the farmer on that basis, after deducting the selling commission. He thought there would be no difficulty in finding the money, for the farmers might form themselves into a limited liability company, with a capital sufficient to deal with their own produce. It might he said that the millers’ combination would refuse to purchase at the fixed price, and that some mean farmers w-ould sell below that price, but the millers must have wheat, and they must go to tho farmers for it. In any case there was plenty of water-power in Canterbury, and the farmers could provide a. mill that would supply flour enough for the whole colony. That would settle the matter if the millers refused to come into line-, or there were blacklegs among the farmers. As for selling flour at a higher price in the colony than in London, they had a precedent, for the Central and Tai Tapu Dairy Companies charged., tho public of Canterbury Is 2d a pound for butter when the London price was 955. No one grumbled because it was only a fair price to charge. The farmers ought to combine and get the smartest of their number to conduct their wheat business. Supposing the price of wheat was fixed as he suggested, farmers might be cited by the Arbitration Court- to show that the price was justified. He thought conclusive evidence on that point would always be available. Mr Devereux then went on into details of the scheme, such a.s the payment for the storage of wheal held by the farmers. In conclusion he said that his scheme would have a farreaching effect and if adopted, it would be of great benefit to the working classes as it ■would! give a. great impetus to work. Such a-demand for labour would be created that the unemployed difficulty' would sink imo insignificance. Mr G. IV. Leadley said that they appreciated Mr Devereux’s desire to assist them, however much they disagreed with details of his scheme.-. He had long been of opinion that farmers must meet combination by combination, if they wore to get the full benefit of their -work, but be had been unable to .satisfy himself as to tne, form that combination should take. They were .often advised* not to buy cheap boots nor clothing, but no one over objected to cheap locail bread or mutton, indeed, if the prices or those commodities were increased there were loud cries from the consumer, regardless of the cost’ to tha man who was unfortunate enough to bo a. grower of wheat, or mutton. If any good was to come from an effort such as Mr Devereux suggested, it could bo obtained only by the union of farmers, hut they were so accustomed to work in isolation andi independently of each other, that unity was the last thing they would dream of. If they could withhold a part of the

wheat .yield from the local market, they could, doubtless, raise the price artificially', but after all, the price of their staple products were regulated by the universal law of supply and demand. Instead of adopting a fanciful scheme for the disposal of the yield, if they could get fanners to reduce their wheat area by 25 or 15 per cent from the usual average, they could get 4s per bushel for their wheat every' year. But as they could 1 not control the seasons, they might get excessive yields from the restricted area, and the whole question was so big that it could hardly be hilly discussed. The farmer was protected b,v customs duties to the extent of 10 per cent, but other industries had protection to the extent of from 22'i per cent to 40 per cent, and even then some legislators t hought that the farmers were given too much protection. It was clear that they could not hope for any legislative assistance. It was remarkable that they did not secure even their own New Zealand market, but were actually subsidising a foreign shipowner, whose steamers were bringing produce to the colony at cheaper rates than those charged by the Union Steamship Company for conveying produce from one part of the colony' to another. He appreciated AD Devcreux’s interest in the matter and wished him success in his effort to help fanners. Mr T. B. Howson said that no effort could be made to regulate the. pride of wheat until proper information as to the amount, produced each year was procurable. They ought to show the Government that they must have reliable, statistics, and not figures that were useless for six or nine months in the year. The method of collecting statistics was not satisfactory, and the delay was one of the worst- features. Surely statistics could be made up in a few days, and could be available when useful. A letter from the president. Air J. Studholme, was read in reference to Air Devereux s scheme. He stated that an attempt to form a combine and fix prices in such a product as wheat would be certain to bring a great deal of odium upon them, and might lead to prohibitive legislation. They should, therefore, feel very confident that it was practicable before they decided to try it. The great difficulty' he foresaw was that of getting all actual and possible grain growers, or even a large majority of them, to agree to limit their own freedom, and, unless the scheme was adopted and loyally carried out by a large majority, it must fail. The. millers’ combine, though the members concerned were so very few comparatively, had apparently fallen through. Mr W. Hall, a member of the executive, also sent a letter stating that Air Devereux's scheme might, be a good one if the output of wheat could be controlled, but he thought it was clear that that was impossible. Ho was told that wheat growers would bo fairly satisfied with 2s 6d a bushel. In that event, if the price was artificially raised to 3s 6d a great deal more wheat would be grown. There would bo a much larger surplus for export at the lower London price, and a corresponding diminution in tho growers’ profits until the.y again reached the figure at which it would just pay to grow wheat. The result -would he that more wheat would be grown, but the price would not bo greater. Even if the advantage to bo gained from combination was much more obvious, they would not be justified in combining, for such a course would bo met by many with disfavour. So far as he could see, there was no difference between the organisation suggested by Mr Devereux and other “combinations in restraint of trade. ,J Air J. Allan said that it was impossible to get the farmers to be unanimous, but he was very glad that Air Devereux had spoken as he had. Mr W. F. Pannett said 1 that the question of securing combination among the fanners had long been be fere the Union, but at present he could not see that it was practical. The first process must be to show farmers that combination, was advantageous and necessary. In reply to Air Lcadley’s remarks, Mr Devereux said that the reduction by 25 percent of the. amount of wheat grown would be disastrous to the colony. They must grow a surplus. The flourmillcrs’ combine was never stronger than at the present moment, and Air Studholme was mistaken in thinking that it was failing. He wished to remind them that they should not depend on one class of their produce for the export surplus they needed. Their wool was up, but they should not have all their eggs in one basket. So long a«s the country had to pay interest on the national debt there must be something to sell, in order to provide money for the interest, and they must, therefore, have their wheat to sell as well ax their wool and mutton. Air Leadley said that he still thought that it would pay to reduce tha wheat area. They had paid the interest, for years with other products and they could do it again. Mr D. Jones said that the wheat-grow-ing area could be regulated only by' the rainfall. Mr J. O’Halloran said that they had listened to an able address, and had had u

very thoughtful scheme put before them. They must recognise that combination mast come, and though the farmers were not peeking it they could not but feel that it must he thrust upon them. On the motion of Mr Leadley, seconded by Mr J. A. Fannott, a. vote of thanks ■was passed to Mr Devercux.