THE WHEAT PROBLEM.

New Zealand Herald, Volume LXIII, Issue 19320, 6 May 1926, Page 13

THE WHEAT PROBLEM.

PROTECTION OR FREE TRADE? COUNTRY'S GROWING CAPACITY. WORLD SUPPLY INFLUENCES. [by telegram:,—own correspondent. ] WELLINGTON, Wednesday, In order to endeavour to settle the vexed question of the wheat problem, which has caused so much dissension bethe South Island protectionists and the North Island free traders, the New Zealand Farmers' Union a short time ago decided to obtain reports upon the subject irom the professors of economics at Canterbury College and Victoria College. Lengthy reports were received from both professors at the quarterly meeting ol the Dominion executive of the union to-day. Professor J. B. Condliffe, of Canterbury College, after reviewing the history of wheat growing in New Zealand, stated: It is to be remembered that the population of New Zealand is increasing at the cumulative rate of 12 per cent, every five years. The mean population of the Dominion for the year 1925 (exclusive of the Cook Islands aiid Samoa), was approximately 1,368,000 people. The production necessary to give the pre-war equivalent of 6.4 bushels per head was therefore approximately million bushels in 1925. In 1930 the consumption will be approximately 10 million bushels and in 1940 12£ million bushels. The highest production so far recorded was 13 million bushels in one crop. Uncertainty ol the Market. "There is, therefore, no ground for doubting that given sufficient economic inducement the Dominion can quite well produce enough wheat for its own needs. Strictly speaking, since the bulk of the wheat lands are in Canterbury, this means that if economic adjustment be secured the present tendency for the agriculturists of the South Island to produce the cereals for the whole Dominion is likely to be accentuated in the immediate future. "I would place second in importance," proceeds Professor Condliffe, "among the reasons for the recent shortage of wheat production the uncertainty of the market conditions caused by Government interference and control. The successive changes in policy, necessarily dictated mainly by political reasons, have taken from the farmer the benefit of the good prices in lean years, while exposing him to the lower prices ruling in years of greater production. The uncertainty of the conditions under which the marketing of wheat would be carried out over a series of years has been, in my opinion, one of the worst examples possible of the effect of Governmental interference :n industry." Courses cf Action. Professor Gondiiff.; goes on to declare that from his analysis three conclusions are justified: (a) The Dominion should continue to produce the bulk of the wheat required for consumption here; (b) it is not unreasonable to expect that the wheatgrowers will be able, given stablu conditions, to produce a sufficient quantity at prices considerably lower than those ruling at present; , (c) the present .position is, however, highly unstable and likely to perpetuate the recent successions of high and low prices, shortage and over-production. If this goes on the inevitable result will be a steady diminution of production in the average of good years and bad. Professor Condliffe concludes by suggesting for the consideration of the executive of the Farmers' Union the legislation already on the Statute Book in the Board of Trade Act, 1919, which gives the widest possible powers of investigating, publicity and even control of the industry to the Board of Trade. Wider Aspect of Question. Professor B. E. Murphy, of V ictoria College, after exhaustively reviewing the question, sums tip as follows: "Our population is small and produces a surplus cf exportable food. Even if we were'cut off we could feed ourselves and at the next season produce wheat enough. Wheat is a crop that readily responds, given the inducement, to an enlarged demand at a price. If England, with nearly _ fifty million people, can pursue the policy of import from abroad we can surely adopt „tho same policy ourselves. There is, like"wisc, no warrant for the assumption that as the world supplies of wheat are diminishing relatively to the demand we shall have to produce our own or go without. , "The progress of farming technique is all tho time winning new wheat areas, and whatever may happen in the remote future there is at present no prospect of a world shortage of a nature. Wheat is produced all the time in large quantities in some parts of the world and can be quickly increased in amount in response to favourable market indications. There is no statistical warrant for the fear that the world supplies are, or arc likely to be, insufficient. The whole world in the present conditions of rapid and cheap transport is one market for wheat, and cargoes can be diverted to profitable points almost instantaneously. Purchase in Cheapest Market. "There is no instance of a wheat famine in modern times among western nations. A shortage shows itself in a somewhat higher world price and the deficit is distributed like an insurance premium over tho world consumers in the form of somewhat higher prices. The duty policy simply says that in order to guard ourselves against possible high prices in the future we should now make our prices permanently higher by artificial means. " I conclude, therefore, that there is no cogency »n the war isolation argument or tho world shortage argument, and that in the circumstances there is no reason why we should not buy our wheat in the cheapest market. The food supplies of our people should not be tampered with in the absence of the most cogent proof of over-riding public interest."