THE DUTY ON WHEAT.

New Zealand Herald, Volume LXVII, Issue 20600, 26 June 1930, Page 10

THE DUTY ON WHEAT.

The experiment of a tariff automatically adiusted to changes in values was applied to wheat and flour three years ago, with the ostensible purposo of stabilising the. domestic prices at arbitrarily determined rates, and by the consequent standardisation of the gross returns, encouraging the production of wheat in the Dominion. By this statutory fixing of prices,' wheaterowers and flourmillers have enjoyed security from the vagaries of markets, a privilege denied to every other class of primary producer and industrial manufacturer, while consumers have been taxed at steadily increasing rates to maintain this veiled subsidy. Wheat is cheap everywhere but in New Zealand; as in other countries, the returns to producers in the Dominion have shrunk with the general decline in prices, except in the case_ of wheat. The whole benefit of lower prices has been secured by the wheat farmers, at the expense of the rest of the population, from whom this sacrifice has been demanded with no better justification than an assumption that independence ' in breadstuffs is essential to national security. It is difficult to measure the mischievous effect of dear hread. but the injurious consequences of dear grain are apparent in the languishing of the poultry in-

dustry. Attention has frequently been directed to the possibilities of expansion in this field, for which an unlimited market is assured; yet those who have engaged in it are almost hopelessly handicapped by tho cost- of grain feed, and their difficulties discourage any extension of the industry. The claim of wheat, farming for reasonable protection against competitive imports has never been contested: the opposition has been entirely against the demand for a measure of protection that excludes all competition and virtually paralyses all forms of pro duction that use grain as their raw material, and rely upon the world|s markets for the disposal of their produce. The artificial stimulation of wheatgrowirig has merely diverted to that purpose, land that would be more economically used in other forms of production; a heavy burden of indirect taxation, increasing as the value of wheat falls, has been imposed, and opportunities for tho profitable absorption of men now idle have been closed. It is by removing anomalies of this character, not by devising fresh schemes of taxation, that the Government will make progress toward its promise in the last Budget of "a permanent cure for unemployment."