PROTECTION OF WHEAT.

New Zealand Herald, Volume LXVIII, Issue 20959, 24 August 1931, Page 5

PROTECTION OF WHEAT.

DEFENCE OF SLIDING SCALE. : 2 HIGH COSTS IN INDUSTRY. MR. MACHINES CONTENTIONS. J A further communication regarding Jv wheat and flour duties has been received from Mr. W. Machin, of Christchurch, in which he criticises various points in the Herald's article of August 11, and Suggests that it was written without knowledge of "the facts." Mr. Machin proceeds:— "The country has had for years ample supplies of wheat. There is wheat of the 1929, 1930 and 1931 harvests still in store in New Zealand, and the sowings for next harvest are estimated at 300,000 acres, which will probably give a surplus of at least a million bushels. " The price of 4s 9d the grower asks is no record, but the lowest-'price since the war, and is Is a bushel less than the 1914 price. The wheatgrower's costs are. 50 per cent, higher than they were before the war. These costs are nearly all bolstered up by the State. Wages after the recent cut k are still 50 per cent, above pre-war. Are the prices of the other protected industries of New Zealand as low in comparison with 1914 prices as the price the wheatgrower has asked for? " You state that ' the essential condition 'of the operation'of the sliding scale of duties 'is a scarcity of wheat.* That is not so. If New Zealand suffered front a scarcity, any duties on wheat would bo swept away. Ifc is . obvious that these duties permit no increase in prices to the consumer of bread, even if the price of wheat outside New Zealand goes up to high figures. They ensure adequate supplies within the Dominion, and if the wheatgrower gets a much bigger crop than the Dominion can consume, breadstuff prices will decrease proportionately. " The sliding scale itself can be altered —is being altered—to make bread cheaper, but it should not be altered to give th 9 wheatgrower a bigger ' cut' than wago and salary-earners have had. The wheatgrower would be delighted if he could secure a price for his wheat on parity with wages and wage costs in New Zealand. " The New Zealand worker spends about 4 per cent, of his income on bread. Wages are high in New Zealand and consequently the costs of everything are also high. Therefore, prices of everything, except primary produce, are high. The same laws which protect wages here can and should in equity protect the of the wheatgrower proportionately to his high costs through high wages and the high protection of other industries. But he is asking for a protection which is actually lower than parity with these, and because he wants a protection which really protects his industry, you blame him. Admitting that he needs protection, and should have it, you seek to push on to him a form cif protection which you know would not protect him at all in emergencies such as that at present existing over the world's wheat supplies."

[Mr. Machin's appeal to "the -facts of the case " would bo more convincing if he were not so careless in his own statements. His assertion o! ample supplies of wheat" is true only because heavy importations have been made to supplement deficient domestic production. The facts on this point are set oat in the official Year Book, which shows that in the five years from 1925 to 1929, the. local production averaged 7,278,310 bushels, and the annual consumption 8,556,519 bushels. The harvest in 1930 was less than that average, the yield being 7,239,556 bushels, and the latest threshing returns show a total of only 6,997,096 bushels, for this year's harvest. No objection has been made against reasonable protection for wheatgrowers. The criticism is directed entirely against a system which is designed to create absolute protection against competition—a measure of protection which no other industry could obtain —and to establish a monopoly which can be maintained only by keeping production below minimum requirements, since an exportable surplus would inevitably undermine the "stabilised" prices.—Editor Herald.]