THE WHEAT POOL

New Zealand Herald, Volume LXX, Issue 21399, 25 January 1933, Page 13

THE WHEAT POOL

Sir.—All the Government has done by creating the pool is to make the existing protection, or a degree of it, effective. Without some marketing control, the whole object of the protection and the protection itself would be lost. The Government's iuaction, under the circumstanfces, would be tantamount to promising to the growers a loaf—and giving a stone. The term "dumping" is very loosely used by wheat protection critics. A real exposition of it is provided in the export of Australian bran and pollard to New Zealand, Australian millers having a special fund, created from local sales, to reimburse exporters to enable them to dump their bran and pollard in New Zealand free of duty at much below our own prices. These products have been sold in Sydney for export to New Zealand at up to 30s a ton less than the domestic price. The other side is that if New Zealand exports bran and pollard to Australia, they have to bear an import duty of 20s a ton. You mention in an article that ''in the absence of artificial control of selling, a domestic surplus could depress the market just as certainly as imports from ab?oad." This is exactly the reason of the pool being established—to preserve to the grower the price, or as near it as possible, that the Government intended when ' it instituted the sliding scale. The case for the pool may be summarised in the following:—(1) In view of the certainty of a surplus of over two million bushels this harvest the absenco of some system of orderly marketing would have meant a collapse in prices, .thereby nullifying the protection provided under the sliding scale of duties; (2) The Government based the return to growers under the sliding scale at 4s 4d a bushel on trucks. With no obligation on the part of millers to buy more than immediate requirements farmers, under pressure to realise, would not have the remotest chance of securing this price. The Government, therefore, had no other logical course but to participate in the compulsory pool to make its previous decision operative. (3) The selling price of the wheat has been fixed at exactly the same price as last year, i.e., 4s 7d, f.o.b. The price of flour will be the same, and the price of bread should be no more. (4) With stability in the market and free buying it may be unnecessary to export any of the surplus, a matter that can be determined as climatic and acreage conditions for the following crop develop. An organisation such as the Wheat Purchase Board can frame its policy in this respect as the season advances, and so provide against a possible shrinkage for the following year in the event of a drought season, such as 1932, recurring. Without controlled marketing such safeguarding would be impossible. (5) On present prospects the wheatgrower will receive about 3s 7d to 3s lOd on trucks—he is receiving 3s to start with—the English grower will receive a guaranteed price of 5s 7d. The "protection of the protection," as it were, embsdied in the new scheme, is surely not especially iniquitous in securing to our growers ap- 1 proximately 8d a bushel, when the British growers receive 5s 7d, and, if further instances were needed, the German growers a protection of 12s 6d a cwt., the French of 6s and the Italian of 6s 9d. Wheatgroweb.