THE OTAGO DAILY TIMES MONDAY, FEBRUARY 23, 1931. WHEAT AND BREAD.

Otago Daily Times, Issue 21267, 23 February 1931, Page 6

THE OTAGO DAILY TIMES MONDAY, FEBRUARY 23, 1931. WHEAT AND BREAD.

The Prime Minister has directed that an investigation shall be made of the wheat and flour position in the Dominion since, “with a general fall in the prices of commodities all round, and with reductions in costs, there will have to be reductions not only in the price of wheat but in the milling and baking industries as well.” Pending action on the part of the Government, there can, the president of the Master Bakers’ Association says, be no reduction,- until at least the end of the year, in the price of bread. No one can very well escape the conviction that, at a time when there is a great surplus of wheat in the principal grain-producing countries in the world, the price of bread in New Zealand is unduly high. The price is governed, however, by the protection that is accorded to wheat-growing and flourmilling in the Dominion. It has been difficult for experts to arrive at a reliable forecast of the yield of wheat in New Zealand this year. The estimate by the director of the Wheat Research Institute is higher than that of the Department -of Agriculture, which calculates the yield at 27.08 bushels per acre. As the wheat area is estimated at 243,000 acres, this would give a return of 6,580,460 bushels if, as is unlikely, all the crops are harvested. The Wheat Research Institute, by estimating the yield at 29 bushelp and by allowing for an importation of 750,000 bushels, concludes that the aggregate supply will be sufficient for the needs of the Dominion. On the assumption, however, that the Department’s anticipation is realised and that the importations amount to 750,000 bushels, the total available supply will be 7,847,440 bushels, as there was a carry-over of 517,000 bushels from last season. The Average annual consumption, according to the latest official statement, is 8,556,519 bushels and, on this basis, there will be a deficiency of 709,079 bushels to be made good before the harvest of 1932 is available. The Department’s estimate seems to be the more reasonable since the crops in Canterbury were greatly affected by the lightness of the rainfall and the prevalence of warm winds in midsummer.

It is very, unfortunate that, after all the inducement that has been offered through the tariff to farmers to grow wheat in sufficient quantity to meet the country’s needs, there should be a likelihood of a heavy shortage in this year’s supply. The desirability of encouraging the local growth of wheat and thus of securing the utilisation of a large amount of labour in an agricultural industry will not be disputed in circumstances in which the prevalence of unemployment constitutes a perplexing problem. The indications are that it will be necessary to import 1,400,000 bushels of wheat prior to the harvest of 1932. And it is highly unsatisfactory that the policy of the New Zealand Wheat Growers’ Association'has been a factor that has contributed to the creation of this situation, since the shortage of local supplies has been brought about partly through the action of the Association in exporting considerable quantities of wheat during the 1929-1930 season with the object that, through a reduction of the surplus supply at that time, the local price might be maintained. The effect of that policy was that wheat, which was worth 5s 3d a bushel in New Zealand, was sold abroad at a net price of 4s 3d a bushel. The Association seems to have imperfectly realised that the object of affording protection to the growers of wheat in the Dominion was that the country might be guaranteed a full local supply. It will not be a matter for surprise if a strong demand is excited, especially in the North Island, at the present time for a reduction, if not a removal, of the existing duties. It is certainly difficult to refute the contention that, in view of the low price at which it is quoted in many countries —a price that is below the cost of production in most eases—wheat is stabilised in New Zealand at a figure that is rather high. It should be remembered that, though the average local consumption of wheat has actually been 8,556,519 bushels during the past five years, the Dominion is capable of using considerably more than that amount if it is available at a reasonable price. For instance, in 1922, an abnormal local harvest of 10,500,000 bushels permitted the exportation of about million bushels, but at the same time the local consumption increased to 9,347,930 bushels—about 800,000 bushels more than the average consumption. In 1924, on the other hand, when the local harvest was only a little over 4,000,000 bushels, and when 3i million bushels had to be imported, the total home consumption of wheat was only 7,719,289 bushels. In other words, the consumption was 1,600,000 bushels less than when there was a bountiful harvest. The scarcity of wheat in 1924 gave a decided setback to the growing poultry industry. Even now the supply of wheat for fowl feed and stock food is hardly satisfactory throughout the Dominion.