WHEAT OUTLOOK

Otago Daily Times, Issue 21994, 1 July 1933, Page 14

WHEAT OUTLOOK

AUSTRALIAN POLICY REASONS AGAINST RESTRICTION. (From Our Own Correspondent.) SYDNEY, June 15. Had the Commonwealth Government shown any disposition to agree to the proposals made at the Economic Conference on behalf of Canada and the United States for a restriction of the area to be sown in wheat, there would have been an outcry in every State whefje this stable product is grown. It is safe (o say that the powers of the Commrriwcalth in that connection would have been challenged, for it is doubtful, under the Constitution, whether the Federal Government could take action in such a matter without the unanimous consent of the States. The cable message which was sent on Monday last reaffirming a previous decision to stand firm against a restriction of acreage really saved a very awkward situation which the nations assembled might have found it difficult to follow. They would have realised, however; that the Commonwealth is not supreme in all matters, and the occasion might have arisen for individual bargaining with the separate States. Australia’s attitude in this matter is not difficult to understand. Restriction of wheat production would bo disastrous to Australia as only by its primary produce can the Commonwealth meet its overseas debts. This has been proved time and again, and any diminution in the return will have a serious effect jn Australia’s ability to keep faith abroad. Prominent wheat men say that the less the politicians interfere the sooner will the position right itself. Low price for wheat will mean a greater demand, and with the increased demand the price is bound to rise again sooner or later. It is the law of supply and demand all over again. It is important to remember 100 that Australia has in recent years built up a large trade in flour and wheat with the East. This new market is a cheap one, and if anything is done to increase the price of these products the new outlet: is bound to be restricted. As Australia has done much in building -up this new demand, it would not like to see its labour lost.

All Australian wheat land is fallowed, and-some of it has been in the course of preparation for at least six months. If it were decided to restrict the acreage who would compensate the farmers for the work they have already done? This is an important question, and so far no one has been able to give an answer. Australian wheat farmers have not had a rosy time for years now, and it is natural that they should bitterly oppose any move that would still further restrict their returns. One authority points out that during the war the wheat crisis was all on the side of America, Canada and the Argentine. While prices in Australia were restricted by law to 4s 9d -j bushel and later to 5s 3d a bushel, Canada and the United States were getting Os and 10s and the Argentine 11s. Xow the crisis is the other waij round, and Australia has certain advantages by reason of its nearness to the growing Eastern market. Three good seasons in Australia had constituted the happiest event that could have been experienced, enabling the Commonwealth to meet its overseas debts. For these and various other reasons it is contended that Australia cannot afford to fall into line with the advocates of restricted acreage.