THE WHEAT PACT

Otago Daily Times, Issue 22053, 8 September 1933, Page 5

THE WHEAT PACT

m EFFECT ON AUSTRALIA PROBABLE BENEFITS. (Fhom Our Own Correspondent.) SYDNEY, August 31. It is with some' reluctance that Australia has endorsed the-wheat' agreement recently reached in London, for iu the words of the Prime Minister (Mr Lyons), "any arrangement which postulates a; slowing up of Australian development of agriculture on normal lines is not one which can be regarded with any degree of pleasure." Others who are closely associated with the wheat position, and are able to express expert opinion, see in the agreement both a compromise and an experiment open to many objections. To restrict production of a foodstuff in the face of much unsatisfied need for food throughout the wiold appears to many to be a moral ineptitude, but at the same time, paradoxical as it may seem, it may be the quickest means of restoring some degree of efficient working to the world s distributive system, and .of restoring a general increase in purchasing power.. On the whole, Australian official views are favourable to the wheat pact, for Australia is bound to benefit if the hope of increased prices materialises. Owing to the decreased harvest expected during the coming season, the scheme will make no difference to the amount which would be extorted frpm the 1933-34 crop. Given a normal crop of 200,000,000 bushels in 1934-35 it might involve a loss of 30.000.000 bushels of the export trade. Against that loss, however, would have to be calculated any advance in wheat prices which might arise from the scheme. A gain of Is a« bushel would mean a gain of £6,000.000. more than the total value of the present price of the wheat that would be excluded from export. ' Estimates of the coming harvest submitted to the Svdney Wheat Conference held in July, showed that it was not likely to exceed 160,000,000 bushels, which would be a falling off of more than 40,000.000 bushels, compared with a normal harvest. In the circumstances even if Australia exported the whole of her surplus, she would: still be 10.000.000 bushels within the restrictions. Various sugcestious have been made as to the disposal of 'any surplus in 1934-35 season. The idea at the Sydney Conference was to denature this wheat by the addition of colouring or partial crushing to make it unsuitable for milling. Experts agree that a broader market for Australian grain is likely to result from the agreement, but it 19 admitted that uncertainty in regard to Russia lingers. If the agreement prevents American dumping, if it affords control of Continental subsidised wheat, and it it effectually regulated Russian exports, tlfen the prospects for Australia are bright indeed. It is not likely that the problem of Ion" storage will have to be faced in Australia for at least two years."