THE SUGAR INDUSTRY IN AUSTRALIA

Otago Daily Times, Issue 23013, 16 October 1936, Page 6

THE SUGAR INDUSTRY IN AUSTRALIA

CONDITIONS OF PRODUCTION Queenslanders are concerned at the statement made by the president of the Federation of Chambers of Commerce of the British Empire (Viscount Elibank) at Dunedin on Wednesday .night, that the Queensland sugar industry existed because of " a heavy subsidy." Advice to this effect has been received by the president of the Federation of Chambers of Commerce of Queensland (Mr George Groom), who was speaking at the Dunedin civic reception to the visiting delegates when Viscount Elibank made the remark in question. Representative Queensland organisations have since requested Mr Groom to forward details about the matter and to deny, in New Zealand, that the Queensland sugar industry receives any such benefit. Following ' the receipt of this request, Mr Groom made the following statement yesterday:— " During a speech at the civic reception to the delegates of the Federation of Chambers of Commerce of the British Empire, I was referring to the fact that Australia had proved to the world that the white man could grow, cut, and mill sugar in the tropics—an achievement which the white race had not been able to achieve elsewhere. Viscount Elibank interjected: 'With a heavy subsidy.' Beyond making the remark 'To no extent," I did not further reply to the comment of our esteemed lord president, because of time limitations and the fact that the explanation would have required a longer period than, as the night was advancing, my lord president and those present would have been prepared to extend, even under the utmost cour"it would appear that a section of the Queensland press has received a message which recorded only Viscount Elibank's remark, without the accompanying text, and advices which I have since received indicate that its publication has excited considerable public and press discussion in that State. A misunderstanding of the position has accordingly arisen, apparently through the omission of the reply to Viscount Elibank, in the press message published in Queensland, and I have been instructed by the executives of the Federation of Chambers of Commerce of Queensland • and the Federation of Chambers of Commerce of Far Northern Queensland and certain sugar interests to correct any impression that may have arisen amongst the congress delegates and New Zealanders that the Queensland sugar industry receives a heavy subsidy, as such is not the case. "The position is that, as sugar was one of the first of the commodities that would be likely- to show an unnatural increase in value in the world's market with the outbreak of war in 1914, the Commonwealth Government in that year immediately placed an embargo on the export of sugar from Australia. Simultaneously, the Queensland Government, through its price-fixing authorities, endeavoured to keep the. price of Australian consumption down to a normal price. The result was that the Queensland sugar industry did not share in the high world prices that fell to the lot of the established exporting industries. Australia was not then producing enough sugar for its own requirements, and importations had to be made at values that, as a result of the war, reached £9O per ton, and averaged over £4O per ton, whilst the Australian raw sugar was made available at £2l per ton. "With the year 1919, due to the necessity for importing sugar, the Commonwealth Government had taken complete control of the industry so far as distribution and fixation of prices were concerned, whilst the industry was in a serious position, the acreage under cultivation in 1919 being the lowest since 1913. "The result was that, in 1920, the Commonwealth Government agreed to place an embargo on the importation of sugar and increase the price of sugar over a period of three years to such a figure as would enable the industry to get on to a sound footing again. "This increased price gave a definite fillip to the industry, and the revival that followed was maintained when, at the expiry of the first agreement, it was renewed as regards conditions, though the price of raw sugar was reduced by aboul 11 per cent. "About that time the Commonwealth Government relinquished direct control of the industry and all its subsequent economic conditions have been regulated under an agreement between the Government of the Commonwealth and the Government of the State of Queensland, whereby the Commonwealth on the one hand agrees to impose an embargo on the importation of sugar, whilst the Queensland Government agrees to provide sugar at such a price as will enable the consumer to obtain it at a definite pricp over a term of years. These agreements have been renewed from time to time, and the price to the consumer remained at 4Jd per lb for many years, but a reduction to 4d was secured by an amended agreement in 1933. Recently this agreement was renewed by the Commonwealth Government and ratified by the Commonwealth Parliament. It is to be noted that the present price to the Australian consumer of 4d per lb for sugar " entirely produced by white labour, compares with 3d and 3£d for sugar produced by coloured labour under white direction for the South Africans," and 3£d for sugar grown and milled by coloured labour and refined by whites for New Zealand. This comparison of the price to the consumer, which is the best test, places the Australian industry, with its admittedly higher labour costs, in a favourable light with the other factors mentioned.

"Furthermore, by the provisions of the agreement entered into since 1931, the Australian sugar industry has been called upon to provide out of its revenue an annual grant to assist the preserving branch of the Australian fruit industry, and representative fruit organisations in Victoria and elsewhere have endorsed the renewal of the sugar agreement. In addition, manufacturers of preserves and jams have, since the inauguration of Government control, been able to obtain sugar for their exported goods at world parity values, and for their Australian-consumed goods at a substantial discount. The total amount of these concessions exceeded £300.000 per annum but it has been proportionately reduced with the general reduction in the price of sugar. "It will thus be seen that the industry does not receive a subsidy, but benefits from the application of Australia's general policy of protection. In making this explanation at the request 'of Queensland organisations, which are somewhat concerned at the moment, I am sure that this description of what really occurred at the civic reception in Dunedin on Wednesday evening, with the details of the actual methods under which the sugar industry operates, will remove misapprehensions which have arisen through a misunderstanding amongst my fel-low-Queenslanders, whose championing of an industry of which they have every reason to be proud cannot be objected to under the circumstances."