CUT-RATE INCENTIVE

Otago Daily Times, Issue 27221, 26 October 1949, Page 6

CUT-RATE INCENTIVE

The new f .o.b. price of 8s 9d a bushel >, for wheat represents but a niggardlyincrease of threepence on last year’s value, and it is evident that the Government intends to continue its policy of denying New Zealand growers an incentive to produce the grain , that is at present being purchased from Australia at greater cost. The additional threepence in price is, presumably, the Cost Committee’s estimate of the increased costs of production, and the sum ' might have proved adequate compensation for Canterbury growers whose broad fields are situated conveniently to a port. Further south, however, farmers will consider the amount, insufficient, * and those growers who have the misfortune, through climatic conditions or otherwise, to harvest crops yielding less than the average return of 32 bushels / an acre might suffer actual loss.

The worst feature of the new price is that it offers growers no incentive to extend their sowings. Wheat at 8s 9d a bushel is, to, many farmers, an uneconomic proposition compared with the potential returns from selling lambs and wool off the sameland. Yet for the 2,500,000 bushels of wheat which the Government is purchasing from .Australia this year New Zealand is paying twelve shillings a bushel, and when purchases are made under the international wheat agreement next year the price is not likely to be substantially reduced. It is probable, in fact, that the effect of devaluation will be to force wheat prices up to the permissible maximum. The steadily declining acreages of wheat planted in. New Zealand are evidence that cereal growers are no longer prepared to accept the role of the Cinderellas of primary industry, and until new season’s prices are announced in time to enable growers to plan their sowings, and are sufficiently high to warrant extensive plantings of wheat, the exhortations qf the Government to grow more grain must continue to fall on deaf ears.