WHEAT PRODUCTION

Otago Witness, Issue 3418, 19 September 1919, Page 15

WHEAT PRODUCTION

THE GOVERNMENT'S POLICY. DEFENDED BY BOARD OF* TRADE. (i'KOM Ol!R UIVN COEEE3I'OKIJ2»fr-i WELLINGTON, September 16. The annual report of the Board of Trade has the following paragraph on the policy and practice of the New Zealand Government regarding whqat production : "From November, 1917, till April, 1918, the board was in constant communication with the Government and the wheat growers as to the price of wheat to be fixed for the 1918 19 crop, and eventually an arrangement was come to between the growers and the Government at a conference held in Christchurch on April 9, presided over by the Hon. \V. D. S. Mao Donald, that the Government should guarantee 63 4d as a minimum, with an open market. Had this ofi'er resulted in a, sufficient area being grown that could reasonably be relied on to satisfy New Zealand's requirements on the experience of prior years there would have been no necessity to exercise the option over the second 2/000,000 bushels of Australian wheat in December. In view of the fact that the Government were purchasers of Australian wheat and intended to control the price of flour and bread it was impossible to give effect to the exact terms of the arrangement made with the farmers, and consequently the Government determined to take ovor the crop from the farmers at a fixed price of 6s 6d per bushel, f.0.b., allowing the usual increments of Ad per bushel per month from May to October and to continue the scheme of control through tiio "Wheat Control Office, which had worked satisfactorily during the previous year. The scheme as gazetted 011 February 25, 1919, is in all respects, with the exception of the price, identical with the scheme published as an appendix to last year's report, and therefore is not repeated here. The Government lias been criticised for this departure from the arrangement made in Anril, as it is alleged that had the original offer boon adhered to producers would have trot considerably more than 6s 6d per bushel for their wheat. While it is tr.ue that the April arrangement was not stictly adhered to, growers of wheat did not suffer thereby. The season turned out to be a phenomenal ono and the yield per aero one oE the highest on record. As most of the wheat grown was of the Tuscan variety farmers would probably have found a difficulty in disposing of it at exceedintr 6s 4d, the minimum guarantee by the Government. Furthermore, the price at wh""h Australian wheat could be landed in Auckland (approximately 6s sd) would have determined in a free market the price of Ne i!tr Zealand wheat, f.o.b. ,Lvttelton, for clearly the southern millers could not have afforded to have given under open market conditions

more than the equivalent of this price f.o.b. at southern ports: and have competed successfully with the Auckland millers in the disposal of their flour. On the assumption that the Australian wheat could be landed in Auckland at 6s 5d the equivalent price f.o.b. at southern ports for New Zealand wheat would not have exceeded 5s lid to 63 Id, according as to whether the Auckland purchasers were able to buy over line or through store. If purchases could bo made over lino the price of southern wheat would not have exceeded 5s lid. or if through store 6s Id. If allowance is made for the duty on Australian wheat it would raise the New Zealand price by approximately 6d. and therefore it is clear that the Government paid the New Zealand farmer the full market value for his wheat.