WHEAT SUPPLY.

Otago Witness, Issue 3755, 2 March 1926, Page 20

WHEAT SUPPLY.

GOVERNMENT’S POLICY. ENCOURAGEMENT TO GROWERS. WELLINGTON. February 22. Mr 0. J. Hawken (Minister of Agriculture) to-day issued the following statement:— “The Government has given further consideration to the position ef New Zealand in regard to the Dominion’s supply of wheat and wheat products, and has decided that it is desirable in the interests of the country generall that every encouragement should be given to ensure sufficient wheat being grown for breadmaking, and also for the supply of stock foods which are essential for the poultry and stock raising industries. With this object in view, therefore, the present duty on wheat of 2s per cental will remain, together with the duty on Hour of £3 per ton, and on bran and pollard of £1 per ton. In coming to this decision the Government is aware that millers may probaby find it difficult to import wheat for gristing, but any variation of course decided upon would result in uncertainty in the minds of farmers, who naturally might hesitate to grow more wheat and so defeat tiie object of the Government in' its desire to make New Zealand self-supporting in respect of its wheat supplies The poultry industry would find it difficult to carry on and pay the cost of wheat, if subject to full duty. This is particularly true of the North Island- “ Therefore, it has been decided that permits, duty free under supervision, will be granted for importations until next harvest of such wheat for fowl

wheat as may be required from time to time, but it is not intended that these permits shall be granted after the next harvest. Under the arrangements decided upon the wheat ? rower should receive the full market price or all the wheat he has to sell, while it is unlikely that the consumer will be called upon to pay anything sxtra for bread. With the exception of the wheat requirements of th© poultry industry, the Government sees no reason to interfere with the ordinary course of business. In dealing with this problem it is imperative not merely to have regard to the present local situation but to recognise that all over the world each country is tending more and more to absorb its own wheat production, and that it is becoming increasingly dangerous for a country like New Zealand to be dependent even partially on overseas supplies.”

GOVERNMENT’S SCHEME. FAL.MEiibj.ON A.. February 23. What will be the real effect of the Government’s wheat and dour scheme? To this question a well-known North Island miller to-day replied as follows: “lhe Australian flour-miller will be delighted since he will capture most of tho trade* while on the other hand all tho various New Zealand interests will suffer. The dairy and poultry industries will have to pay increased prices for pollard and bran, since it will be sold on Australian parity, but more serious than that is the jeopardising of the offal supply itself, since New Zealand will only receive whatever quantity Australia can spare. The southern wheat-grower will also suffer, as his price for wheat is depressed by unprotected and unrestricted importations of Australian flour. Consequently he must accept a correspondingly low price. Only when it gels down to that level can the New Zealand miller buy. Meantime he must close down his mill and pay off his hands. The apparent concession to the North Island poultry man is illusory, for he will immediately pay a higher price for his bran and pollard, and buying from Australia, duty free may not cheapen his wheat cost, for he should later be able to buy even cheaper from the South Island, where wheat prices must eventually come down. “Further, Mr Hawkens’s avowed policy ot stimulating wheat growing defeats itself by depressing wheat values, and. consequently, discouraging wheat growing Whilst, he retains undisturbed the duty on wheat, in order to give confidence to the wheat grower in the stability of the duties, yet he himself breaks that confidence by forthwith suspending the duty on North Island poultry wheat with the aforemen tioned result. The heart of the problem lies here: That Australian flour is now regularly landed in New Zealand costing about £l9, North Island ports. That obviously fixes the selling price of New Zealand flour, which means in the form of wheat, say, 6s 5d per bushel, f.0.b., in tho 6outh, yet that central fact is one Mr Hawken ignores. Instead, he implies in his cleverly worded statement that the wheat growers will get a high price, and there will be plenty of bran and pollard supplies f' dairy and poultry industries, and flour will be unaltered. “In a word, the weak link in Mr Hawken’s scheme is that he assumes the New Zealand flourmiller as a blithering idiot, who although he can oily get some 6s sd, f.0.b., for his wheat will submit to paying 7s. or even higher prices, to the farmer. If he. instead, choses the lesser of two evils, and closes his mill, the result will be stalmate, the farmer awaiting the anticipated high price and the miller waiting for the price to drop to enable him to grist at, a profit Meantime the Australian miller does our flour business, and offal supplies, both in regard to price and supply, are at the mercy of Australia.”

RETENTION OF DUTY. TIMARU, February 23. To a local miller the Hon. O. J. Hawken, Minister of Agriculture, telegraphed to-day as follows: —“Replying to your telegram inquiring if the retention of the duty on wheat will hold until tho 1926-27 wheat crop hecomes available, such is the intention of the Government. ’’

APPOINTMENT APPROVED. CHRISTCHURCH, February 24. The North Canterbury branch of the Farmers' Union to-day discussed the Gov ernment’e announcement on the wheat ques tion The advocates of control scarcely raised a voice against the general chorus ol approval of the new policy, the only adverse comment being that the Government might have gone a step farther and raised the duty on imported flour, in order to make the pro tective duty on wheat fully operative At present they declared the governing factor determining the price of wheat was not the price of imported wheat, plus duty, but the price of imported flour. It was not suggested that the growers ought to receive anything like a price equal to the cost of landing Australian wheat, with the duty added, but it was admitted that the millers might have been given more protection to enable them to pav the higher prices likely to be ruling for locally-grown wheat At the same time the hostile attitude of the millers was criticised by the growers. It was the general opinion that the millers would not buy at much above fis 9d, on trucks, although many sales were reported as already made at 7s. The growers did not take seriously the suggestions made by some millers that they would close down if wheat were unobtainable at certain low prices named.

OBJECTIONS TO GOVERNMENT’S SCHEME. CHRISTCHURCH, February 26. A conference of millers representative of both Islands was held to day in camera. Subsequently a report was issued to the press in which it was stated that the Government scheme provides for legislation differentiating between fowl wheat and milling wheat. Further it was held that the Government scheme deliberately closed the New Zealand mills in favour of the Australian mills.. The report went on to outline the millers’ last minute offer to the Government as follows: (1) The millers guarantee not to increase the present prices of flour, bran, and pollard ; (2) the millers guarantee to pay tho farmers minimum prices of 6s Bd, 6s lOd, and.7s f.ob., and undertake to buy and take delivery of the whole of the crop by June, 1926; (3), the Government to impose the embargo on flour and

import the deficiency of wheat for poultry and milling purposes. The millers claimed the following advantages for their scheme:— (1), the general public was protected, the prices of flour and bread remaining the same; (2), the dairy and poultry industries were benefited—(a), the present favourable prices of £8 for bran and £9 for pollard f.0.b., continued, and (b), the supplies of offal were assured in the country; (3), the New Zealand mills and the workers would be kept going full time. In contrast to the advantages of the millers’ proposals the millers asserted that the Hon. Mr Hawken’s scheme had the following disadvantages(l), a sul> stantial increase in the prices of bran and pollard to the Australian parity of some 30s to 40s per ton and supplies must be seriously jeopardised; (2), differential legislation cancelling the duty on poultry wheat, but imposing it on wheat imported for bread; (3), deliberatey continuing to “protect” New Zealand wheat afteT the New Zealand crop has beei absorbed, charging Is 3d per bushel duty cn Auslraian milling wheat and forcing New Zealand mills to close down and send the wages and manufacturing costs to Australian mills without any advantage to the New Zealand consumer.

MINISTER REPLIES TO MILLERS. “The millers’ scheme means Government interference—in Tact, State control —and we consider that that is inadvisable,” said the Hon. Mr Hawken (Minister of Agriculture) when he was asked by our representative to make a reply to the statements at the conference held in Christchurch on F • ay by representatives of the millers. “My attitude in regard to the wheat question is that we will have to increase our production in New Zealand, ami particularly of primary products,” Mr Hawken stated. “That is where the Minister of Agriculture comes in. There is probably no product that can be increased in quantity so rapidly as wheat. For that reason I consider that the Customs duty of Is 3d per bushel on wheat and £3 per ton on flour should not be interfered with. The House unanimously passed these duties, and in order that the farmers may grow sufficient wheat for the Dominion’s use it seems to me to be necessary that they must have the assurance of a continued policy of protection. It is acknowledged that industries cannot go ahead and flourish if they are interfered with. I see no reason to think that farmers, w their products, should not be treated in exactlv the same way as other industries.” “In the case of fowl wheat a very important industry would be jeopardised if it had to pay the full duty on its poultry food,” the Minister stated. “I do not think that wheat growers, would take any exception to this concession to an allied industry for one season. I view with considerable uneasiness the state of the export and import figures, and it seems to me absolutely necessary that production in the interests of the country generally should be kept up to its highest noint under the present circumstances. It seems quite evident that unless wheatgrowing is not given adequate protection it will go right out of fashion, or, at least, only a negligible quantity will be grown. Such a state of affairs would be disastrous from the point of view of production, and undoubtedly from a miller’s point of view, and it would have a serious effect on the allied industries of poultry raising and pig farming. “The millers’ scheme means Government interference —in fact, State control—-and we consider that is inadvisable. Their scheme is the same as that which existed before, and it is not wanted.” In conclusion, Mr Hawken stated: I hope that sufficient quantities of wheat will be grown during the coming _ son as the Government is giving the wheatgrowers every opportunity to put the business on a payable basis.” LABOUR PARTY’S PROTEST. The following statement on the wheat question as it affects the price of bread has been handed to the press by the Labour Party:— “With a view to giving every encouragement to farmers to grow sufficient wheat for the Dominion requirements—the Government has decided to retain the present duties on wheat, flour bran, and pollard.’ The above is the opening sentence of the most barefaced piece of sectional administration recorded in the history of the Dominion The Government proposes to protect the wheatgrowers’ market by continuing to impose duties on wheat, flour, bran, etc. This protection is to be given on a market which has only half of the Dominion requirements in sight. To understand fully the inquity of the Government proposals the public is urged to examine the statement issued bv the Labour Party on February 12. This statement, m so far as it affected the wheat growers, set out the position concisely and clearly by citing the following facts:1. To ensure a supply of wheat suffi cient for the Dominion requirements the Government entered into an agreement with the wheat growers whereby, on condition of the Government guaranteeing a price per bushel, the growers agreed to plant at least 260,(XX) acres in wheat 2. The wheat growers deliberately broke the agreement with the Government by restricting the area planted. Instad of planting 260.000 acres they planted 160,000 acres only. Having produced a shortage in production by restricting planting, the wheat growers demanded a free market. 3. The Government immediately acceded to the growers’ demands, and now announces that the free market will be protected by continuing the duty of £2 per ton on wheat, £3 per ton on flour, and £1 per ton on bran and pollard. (4) The poultry farmers, realising that the restriction of production among the wheat growers will mean higher prices for wheat, approached the Government, and after consultation between the wheat growers, the poultry farmers, and the millers, the Government announces that wheat for poultry farmers is to be admitted free. (5) The Government finally announces that under the proposals “the wheat grower should receive the full market price for all the wheat that he has to sell, while it is unlikely the consumer will be called upon to pay anything extra for bread.” These facts show that the Government,’ allegedly working to ensure an adequate

wheat supply, has pandered to a small culture), when he was asked by a Daily Times reporter to make a reply to the body of men, who, before the ink was dry on the agreement which they had signed, deliberately initiated a policy that rendered a full supply of wheat impossible. The Government policy of taxing wheat and all its constituent parts is simply a subsidy to the growers of the amount of the duty, this subsidy equalling one penny on every four-pound leaf manufactured. The Government’s apology for levying the duty will not bear examination. To say that the farmer will hesitate to grow more wheat if the duty is removed is sheer humbug. The duty will not pro,duee a single grain of wheat this season. The methods at present employed by the Government will never ensure sufficient wheat being grown for bread-making. To subsidise the body which created the shortage by restricting planting, and then to buy off another section whose protests could be heard in rural circles, may succeed in pacifying .recalcitrant Government supporters; but it will not ensure an adequate supply of wheat. The one person who Ijas not been con suited throughout the negotiations is the bread consumer—the mothers with large families, struggling to make ends meet. The bigger the family the more duty she pays. It already amounts to Id on each 41b loaf; but, in spite of the fact that she is the one'who requires the bread, she has not been consulted. The wheat growers, the millers, the poultry farmers, have all been considered; but bread eonoumers have been left to pay. The statement by the Government that the price of bread is unlikely to be affected will not bear examination. If the poultry farmer is to got his supplies from overseas duty free, and the price of bread is not to be increased, where is the wheat-grower to get his full market price from? It is difficult to understand the reasons actuating the Government. When supplies are in surplus a duty is imposed on imported wheat to ensure payable prices to the grower. When supplies are short the duty is imposed to encourage the grower to plant more wheat. The foregoing statement reveals that: (a) The present, situation is the result of a definite policy to restrict production; (b) this system of restriction is fostered by the Government which has imposed a duty equalling Id per 41b loaf; (o) the imposition of the duty will not produce a single grain of wheat this season; (d) if the wheatgrower is to get a higher price, and the bread-consumer is his only ultimate consumer, the price of bread must advance. Whilst protesting against the Government proposals, the Labour Party, understanding many of the difficulties of the small wheatgrower. will support any proposal that will give tlie growers a fair return for their labour and the service they render the community. The party will also support a legitimate return to the millers and bakers; but the party protests emphatically against any system that will make the mothers’ lot harder, by increasing the price of bread. , Wheat is one of the prime essentials for food, and each country should, as far as possible, endeavour to satisfy its own requirements. If this entails guarantees and price-fixing, the interests of all the people should be considered. An independent commission should be appointed at once to inquire into ways and means of placing the wheat-growing, flour : milling, and breadmaking industries on a permanent basis so that ample supplies shall be available, and legitimate prices paid to all concerned for the service they render to the community. . , In the meantime the price of bread m New Zealand is high, hut the consumers must make their voices heard if they wish it to be kept at its present level. 0U p CANTERBURY AGRICULTURAL RUDGET. (Fhou Oub Own* C3Ebesponoest.> THE WHEAT QUESTION. In Canterbury the all-absorbing topic ha, been in regard to the decision of Cabinet to dr, away with wheat control. the Government has been commended tor the decision The intentions of the Govern ment have been long awaited, and nothing more elaborate las been deemed upon than to leave things as they were. As the Minister of Agriculture announred. it has been decided to maintain the existing duties on imported wheat, flour, bran and nollard, md. as a concession, to the poultry industry, to issue permits, under supervision. for the importation of fowl wheat free of duty for this season, but no longer. The nolicy of the Government is acclaimea as reasonable by Canterbury farmers generally, but of course, there are always men who would have liked more. The State has evidontiv determined to break away from the control of the commercial side of what growing, and ;t is content to provide a fair measure of fiscal protection for those primarily engaged m it. Nothing j, to be done in the direction of fixing prices This phase of the business may vet prove a hurdle to the growers, but it is an obstacle they will have to surmount as best they are able They have been given practically what they asked tor. lne decision of the Government hag not gamed unqualified approval. Different interests have found defects in it already, and the millers are very critical indeed. No doubt others will be‘ found. Those engaged in the poultry industry, for example, that the period for their opportunity to import fowl wheat free of duty is too short to prove very beneficial, and also too muen subjected to supervision. If they should feel disposed to criticise adversely the demand of the local wheatgrowers for protection, they should remember that they themselves can crow very lustily on occasions against the importation of cheap egg-pulp from Asia. The Government seems to have given very fair consideration. and the Hon. O. J. Hawken deserves crectit on the manner in which he has handled the question, and eompos3d the differences of opinion and interests. It will be necessary, however, for the Minister o* Customs to safeguard the allied secondary industry of milling in New Zealand against the dumping of Australian flour in the Dominion. The Minister has ample powers under the anti-dumping legislation to deal effectively with this phase of the question. The duty on flour is hardly sufficient to prevent dumping of Australian flour in a season favourable to Australian production. A good harvest, or at least,

a better one than was expected is being garnered in Canterbury. In the coming season it is hoped that the area sown will show an increase. The altered prospect for wool and latnb will mean that the wheat area will be increased. It is up to the farming community in the wheat* growing districts to maintain production. LARGE STOCK OFFERINGS. With each week there seems to be an increase in the offerings of store sheep. On Wednesday last the yarding in the store division at Addington w'as well over 30,000, but the majority were lambs, though the shipments of North Island ewes were exceptionally heavy. Some of these were of a very good class, but others were quite the reverse, and many pens of the ewes were very light clippers. The northern farmers evidently had been trying out a Border cross, and ewes of this class figured in the lines from one of the northern districts. They did not find favour with the average buyer in the Canterbury province. They were very bare on the points, and naturally the lambgrower wants a fair clip from his ewes. The exceptions were notably good Romney cross ewes, much the same as the Banks Peninsula farmer favours, and these were competed for strongly buyers from that district, as well as from South Canterbury, where the Romney is not looked upon with disfavour. The best line was one of four and sixtoothed ewes, well woolled, looking bright and healthy, and they sold at 32s 6d. The same sheep a year ago would have commanded at least 10s a head more. So it was with most of the ewe-offering: the figures were fully 7s to 10s below the rates ruling at this time in 1925. Forward buyers this year have dropped money all round. Those who bought ewes have been as unfortunate os those who have dabbled in lambs for forward delivery. Numbers of pens of sheep were sold this week which were costing the buyers 8s less than the vendors paid for them on back-country stations at various parts of Poverty Bay, though more sheep than usual were sold directly on account of the station. Various factors appear to be keeping the ewe market down, and one of the most prominent is that farmers are not yet ready to buy their ewes. On many properties lambs have been going off slowly, and there is more stock on the farms than is the rule at this season. The uncertainty of the market has caused many to hold off buying in the belief that bedrock in stock prices has not yet been reached, but the tendency in Canterbury is for the beginning of the big autumn sheep fairs, which will start at Amberley on Monday, to harden values appreciably. Just whether this will happen remains to be seen, but it is a certainty that stocking-up this year is not going to be the costly business that it was last year. Sheep of the class that a farmer buys and keeps for one season only have been very reasonably priced, at the past two sales, unless one has expensive tastes in sheep. Round about 25s has commanded really good sheep. In the crossbred two-tooths 26s to 29s this week bought very fair sheep indeed. Halfbreds are not coming on the market, but one pen of what looked like four and five years old sheep were sold at 30s. They were a fine class even in the wool, and carrying a fair amount of condition. A farmer buying forward lambs this week was rather in the position of the shipwrecked mariner—water all around and none to drink. There were thousands of lambs in the sale, and yet the number fit for putting on rape was very limited. In spite of the fact that the schedule had been reduced since the previous sale, the buyers did not alter the figures they were paying for stores. It was a question of supply. The forward lambs were not available. Dozens of pens of halfbred lambs, only suitable for turning out, were sold round about 12s 6d, and they were from lines in many instances that were the subject of forward sales. Most forward sales were made at nearer twice 12s Gd than the figure realised. The vagaries of the lamb market are worrying the Canterbury farmer at present. There is some uneasiness about the position, but many farmers are not prepared to accept the rates which are being paid, and prefer to freeze on their own account. It will not be surprising if there are further variations in the schedule. Space is being booked by farmers, and if the schedule drops, as some farmers are expecting it to do, there will be pools formed by the stock agencies on behalf of clients.