The Southland Times. PUBLISHED EVERY MORNING. Luceo Non Uro. TUESDAY, JUNE 27, 1933. THE WHEAT CONTROL

Southland Times, Issue 22052, 27 June 1933, Page 4

The Southland Times. PUBLISHED EVERY MORNING. Luceo Non Uro. TUESDAY, JUNE 27, 1933. THE WHEAT CONTROL

Although there does not appear to be any hope of immediate remedy the conditions brought about by the system under which the wheatgrowers are guaranteed prices are under persistent attack and in time some change may be effected. Under this system the home market is protected, and the high rate of exchange operates on all exported wheat. The Auckland Chamber of Commerce has been discussing this matter with the Minister of Finance without obtaining any satisfaction, but Mr Coates recently made some comment on the weakness of a scheme which bolsters prices artificially, especially when, through the encouragement of the scheme, growers have increased their production and produced a surplus. Assistance by subsidy is bad as soon as a surplus appears, but the position is made worse by the fact that the exported surplus must receive the exchange bounty, so that growers may not suffer through having to dump their wheat on a market already over-supplied. The wheat-grower has been singled out for special treatment and this has been secured by legislative action which is dangerous, particularly when there is a surplus to handle. Part of this scheme which is causing some dissatisfaction is the rigid control over purchases from growers. There are growers who have discovered that they cannot dispose of their wheat although they can find a buyer for it. The control exercised by the Wheat Purchase Board is far-reaching and it is accompanied by a scheme of rationing, the effect of which is to limit the purchase which mills can make, and this limitation hits mills outside the combination as well as those within it. Certainly the grading of wheat is an important factor in this business, but there are complaints that wheat which is good enough to grade high cannot be sold to mills within the combination because they do not want it, and cannot be sold to independent mills because they may not purchase it without bringing themselves within the scope of the law. At the same time flour is coming into the country from the United States. It has been stated that Canadian floui’ has been imported, but there is photographic evidence of bags of flour labelled U.S.A., discharged from vessels in the South Island, and presumably these importations have not been confined to one port. Legislative action which brings about a restriction on competition in the domestic market is detrimental to the grower, and the cost of this restrictive scheme has to be borne by the consumer as well as by the producer. If through good organization any section of the industry is able to strengthen its position it is entitled to reap the advantages from its skill; but there should be no legislative basis to these operations, especially when the laws which provide this base for the establishment of restrictive powers prevent the legitimate operation of competition. The Wheat Purchase Board control is yet another instance of the evils resulting from legislative intervention in industry. All these systems of control, backed by legislative compulsion, have proved expensive to the country and they have not been beneficial to the primary industries as a whole. The argument that the wheatgrowing business in particular must be controlled in the interests of the country’s supply of flour and bread has led to the settingup of the Wheat Board, but there seems to be no doubt that the consumer has to pay for it, and that quite a number of growers are now realizing that this control may be anything but advantageous to themselves. New Zealand has seen the quota system develop unwelcome tendencies, and it has witnessed, too, the effect of answers to the high exchange effort; but it has not yet awakened sufficiently to realize that all these artificial aids to

primary industries in the long run re-act adversely on the very people they are designed to assist. There should be a searching inquiry into the operation of the whole scheme of wheat control, with a view to discovering how much the country is paying to assist the wheat-grower and to what extent the wheat-grower is affected adversely by his power to sell in the restricted market when the presence of a surplus increases his difficulties.