THE ECONOMICS OF WHEAT GROWING.

Timaru Herald, Volume CXLIII, Issue 20639, 30 January 1937, Page 10

THE ECONOMICS OF WHEAT GROWING.

When the Minister of Industries and Commerce announced with obvious feelings of pride that he could offer the wheat growers a fixed price for the production two seasons ahead, he was courting criticism because he had overlooked the plain economics of the wheat-growing industry. It is one thing to impose a fixed price on the wheat-grower, who has suffered much in the past, at the hands of politicians who did not understand the intricacies associated with the wheat industry, but it is quite another matter to compel the wheat-grower to engage in unremunerative cropping. The Minister of Industries and Commerce has seemingly surrendered to the agitation of certain interests in the North Island, which are determined to secure supplies of wheat at the lowest possible price. At the moment interests hostile to the wheatgrower are in the ascendancy, and plans have been laid by the Minister of Industries and Commerce, to give assurances that for the current season and for next season, the price of wheat will remain at prices that will compel the wheat-grower to consider his postiion. But the Minister of Industries and Commerce has reckoned without economic factors: Competent observers predict that New Zealand’s wheat yield this season will be little more than thirty bushels to the acre, compared with thirty-five and a half last year, and that approximately a million and a half bushels will have to be imported to meet domestic requirements. The Dominion wheat acreage this season is estimated at the low total of 222,000 acres, compared with 252,423 acres last season and 230,523 in 1934-35. In the 1932-33 season the total acreage was 305,924. But the stability of the supply of New Zealand’s needs of the staff of life will not be assured on the wheatgrowing fields of New Zealand, unless the Minister of Industries and Commerce revises his idea of a sound plan for the production of wheat. But because it is impossible to provide for the people’s bread needs from empty wheat fields, it is necessary, if not urgent, that the Minister should look a little deeper into the economics of New Zealand’s wheat supply, before it is too late. It may be suggested that the Government need not worry about the fate of New Zealand's wheat-growers, because in the event of a scarcity next season, the Minister could purchase wheat from overseas markets. It is pertinent to point the Minister to the latest reports coming to New’ Zealand from the wheat-selling centres of the United States (we quote the Chicago Wheat Exchange): “Soaring prices for wheat have been the rule of the world markets for the past week, pushing up prices to the highest for seven years.” It is moreover, pertinent to mention that the reports go on to say that “buying has become more general instead of the reverse as prices advanced.” From day to day in the United States the wheat market is feeling the pressure of European purchases. Says American reports dated December 16: As opportunity offers, it is believed the principal European buyers will take wheat in addition to current needs for building up of emergency supplies. However, under existing conditions it is difficult to see where there will be much chance to accumulate any great quantities. Tremendous buying by Italy has swelled import purchases to such a volume that this year there is no pressure of either Argentine or Australian grain. Reports current this week indicate that Germany will need 37,000,000 bushels of imported wheat owing to small yields and a light carry over from the 1936 crop. If Italy takes 80,000,000 bushels to meet her requirements, as now estimated, it is difficult to see where Germany could buy 37,000,000 bushels of wheat. It is obvious that two factors must be taken into account by the Minister of Industries and Commerce in assessing the national importance of New Zealand’s wheat-growing industry. On the one hand, this country dare not rely on foreign growers for any substantial proportion of its supplies of the staff of life, and on the other hand, wheatgrowing, directly and indirectly, provides more employment in proportion to the scope of its operations than any other industry in the Dominion.