WHEAT POOL GAINS MEMBERS.

Star (Christchurch), Issue 18547, 22 August 1928, Page 5

WHEAT POOL GAINS MEMBERS.

CHAIRMAN TELLS OF SUCCESSFUL CANVASS. “ I am astounded at the success of the canvass for members of the wheat pool for handling next year’s harvest,” declared Mr W. W. Mulholland, chairman of directors of the New Zealand Wheatgrowers’ Association, in an address on the proposed wheat pool to a meeting of about fifty farmers at Ciist last night. The speaker warned growers against forward selling of wheat, which practice, he said, was no good to seller or buyer. At the outset Mr Mulholland read the following telegram from the Prime Minister;— I have been interested to learn of the commencement of your association campaign, and send my best wishes for successful results. Generally the objects of the association should make an appeal to wheat growers, and if the organisation is able to assist in the more orderly marketing of our wheat it will be serving a useful purpose and will afford encouragement to the wheatgrowers of the Dominion to provide adequately for the requirements of our own community.

Mr Mulholland said that, prior to bringing the pool into operation, farmers had often been asked by Government officials why they did not organise. Canvassers for the pool reported great success, practically every grower enrolling. It was not a case of a scheme being put on to the farmers, for the latter had definitely voted for the pool by 77 votes to 1 at a conference at Ashburton in May, 1927. The price of wheat, as a rule, fell in the months of March, April and May, at the time when nearly all growers wanted to sell wheat. This caused the market to sag. Buyers were offered more wheat than they could finance or handle, as from 6000 to 8000 growers were anxious to quit at the same time. Individual effort was of no avail in trying to counteract this drift. Speaking of the commandeer period, Mr MuJholland said that even with a Government guarantee of a fixed price the quantity offering began to break the market. The only effective way to sell wheat was to make the 6000 sellers into one.

“ There is danger that the forward buying that is going on will soon reduce the price offered,” said Mr Mulholland. “ I don’t know whether there is any forward selling in this district, but I can tell you the practice does no good tQ either sellers or buyers. I ask you just to keep your heads. From present indications there is likely to be a carry-over of two months’ supply, but that should not worry us The organisation is a limited liability company, purely for growers, and with a capital of £50,000 in £1 shares. One share is represented by ten acres of wheat. The organisation will be a voluntary contract pool. There will be no compulsion. Each grower will be asked to sign a contract for five years, but the shareholders can wind up the company when they wish.”

The speaker said that growers who had agreed to sell forward could join the association, their forward offering being exempt from the contract of the pool. To give growers absolute confidence in joining up it had been, de cided that unless 120,000 acres were signed up any member could withdraw after November 1 or December 1 at the discretion of the directors. “The pool is not going to set up expensive machinery of its own for handling wheat,” continued Mr Mulholland. “ The main object is to get control ol the selling of wheat and minor points can be solved as they crop up. We cannot give a very reliable estimate of the cost of handling, but I should say it will not exceed a halfpenny per bushel. Most of the wheat will be delivered to the final purchaser, generally to the miller. People have an erroneous idea that the organisation will store all the wheat and hand it out as wanted. Handling will be much the same as in the past. Selling will be done in a businesslike manner. Mr Mulholland said that the association would allow a storage rate of a penny per bushel per month till April and a halfpenny per month after that, so as to distribute offerings as much as possible. There would be no price fixing, to use an obnoxious term.

Regarding grading, the speaker said that brokers would be expected to tell growers whether their wheat was fit to go forward. This advice should save to growers as much money as would run the association. The pool would consist of several grades, sorted by a competent officer. “ There is no real system of grading in this country,” continued Mr Mulholland. “ The men known as Government graders are not Government graders. They have a certificate from the Government that they are competent to grade wheat. They are employed by and receive instruc tions from private buyers. Grower.-* have no recourse to buyers to ascertain why their wheat did not come up to standard. Under the pool this will be different. Advances against wheat will be about two-thirds of the ultimate value. The association has power to deduct these overhead charges. These are not likely to exceed a halfpenny per bushel. Canadian pools manage on about a fifth of a penny. Our organisation has power to rate up to a penny a bushel for a reserve fund to supplement the banks' advances on wheat, and to moet such expenses as legal costs. We are on much the same lines as Distributors, Ltd., and you know the heavy legal costs which they had to incur in defending an action.” Mr Mulholland added that one of the most pleasant surprises was the en couraging way in which commercial men had welcomed the pool proposal He had heard the opinion expressed that growers who kept out of the pool would get a better price next-autumn, but the speaker said that the business sense of any who thought so was lower than his.

In answer to questions Mr Mulholland said that a grower could give a chattel security over a growing crop which was given over to the pool. It was expected that at the present rate oi canvass considerably over 200,000 acres would be signed up. It was not the 'policy of the association to force the price of wheat above the value, so consumers need have no fear. It had been said by those in the trade that the Canadian pool had so arranged things that it was dribbling out wheat just as it thought Europe needed it. This, said Mr Mulholland, was opposed to speculation, which could not work except on a fluctuating market. “ I am strongly opposed to the pool,” said Mr S. Smith. “ How many members of Parliament from Cheviot to North Otago are interested in wheat? Only about four, which is small compared with North Island rep. resentation. The Minister of Argiculture has hinted that the duty will come off Australian wheat if a pool is formed Mr Mulholland replied that organisation was the only way in which farmers could overcome the difficulties mentioned by Mr Smith. A vote of thanks was passed to Mr Mulholland.