BULK PURCHASE.

Waikato Times, Volume 108, Issue 18166, 3 November 1930, Page 15

BULK PURCHASE.

BRITISH LABOUR POLICY. IMPORT BOARD’S POWERS. , CONTRACTS WITH DOMINIONS. By Mr E. F. Wise. C.B. (Labour M.P. for Leicester.) The British Government’s decision to include on the the Imperial Conference the question of import boards and bulk purchasing for Dominion produce constitutes a very important .stage in the development of Imperial relations, and in the Labour Party’s attitude toward Imperia 1 problems. For three or four years the stabilisation of prices of imported agricultural produce has figured in the Labour Party policy and has been expounded in several special publications on the subject, and the proposal has a definite place in the party programme as outlined in Labour and the Nation. During, the present Parlia*r ment, the Government, because of its minority position in. the House of Commons, has not carried into effect this part of its avowed programme. But the course of events has now brought this matter to the forefront of the political situation. British Agriculture. : T" ; British farming—which even in industrialised Britain still accounts for a large volume of the national economic activity—is faced with grave difficulties. These are due to various causes, including the general fall in price levels, but the dumping of agricultural produce from Germany and France and the consequent financial embarrassment to arable farming in Great Britain cannot pass unnoticed. It is this form of competition, besides the general distress of farming, which has brought into prominence the question of import boards for agricultural produce, but the idea of import boards had already formed part of a definite programme of stabilising prices, even in comparatively normal times, as an integral part of the reorganisation of British farming. With the exceptional difficulties now facing farmers, the Government and others have been forced to give closer attention to import boards as a factor in an agricultural revival. Yet another matter has brought this question Into’prominence. Lord Beaverbrook’s campaign for the greater expansion of inter-imperial trade has naturally called attention to this particular method of intensifying Empire trade. Those who consider Lord Beaverbrook’s scheme inadequate in detail and vague ip its concrete proposals for bulk purchasing of Empire produce which seems so logical and natural a development In these days of large scale business. Moreover, those who seek definite means of developing trade must. naturally prefer a specially-created organ consciously and continually carrying out such a programme rather than tariffs which are a clumsy, vague and primitive method of directing trade. Powerful Bargaining Agency. By centralising and co-ordinating the -'sspnfinl supplies needed by Britain i h rough bulk purchasing organisations. a powerful agency Is created r nr bargaining in matters of overseas ♦rade and thus the nation has a definite instrument for increasing its export trade. This aspect of import boards is a direct and straightforward alternative toy Lord Beavebrook’s complicated and-,indefinite scheme of .reciprocal tariffs. But bulk purchasing is« a bigger and more comprehensive scheme than Lord Beaverbrook’s limited conception for Empire trade, because import boardg will deal with foreign trade as well as Empire trade and thereby offer a meafis of systematising directly and Increasing indirectly all British trade whether with the Dominions or with foreign countries.' It must not be overlooked that British trade with, for example, South \merica, China and Russia is vitally 'important to this country, and in some cases it is much more profitable than Empire trade. Import boards will in no way diminish this important foreign trade.

It is, of course, obvious that because of. racial affinities sentimental preference and close inter-imperial banking relationships long 7 term contracts for purchase would be ’comparatively easy to arrange for Dominion wheat, maize, wool or meat. For the same reasons it would be comparatively easy to arrange with the Dominions that, in return for their products, they in turn should enter Upon satisfactory contracts for (the purchase of British goods. Trading within the Empire offers certain natural advantages for satisfactory reciprocal trade purchase agrgeements, but with certain major commodities passing through defined and controllable channels such as import boards it becomes simpler to make definite contracts by different types of goods with foreign countries on a quid pro quo basis.

Interests of Consumers. ''TOWWW

The import board scheme has been worked out in the greatest detail 'in the case of wheat. For this international commodity the need for systematised long-term purchasing is urgent. As is well known, the wheat market has been passing through a very difficult time and has become completely disorganised. It is noteworthy that in spite of these difficulMps sellers continue to organise themselves. Rumania and Jugoslavia are forming selling boards, and Austria is centralising her purchasing as a consequence. It is high time that the main consuming countries systematised their side of international trading.

Broadly speaking, the problem of a wheat market board is comparatively simple, an account of two factors. Britain’s annual consumption of wheat ! s known, and it is very steady from vear to year; so the hoard would know, within fairly definite limits, how much to buy. Secondly, because of the constant flow' of demand, the hoard wmuld be receiving a regular cash income, and this would enable it to obtain bankers’ credits for its purchases without.any difficulty. The financial aspect of the hoard’s activity wmuld follow' the simplest form of foreign trading through ordinary everyday banking facilities. In so far as it. wmuld be a trading organisation fhe board would be looked upon as a good client by the banks hut with the addition of a Treasury guarantee as an exceptionally good client. i Stabilisation of Prices. Import boards, it may be said in conclusion, perform three important functions. The first and direct function is to stabilise prices over a period of vears, the primary object of this

being to give security to farmers. Secondly, by controlling and systematising trade, a bargaining strength is created for establishing satisfactory trading agreements with overseas countries, and this includes the development of trade both wdth the Dominions and other countries. Thirdly, by rationalising the import trade costs W’ill be reduced, and by making a public corporation responsible for this trade the consuming public is protected. Bulk purchasing will be to he the central topic of interest at the Economic Conference to be held in October, and if, by agreement with the Dominion, import boards are set up, more will have been done in a few weeks for bidding up the economio ) betterment of the Empire than lias been accomplished in the last- ten years. Not only this, but by the creation of import boards for the principal agricultural products, the menace of dumping in England wil have been eliminated and an effective machinery j created for stimulating reciprocal trade ■, between industrial Britain and tbc agri- | cultural countries of the world, and this surely is a basis for a return to economic prosperity.