PRICE OF FLOUR AND WHEAT

Press, Volume LXXIV, Issue 22515, 24 September 1938, Page 19

PRICE OF FLOUR AND WHEAT

Government’s Plan Outlined ADDRESS BY HON. D. G. / SULLIVAN [THE PRESS Special Semce.l GERALDINE, September 23. “Here in New Zealand, under a Labour Government, we have devised the most satisfactory, complete, and workable system of handling wheat in the world,” said the Hon. D. G. Sullivan Minister for Industries and Commerce, speaking to a gathering of about 350 at Geraldine this evening. “The scheme,” he said, “has given entire satisfaction to all three sections of the industry. The wheat-growers, flour-millers, and bakers all expressed themselves as being very pleased with the present scheme, and they would no* voluntarily return to the conditions which obtained before 1936.” The Minister said that he had long realised the importance of the industry both from the economic and defence fISDCCIS. The attitude of some Nationalist members in the North Island was that the country should not support or subsidise the industry, but that it should stand on its own feet, said Mr Sullivan. Critics on the Nationalist side, particularly from the North Island, and one from the South Island, had cnticised New Zealand-grown wheat as unsuitable, and one member had described it as the worst in the world. While Opposition members had taken a querulous and critical atttiude, said Mr Sullivan, he felt pleased with what he had done towards the stabilisation of an industry which was m a chaotic state when he became Minister for Industries and Commerce Outlining the problems of the wheat industry during the last 10 years, Mr Sullivan traversed the steps that had been taken by previous admimstrations. First the sliding scale of duties was introduced, which failed to achieve its purpose; then a voluntary pool of growers was set up which operated for three years, and succeeded in maintaining the price only at the expense of those growers who were members. At the end of 1931 a voluntary agreement was entered into between representatives of all growers and the millers, and a marketing organisation was set up to handle the harvest. At the end of 1932 the millers and growers together approached the Government of the day requesting jX to introduce a compulsory scheme.

Wheat Purchase Board The Wheat Purchase Board which was set up before the 1933 harvest and operated until 1935, _ stabilised prices in New Zealand, but it Was ineffective against import competition. Price wars caused violent fluctuations of the price of flour, and threatened some millers with ruin. The bread trade was similarly disorganised and competition from price cutters was threatening ruin to a large number of bakers. The Labour Plan When the Labour Government came into power both the milling and the baking industries were in a chaotic condition, which threatened bakers and millers alike, with bankruptcy. In February, 1936, the Labour Government’s scheme was introduced, and it provided for the organisation of the three industries as independent parts of the one major industry. An increase in the price of wheat for the 1936 season was announced immediately, an embargo was placed on imports of flour, and the country’s needs from abroad had since been brought in, in the form of wheat, controlled for the Government by the Wheat Committee. The price of flour was fixed at a level which gave an effient miller a fair return, after meeting costs of wheat and reasonable expenses for the conversion of the wheat into flour. Hie price of flour was restored to its former level in those districts where the price war had forced it to unpayable levels. In other places it was possible to reduce the price and leave a reasonable profit to millers. Basic Price Raised A price investigation committee was set up to inquire into the costs of wheatgrowing, and as a result of the committee’s recommendations the-basic price for the 1936-37 crop was increased to 5s 3d a bushel. In August, 1937, he toured the main wheatgrowing districts, the Minister said, and met many of the growers, and subsequently had a further survey of wheatgrowing costs made. After taking into account the increased costs, a further increase in the basic price was made to 5s 9d a bushel for the 1937-38 season. In fixing the price consideration was given to the fact that a very heavy burden of work fell on the womenfolk at certain busy periods of the wheatgrowing year, and the price included an allowance for domestic help. The Dominion wheat requirements were approximately 920.000 bushels, including 7,000,000 bushels of milling wheat, 500.000 bushels of seed wheat, and 1.700.000 of feed wheat.

“Bad weather caused short crops in 1937 and 1938, and it is anticipated that the next year’s crop will similarly fall short of requirements. In these circumstances importations of wheat have been necessary. Importations in recent years, both before and after the inauguration of the present scheme, have been as follows:—l 933, 890,885 bushels; 1934, 111,895; 1935, 224,702’ 1936, 406,882; 1937, 2,476,315. “It is anticipated that the figures for the current season will be close to 4,000,000 bushels. Shortages have been due entirely to extremely wet weather, which has prevented the soil fyom reaching the condition in which it can be worked. ” “To meet the cost of higher flour and wheat prices without increasing the price of bread, the wheat industry has been subsidised by the Government,” the Minister said. “The actual cost of the subsidy during the 1937-38 financial year was £165,574. It is estimated that the cost this* year will be £IBO,OOO. The smallest increase that can be made in the price of bread with our currency is id a 21b loaf. If this increase were made the cost to the public in one year would be approximately £300,000; so that by kegping the price of bread at its present level and subsidising the wheat industry, a very substantial saving to the general public has been made.”

ADDRESS BY PRIME MINISTER The Prime Minister (the Rt. Hon. M. J. Savage) will speak in the King Edward Barracks next Tuesday at 8 p.m. Seating to accommodate about 2700 people will be provided. Electors are advised to be there early. The Mayor (Mr R. M. Macfarlane) will preside. MR A. S. LYONS AT DOYLESTON Mr A. S. Lyons, Independent candidate for Mid-Canterbury, was given an attentive hearing when he-addressed a meeting at Doyleston last evening. There was a good attendance, presided over by Mr R. A. Batt. A vote of thanks was accorded the candidate.