WHEAT GROWING

Dominion, Volume 12, Issue 302, 17 September 1919, Page 10

WHEAT GROWING

AND CONTROL OF PRICES

RESTRICTIONS LEAD TO DISCOURAGE- ■ MENT i i Reference to the growth of wheat in ; tho Dominion, and the control of prices, , was made by Sir James Wilson in the course of his presidential address to tho ' Dominion Conference of tho New Zealand limners' Union yesterday. "Parmers have, as usual, had ( Some success nnd some disappointment, remarked Sir James Wilson. 'In tho-wheat-growing areas tho richer lands Dnvo shewn good yields, and -been payable, although the average yield is put uowu at thirty-four bushels to tho acre, in some favoured localities tho yields have been much higher. Tho Minister of Land* had, I understand, fiity acres ot John Brown wheat, which yielded seventy-eight bushels. This wheat was (ir.-t grown at Marton experimental plot, and has ten a favourite ono in that district. Prior to the war it was calculated that Wore there was any proht in whMt-growing twenty-five bushels had to bo set aside for expenses. Icwlay, taking into account the rise in the price, it would take now about, thirty bushels to pay expenses; so that wlulo tho ugh yields would pay well, there, must have been a great many under thirty busne.s to bring down the average to thirty-tour. On tho average, wheat has paid tins year. If tho above figures are correct the profit may lie reckoned as equal to four bushels. Tho wheat growers well deserve this not by any means large profit per acre, for they have had very adverso seasons and unprofitable .yields for several years lately. Here again the fixing of pficos- has been most unsatisfactory, and only justifiable m war time. Hod tho farmer not been most loyal ami , patriotic tho area in wheat would hove been much curtailed and left to the farmer who owns land known to grow big y' el<j3 ' . , „ . ■ Control of Prices. "Fixing of prices in ordinary times has been often tried, and always failed. A recent writer says of the attempt at Home to do this: 'Tho effort now being.iniwjp to control prices is not an experiment, because an experiment is an act performed to prove or disprove a theory m doubt. There can be no moro doubt about this theory than about that of perpetual motion. The experimental act m this connection has been .many times performed, and always with the same result. Mward the first's Parliament solemnly enacted that tho prico of a goose should bo twopence, and it, no doubt, was so just as long as ono man was wwling and able to sell a goose for that price, these medieval enactments, although no doubt framed with tho best intentions, and in the supposed interests of tho buyer and seller, turned out to be an inconvenience and an injury to both, nnd alter a short and mischievous life ceased.to exist. Let us now consider what genumo remedial measures should be, according to tho rules laid down by every economist who has ever written on the subject. Those rules are: (1) That when demand is in excess of supply, prices will nso; h) that high prices -wiKi stimulate production; (3) that stimulated production will restore tho balance, and that prices will fall. Then our remedy is to stimu- ' late production and facilitate distribution. Last year there was a real shortage of potatocs-partlv due to railway delays. Wo-biow what happened. (1) The prico : of potatoes roso considerably; (2) all tho woivd and his wifo planted potatoes m their back-yards; (3) potatoes returned to their normal price. No potato cards were ' required. Every ton of food raised in ! back-yards relieves tho demand on the farmer. If all the world and his wife 1 provido themselves with potatoes, they ■ do not want to buy potatoes from tho 1 farmer, who gives them to his pigs, and ■ later on sells tlioso potatoes in tho form of pork. It. will thus 'bo seen that tho ; operations in the back-yard indirectly, > but none tho less surely, stimulate the • production of pork. It is clear that the ■ lirst remedial measure must be to stimu- ; Into food production. This is to bo done • automatically by a natural rise in prices, ' and it may bo done further by the re- ; moval of all artificiril. nnd unnecessary i obstruction to production.' "Tt has always been just the same here ■ with wheat; high prices have stimulated I farmers to graw that grain. Kestrictimis • as to price mean discouragement, lou cannot make farmers grow wheat, if it is . not profitable to turn their land to that ' c-op. When the prico of wheat was fixed • there was no fixing of expenses,, and as ' a result expenses rose very materially. A . valuable crop of wheat ready to cut , cannot wait without great loss. So that ' if labour is scarco it can demand such I rates as will deter its growth in the : future."

LAST YEAR'S OPERATIONS FAIR DUAL TO GROAVERS. The Government policy and rpctico in dealing with wheat in New Zealand is dealt with in the .report of the Board of Trade presented to the House ol Representatives yesterday. From November, 1917, to April, 1913, the board was in constant communication with tho Government and the wheatgrowers as to the price of wheat to be fixed for the 1913-19 crop, and eventually an arrangement was come to between tho grower* and the Government at a conference held in Christchurch on April 9, presided over bv the Hon. W. D. S. MacDonald, that the Government should "liaranlee 6<. -W. minimum with nn open market. Had this offer resulted in a sufficient area being grown that could reasonably be relied on to satisfy New Zealand's requirements on the experience of prior years there would have been no necessity to exercise the option over tho second 2,000,000 bushels of Australian wheat. In Da-ember, m view o£ tho fact that the uovernment wero purchasers of Australian wheat, and intended to control the prico of flour and bread, it was impossible to givo effect to tho exact terms of tho arrangement made with, tho farmers, and consequently the Government determined to take over the crop from the farmers at a fixed price of Gs. (Id. per bushel, f.0.b., allowing the usual increments of Jd. per bushel per month from May'to October, and to continue (he scheme of control through the Wheat Control Office, which had worked satisfactorily during the previous year. The schonie as gazetted on February 25, 1919, is in all respects, with the exception of price, identical with the scheme published as an appendix to last year's report, and therefore is not repeated here. The Government has been criticisod for this departure from the arrangement made in April, as it is alleged that, had the original offer, been -adhered to, producers would have not considerably more tli'in Gs. Gd. per bushel f or their wheat. AVhilo it is true thn*the April arrangement was not strictly ahered to. growers of wheat did not suffer thereby. The senson out to be a phenomenal one, and the yield per acre one of the Inchest on record. As most of tho wheat grown was of a Tuscan variety, farmers would probably have found a difficulty in disposing of it at exceeding Gs. -id., the minimum guaranteed by the Government. Furthermorethe price at which Australian wheat could be landed in Auckland (approximately Gs. 5d.) would have determined in a free market the nrico of New Zealand wheat f.o.b. Lytlclton, for clearly the southern millers could not havo afforded to have given, under open market conditions, more than the equivalent of this price f.o.b. southern ports and 'have competed successfully with the Auckland millers in the disposal of their flour. On tho assumption that tho Australian wheat could be landed in Auckland at 6s. 5d., the equivalent prico f.o.b. southern ports for New Zealand wheat would not havo exceeded W. lid. to Gs. Id., according as to whether the Auckland purchasers were able to buy over line or through store. If purchases could be made over line the price of southern wheat would not have exceeded ss. lid., if through storo Gs. Id. Tf allowance is niado for the duty on Australian wheat it would raise the Now Zealand price bv approximately fid.; therefore, It is clear that the Government paid the New Zealand farmer the full market value for his wheat.