POLITICAL TALKS

Sun (Auckland), Volume III, Issue 620, 23 March 1929, Page 27

POLITICAL TALKS

POSITION OF THE WHEAT INDUSTRY A THREATENED CRISIS llfn'lfn Jnr THh. SIX htj D. Jones, 1 M.r.j VII. Prior to the war, wheat was sown in greatly reducing areas, until a large percentage of the grain required for the needs of the Dominion was imported from Australia and other countries. The war in 1914 proved the necessity lor New Zealand to produce its own foodstuffs as far as possible, particularly one so essential as wheat. The Government entered into arrangements with the farmers and guaranteed prices, and also fixed the rates, as far as the millers were concerned, in the production of flour. As a result of this policy, New Zealand became practically independent of outside supplies. When the war was over, the Government desired to be relieved of the responsibility of guaranteeing prices to the wheat farmers. Demands were made for a scale of duties which would secure the continuance of the wheat supply being grown within the Dominion, and when the tariff proposals were before the House the Government adopted a new principle, as tar as duties were concerned. It imposed a duty on wheat, with a sliding k scale, so that if wheat rose in price in countries overseas the duty automatically was reduced in New Zealand, while if the price of overseas wheat, fell the duty on wheat being

imported into New Zealand was increased. The object was to stabilise wheat prices in New Zealand on a basis that would ensure sufficient being grown for our needs, and at the same time safeguarding the public against an increase in prices if wheat became dearer outside the Dominion. This system has secured the objective aimed at, and in the last two seasons sufficient wheat has been grown to supply the whole of the needs of the Dominion, although there has been some importation by millers, who prefer Australian flour for mixing purposes. .1 IJIS(jUIETIXG STATEMF.ST While this has been secured, the price of bread in New Zealand has been reasonable. The newspapers reported a few weeks ago that the price of bread in Sydney was sixpence a 21b loaf when booked, and it is only ?= d in Christchurch. In Auckland it is 7d. The present Government has been considering the question, and a statement was made by the Prime Minister in Canterbury recently which it was understoood would leave the duties as they are. In a statement made last week, however, Sir Joseph Ward announced that Cabinet had considered the question, and decided that the duty on wheat and flour was too high; a reduction would take place after next season’s harvest had been consumed. He added: “The Government is anxious to ensure that in arrangements made for the year following the present season it would do all in its power to prevent the country having to rely upon external supplies of these important commodities.” This statement by the Prime Minister is very disturbing, particularly to South Island agricultural farmers, and reopens once again the whole question of adequate protection for wheat and flour. Wheatgrowing is the most important branch of agricultural farming in the South Island. Many people are surprised that New Zealand cannot

successfully compete with Australia j in the growing and harvesting of j wheat, but it is in the harvesting that New Zealand is at a disadvantage. In Australia, with its very dry, hot climate, and freedom from winds, the grain can be left standing until it is dead ripe. By using their combined \ harvesters, which cut, thresh, and j bag the grain, they reduce the har- j vesting costs (which are so heavy in | New Zealand) to a very trifling j amount. SERIOUS FOR THE SMALL FARMER Apparently the only reason that the Government, is lowering the scale of duties is that, in its opinion, the price of wheat is excessive. Perhaps the best answer to that is that, in the last two seasons, with this scheme operating, only sufficient wheat has been grown to supply the Dominion’s needs, although the harvest has been considerably above the average, particularly last year. This proves that if any less attractive proposition is placed before the wheatgrowers, the area of wheat sown in New Zealand will rapidly decline. It is quite clear that the reduced scale of duties means large importations of either wheat or flour from overseas. The result of such a policy would have far-reaching consequences. The value of the wheat grown for Dominion needs is about £3,000,000, and nearly the whole of this represents payments to labour. I know nothing in connection with agriculture or manufacturing where the proportion of labour to the value of the product is greater than in connection with the growing of grain, and the effect of materially reducing the area sown in grain in New Zealand would be to throw out of employment many hundreds of men, largely unskilled, as far as any other trade is concerned. The system of farming in small holdings in Canterbury is mainly developed through sheep-grazing and graingrowing combined. With the average 150-250-acre farm, it is not possible for the farmers to keep sufficient sheep to make a living, but when both are combined, and reasonable prices assured, then successful farming can be carried on, and employment found for the farmer and his family, and much additional labour. If then we seriously decrease the area in wheat, the system of small holdings in Canterbury and Otago becomes unprofitable. The small holding in the North Island is made successful through dairying, but the South Island, except in favoured spots, is not suitable for dairying, and consequently wheatgrowing must take its place, or the land will revert to grazing. Wrapped up with the growing of wheat is the agricultural implement industry and flourmilling. If the duty on wheat is to be put at such a price that wheatgrowing becomes unprofitable, the flourmiller has no right to ask for protection against Australian wheat being brought into New Zealand —he can only claim a reasonable protection on the grounds that the wheatgrower is obtaining a similar advantage. If the duty on wheat goes, the duty on flour must go also. And the Government has got to take into consideration, particularly with the amount of unemployment that is now in New Zealand, the question of whether the country can afford further to increase unemployment by their suggested line of action. The action would be similar to the British Labour Party taking off the McKenna duties and throwing out of employment a great body of workers —which policy was afterwards reversed by Mr. Baldwin, with very satisfactory results to Great Britain. BATTUE ROYAL LOOMING The question will reopen the whole matter of protection in New Zealand. Take as an illustration the boot industry, which has a duty of from 25 to 30 per cent, to-day. The boot bill of the ordinary family in New Zealand is greater than the bread bill, and what grounds could the manufacturer of boots have for asking for a continuance of the duty on boots if the wheatgrower is refused a much less advantage on wheat? The same thing applies to the whole of the manufacturing industries, and unquestionably the farmer will demand free trade for the things he uses if he is to be refused reasonable protection for the products that he grows. The Prime Minister stated that he hoped the farmer would grow sufficient wheat to satisfy our needs, but if this is made unprofitable, the farmer will no longer be able to afford it, nor can he be reasonably expected to do so; consequently a Bill would require to be introduced dealing with the wheat duties. This opens up the whole tariff question, and would mean a battle royal on the floor of the House between the manufacturing interests and the country. It seems unfortunate that the matter should be raised at the present moment. No one is suffering hardship because of the price of bread — it is by far the cheapest food in the Dominion. What other food can be placed on our table at 3d a lb, all cooked and ready for use? There are sections of the community who, without much consideration, make a great deal more of the bread question than is justifiable, and it would be a great advantage if a careful review of the whole position were placed before the public in order that they might recognise the value of the wheat industry to the whole of the people of this Dominion. I believe they would then realise that the present system of sliding scale duties at the rates laid down in the Act are in the interests not only of the wheatgrower, but of all the people. This is a question, as I have pointed out, in which the manufacturers and their employees are vitally interested, because it will probably affect the whole of the future protectionist policy of the Dominion.