The Wheat Industry of New Zealand

Sun (Auckland), Volume III, Issue 922, 15 March 1930, Page 17

The Wheat Industry of New Zealand

|f Farmers’ Share of the Four - Pound Loaf, Costing a Shilling , 'x is Less Than Four Pence. J

The garnering of the Dominion’s wheat harvest is now in full swing throughout the length and breadth of the wheat belt which extends practically from the Hurunui River in North Canterbury to Oamaru in North Otago. This informative article on the position of the wheat industry has been specially written for THE SUN by Mr. David Jones, M.P., the chairman of the New Zealand Meat Producers’ Board.

' * R^ h y another I a t bread is the i ptaff of life. This statement has become j in the mind of man .and I wily politicians, searching for a battle [ er v usually put cheap bread well in the ; foreground. Many years ago, a candi-! date for Parliament in England, put in ! flaming letters s t the head of his plac- j ards: “Cheap bread and beer for no- 1 thing.” The chief reason why this cry j of cheap bread has been so disturbing j \s through lack of knowledge. Con- j sumers have no easy means of investi- j mating the facts even if they desire to ! ” _ I do so. They feel the burden of increased coots generally, and when appearances are against the wheatgrower the position is frequently accepted without further enquiry. A review of the whole question as it affects the wheatgrower, the consumer, and the Dominion generally should be of value. As a matter of general policy every country should be self supporting as far as its chief foodstuff's are concerned, unless the added costs would be serious. There are certain risks that must be considered in a policy that would leave us dependent on importations for such an important item of food as wheat. War is not abolished

and on many occasions shipping trans- j port has been seriously interfered with by strikes. It is unquestionably a val- j nable safeguard to the whole commun- ■ ity to grow within its own borders the . 9 to 10 million bushels of wheat that are annually required in New Zealand. j An insurance policy is always of great j value and we pay for it. On this point it is interesting to note that in the report of the British Economic Mission to Australia (page 21, Paragraph 49), they say: — Objects of a protective tariff: We realise that the objects of a protective tariff are not purely economic and that a protective policy may be adopted in part at least on other grounds. A young nation may feel that from the point of view of the dangers to which she may be exposed in case ! of war, she cannot afford the risk j of being deprived of essential com- j modities by interruption of over- | seas communication. The policy of all the political parties] in the House with the exception of thej Country Party member favours reason-; able protection, and no industry has a j stronger claim than wheat. If we I nn entirely free trade policy the wheat-J grower would compete with outside supplies, but the protective policy of the i dominion which is for the dual purpose of revenue and the encouragement of manufacturing industries, places ad* ditional costs ou the wheatgrower and nil the kindred industries and workers. He is entitled to receive some compensating measure of protection to equalise this burden, which is a con- j siderable one. This factor is becoming widely recognised in the countries of the world that have adopted protective j policies. Can t) te fanner on wheatgrowing | 'and successfully farm present areas, without wheatT The view is widely held that the j can turn his land to other , purposes that would be just as profit-j

i able as wheat. As one who has farmed in both Islands, I can quite understand the North Island farmer would i consider this view correct. Topdress- ] ing and a splendid rainfall makes him : independent of the plough, and small i t' arr ns can be profitably held for dairy]mg alone. Farm implements, maehinI ery and horses are a small factor in the total costs of his farming operations. J The farmers in Canterbury and North : Otago, which may be referred to as | the wheat belt of New Zealand, have j an entirely different set of conditions, j The rainfall is insufficient to make 1 dairying profitable by itself except on i the very heavy land. Owing to climatic i and soil conditions the great bulk of I the wheat lands are quite unsuitable ! for dairying. The rainfall is iuade- , quate to produce the results from topdressing that are obtainable in the North. While it pays and increases the life of the pasture, still permanent pasture is almost unknown. Mr. A. H. Cockayne, Director of the Fields Division of the Department of Agricul- ’ ture, in giving evidence before the Select Committee of the House last ! session, said: • The Department of Agriculture is , j rather keen in a way to place this definite fact before the Committee —that in order to produce a suffic- . ! ieney of young grass in Canterbury and North Otago, it is neces- ’ sary to crop. The elimination of [ i the wheat group out of the Can-

terbury Farmers’ programme would reduce the acreages dealt with by the farm teams, and it would increase enormously the cost of production of those other special crops that come *n the farmers programme, and which are essentially concerned in the fattening of lambs, and such like. Therefoic, it can be fairly well stated that irrespective of any other consideration, fiscal or otherwise, it is essential that the Canterbury farmers should grow wheat.

Wheatgrowing is an integral part of the system of farming adopted after! long experience over the arable lands j of the South Island, and any diasticj alteration must take into consideration j the far reaching effects upon several i thousand farmers and their employees,! as well as its effect upon land settle-J ment, transport, unemployment, and thej numerous other industries and prob-j lems that are wrapped up in it. Wheat is mainly grown on the small and moderate sized-farms and out of 1,460 crop returns, the following analysis was made: — Per Growers Acreage. -SI 39:S Growing under 30 acres 63.3 Growing under 50 acres! 507 34.7 Growing over 50 acres! p Growing over 100 acres I 4.S the dairy farm trains and keeps; employed at 'home the dairyfarmer’s faruilv, so wheat enables the agricultural farmer to provide work for himself and his family on the farm. Many thousands of the best settlers in the Dominion are .he product ot this system. if these small farms were turned to sheep they would not be ot sufficient area to provide a living for the former, and the members of his family would have to leave home and look for other employment. The large farmerhave a remedy in sheep: not so the small farmer and the net result would

be aggregation of land and unemployment. Wheatgrowing has had some measure of protection ror man\‘ years. ’’Vheatgrowing has woven itself into the whole system of agricultural farming in the South Island, and any alteration in duty must take these facts into consideration. It was the full presentation of these truths that impressed the Committee and the House i ast session with the magnitude and < complexity of the interests involved.

The Rotation of Farming The successful farmer on agricultural land has a well ordered system of rotation suited to his class of land, and unless prices become a disturbing factor there is not a wide variation. His power and plant are such as to cope with this, and the nearer he can get to full continuous service the better his costs come out at the end of the year. The rotation on wheatgrowing farms runs from three to six years, and the essential thing for the reasonable security of the wheatgrower is a policy that will give stability and continuity in order to allow him to give effect to the scientific rotation of crops and the purchase of such up-to-date machinery as is necessary for economical working. It will, therefore, be realised that a system of farming which requires a special and expensive working plant and the skilful mapping out of work years ahead cannot be altered or abandoned at will.

What are the financial interests in voiced in the wheat industry?

When the wheat question is discussed it is frequently referred to as affecting a few wheatgrowers, but the magnitude of the interests involved rarely, if ever, comes into the picture. It is difficult to get an accurate account of the plant and machinery employed on the farms of the 6,000 wheat growers. An up-to-date farmer growing 150 acres of wheat annually would need a plant used in its production of at least £1,500, but if we take £350 as the cost of the average farmer’s plant, and that is not an excessive estimate, the total would be £2,100,000 This is only a part of the cost. The flour-milling industry has plant and machinery at work to the value of £400,000. ' The implement maker, blacksmith, saddler, tanner, engineer, transport, fertiliser manufacturer, flax miller, binder twine manufacturer are

all part of the long chain whose welfare is wrapped up with wheat growing. It indirectly employs workers in all New Zealand industries and con-

tributes largely toward the protection many of them enjoy. For many years successive Governments have recognised the justice and equity of the protection given by vary-

ing methods, none ot* these being equal to the average protection given to manufacturing industries. The wheatgrower sail claim that the whole policy of land settlement in Canterbury and Otago has been moulded with a view to its continuance. He can claim that he has responded and grown sufficient areas -—if favourable seasons are given—to satisfy reasonably the Dominion requirements. To do this he lias sunk millions in land, plant, machinery, education and research to satisfy the Dominion’s need, as well as turn to the most profitable use a huge area of land, specially adapted by Nature for this purpose. Wheat is Mostly Labour There are very few, if any, of the main products of the Dominion that employ as much labour as wheat and flour. The plough should be put into the field in December, and the crox> reaped in January or February of the next year and an immense amount of labour is employed. The annual requirement for the Dominion is between 9 and 10 million bushels. The average crop over a period of 10 years is about 32 bushels an acre; so that avo require 300,000 acres of Avheat to be soavii every year to supply our needs. To grow this Avith the ordinary rotation of crops a million acres of good, agricultural land Avould be insufficient.

Dr. Hilgendorf estimated that grain growing as compared to sheep, emx>loys an additional permanent man each 200 acres or 1,500 additional permanent hands for 300,000 acres of Avheat. This Avould be a big army to turn loose.

Could they be as profitably employed j at any other work? But this is only j part of the story, as not less than j, £.200,000 a year is spent in casual lab-1 our, besides handling cost. Motor and

tractor transport to raihvay stations, and the haulage of 10,000,000 bushels of wheat over our railways are all important factors that cannot be lightly i pushed aside. There are 52 grain mills • emxfloyiug 697 employees and paying in 5 Avages and salaries £176,000 per an- » num. They also grind oatmeal, but i the figures are not shoAvn separately. ■ There are many industries that I have : previously referred to as being related, ■ but it is not x>ossible to give accurate • data on these x>oi n ts. HoAve\ T er, suf- ' ficient has been given to demonstrate its , importance. The Sliding Scale of Duty on Wheat ! Prior to the sliding scale of duties ; coming into force in 1927, the a Average L duty on flour was £3 a ton. In 1928 • the average duty under the sliding scale > AA-as £2 10s 7d a ton, and for the first i 6 months of 1929 it Avas £2 19s 7d a : ;on, that is for flour. The sliding scale - of duty is as follows:

With respect to the duly on wheat: It depends upon the current domestic Aalue at the port of export to NeAv r Zealand, and the A*alue of 5s 6d a bushel is taken as the basis. If the A*alue is os 6d a bushel the duty is Is 3d a bushel, and the duty rises and falls by a bushel for every 4d by Avhich the value falls or rises. With res£>ect to flour, the duty again depends upon the current domestic value at the port of export to New Zealand; £l3 10s for a short ton is taken as the basis; when the value is *£l3 10s, the duty is £3 10s a ton. The duty rises and falls by Is a ton for every Is by Avliich the A*alue falls or rises. There is one difference betA\-een flour and Avheat. With respect to flour, if the difference between the current domestic A r aluo at the port of and the f.o.b. export cash price is more than £ 1 ss, then the basis of duty is the f.o.b. price plus £1 ss. That is taken as the current domestic value. The basis was arrived at after a very complete Investigation of the facts and was gi\ T en for the of the consumer as Avell as the wheat - groAver; in spite of all the discussion and criticism, the average rafe of duty

has not been more than under the old fixed duty, but it has giA*en a more certain kind of protection, and its results* Avheu investigated, must be A*ery satisfying to the general community. Bran and Pollard Another reason AA'hy New Zealand should be self-supporting as far at ite ! wheat requirements are concerned is ! the dependence of the dairying, pig, land poultry industries in New Zealand lon the Dominion supplies of bran and ] pollard. New Zealand mills x )ro( l uce ! and sell annually in New Zealand for eonsumx>tion by the dairying, pig, and poultry industries over 50,000 tons of bran and pollard an d 5,000 tons of meal (estimated). The importations of bran and pollard are eomparati\*ely small as the following table for the X>ast four calendar years shows: 1926, 5,570 tons 1927, 2,555 tons 1928, 1,730 tons 1929,* 2,527 tons * For 6 months January to June. This gives an average, excluding the half year, of 3,395 tons per annum or a percentage of 5.51 of annual requirements.

It is all very Avell to say that if bran and pollard are not manufactured in the Dominion they can be imported, but this is not so. We could get no regular supply. There is plenty of evidence that bran and pollard have often been unobtainable at any price. Australia's exportable surplus over ten years, 1918-27, amounted to an average of just under 10,000 tons a year. It therefore follows that if New Zealand had gone on the Australian market for the total exportable surplus of Australia, the demand AA'ould have been five times as great as the supply. As a result, competition must have forced Ncav Zealand to pay an unknown but extortionate price for the a\’ailable supply, and four-fifths of New Zealand’s requirements could not have been satisfied by Australia at all.

The total exportable surplus of Canada and the United States of America, together, is less than Australian export. Wo should be certain that there is a sufficient source of supply available to satisfy our groAving demands before Ave attempt to destroy our internal supplies. Expert evidence given on the poultry problem states that a proper proportion of bran and pollard to be fed to poultry is 20 per cent, of the total ration; so we see how important it is as part of a balance ration in the poultry yard and lioav necessary it is to ensure a certainty of supply, and that cannot be obtained outside the Dominion.

Is the Farmer Being Paid A n Un reasonable Price ?

dence ‘goes to pro A-e that; the actual' cost is about 5s 4d a bushel on rail, j It would take up too much space to go into all the details. In the cost nothing is allowed for the depreciation : of the soil and AA’heat is an exhausting, crop. The Department of Agriculture ; of South Australia, in its Bulletin No. 226, shows the cost of Avheat glowing at its Turretficld experimental farm. The average costs from 1922 1 to 1928 Avere 4s 9d a bushel on the : farm, Avith a railage to port of an ad- | ditional 5d a bushel. Australia quotes a loAver price for flour for export than for local consumption, consequently before the sliding scale of duties came into operation the Ne%\* Zealand farmer had to compete with what was virtually dumped flour. A dumping duty AAas imposed, but it is exceedingly difficult to make a dumpiing duty effective. With the a\-erage cost of i production in the Dominion round about 5s 4d a bushel, and the aA*erage price paid to the farmer for prime melloAv j Tuscan Avheat round about 5s 8d on rail, 1 surely it Avill be conceded that the ! wheatgroAver could not farm on a loAAer margin of profit. The Wheat Research Institute After the sliding scale of duties became effectiAc the wheatgroAver considered that his business was put upou a permanent basis, and promoted legislation to make every groAver pay a small levy on his annual production for, research purposes. The millers and ; bakers also contribute. This institute is rendering \-aluable ser\*ice. Breed- [ ing for quality has been impossible ■ in the past because there Avas no means j of testing the quality of new wheats. J Hundreds of A-arieties of A\*heat are j groAvn in plant breeding, and it is j necessary to test the quality of the j wheat Avhen only a handful exists. That ! apparatus today is in the Dominion] at Avork under a specialist, and it is j to secure Avheats that give a : higher yield and an improved milling j quality. In considering the Avorth of the AA'heat industry to the Dominion we ha\'e groA\*n accustomed to A*aluing it by itself Avithout taking into consideration the effect its discontinuance Avould liaA-e upon the production and price of our export of frozen meat, particularly lamb and pork. Britain is x ,ra ctically our only market for frozen meat with the exception of beef. America has taken certain small quantities, but it is an uncertain market. The British market is not ours alone, and Avith the continuous increase in exx>orts from our competitors added to our oavii, it must make us pause. In 1915, the total frozen lamb imported into Britain was 5,493,000 carcases. Last year the imports were 11,500,000 carcases, or more than double in 15 years. Eor several years before the war avc exported from three to three and a half million carcases annually. This greAV sloavlv to less than million in 1925. but Ave have been increasing by nearly half a million carcases yearly. Those of us

No one can be supplied with goods beloAV the cost of production for very long, while high prices induce overproduction. The acid test as to whether the AA'heatgrower is getting too much for his AA'heat can be proved by looking up the records. It is only the fact that Ave have had tAvo record harvest; yields, OAVing to a bountiful rainfall, that has given us sufficient wheat in the Dominion to sux>ply our oavh needs; indeed there has been a surplus, but there is a droj> in the acreage this year, and Ave shall have no more tlnm will supply our requirements. The cost of groAving Avheat in the Dominion has been closely investigated from many sources, and the Aveight of evi-

'who have to watch the markets and ! regulate shipments overseas are becornI ing concerned about the future. Las* year we exported 6,000,000 carcases o: 1 lamb alone, and this year there will be , i further increase. If we turn the ; wheat areas into lamb production it means another increase of nearly one million carcases annually ir our export, j It is difficult to see how this could take place without*reducing prices, and the effect of lower prices for our meat would affect every sheepfc.rmer in the Dominion and indirectly the whole of the people. With our improved farming. topdressing, and the breaking in of new land we want to broaden, in every way that is economically pos- > sible, the base upon which our primary production reets. Anything that ea n ext end our ag rc u Itur U pro< 1 nction should be eagerly sought after and | developed. , When Great Britain closed her doors to Continental pork because of the prevalence of foot aiul mouth disease, 1 a promising market opeued up to the | Dominion. It is recognised that the I by-products of the wheat industry are ' an important factor in pig production and fattening. Theee cannot be obi tained from overseas except occasion* { ally, and the experience of other coun- ! tries is the same as ours, namely, that if you want bran and pollard you ; must produce your own. Is the Consumer Getting a Square Deal? I Any review of the wheat question ; which does not give full weight to the I consumers’ point of view would be incomplete. The consumer is entitled to ; ask whether he is being asked to carry i an unfair load, or whether, in the light ! of all the evidence, it is fair and cquit ; able. The price charged for bread { in the four chief cities as shown in I the commission's evidence is for cash lover the counter. Dunedin, lid; Christchurch, Is; Wellington, Is; i Auckland, Is Id. Booked prices show an increase, and there is also higher price for delivery. It is exceedingly interesting and valu able to study the official statistics of the Department of Industries ami Commerce relating to prices of bread ruling in various parts of the world ! in August, 1929. They' disclose striking ■ facts. Reducing the prices to the equivalent of English money' and bas- ' ing them in all cases on a lib loaf, we i find the following were the prices per 5 lb. 4 months ago: Eon don, 2 id; : Edinburgh, 2<pf; Dunedin, 2Jd. Average i for Australia taken over a large nuin- .* ber of cities, 2Jd: Wellington, 3d; rj Christchurch, 3d; Auckland. 3|d; Tor t onto, 4d; New York, 4LI; Chicago, fid. 1 Canada is sometimes called the granary sof the Empire. Its export of wheat is - enormous, and yet bread is much 3 dearer there than it is in London or l| New Zealand. Even in Germany' bread i is 3| a lb. It is significant that - j where wages are low, as for instance o | Great Britain, bread is cheapest, while ej in America, where wages are highest, rt | bread is dearest. When we take into s 1 consideration New Zealand wages it

must be admitted that we have relatively as cheap bread in the Dominion as in any part of the world. Also no country has better quality and value. One Wellington firm spends £2,000 « year on milk to improve the quality of its bread. The point not generally recognised is that bread is nearly all labour. Wheat, to begin with, is mostly labour, and flour is not by any means the most important price facto' in a loaf of bread. The value on the farm for the wheat actually in a 41b loaf is less than 4d. If the farmer gave the wheat for nothing bread would still be over lid delivered in Auckland, and over lOd in Christchurch. If the whole of the present duty were taken off wheat and flour it would not reduce the cost of living of the average family 6d per week. Not one packet of cigarettes. As the duty is on a sliding scale the consumer is protected because if flour increases in price overseas, the duty falls by that amount and there is no increase in the price )f bread. The cost of delivery of the tlb. loaf to private houses in Wellington is round about 2sd. In the face of this it appears extraordinary how the farmer can provide all the flour in it for less than 4d and live. Science and uot wheat is what makes our bread the price it is, and any' economical housewife can reduce her bread bill by more than one half by baking her own bread. Failing that she can save at least the cost of the duty by calling at a shop and taking a loaf of bread honxe.

In the light of these facts surely my opening statement that the wheat - growers of thc< Dominion have been the football of politicians is proved, and the judgment of Parliament was sound last session when it voted for con tinued protection by such a large majority.