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Wednesday, 9 November 1938

Sir EARLE PAGE (Cowper) (Minister for Commerce) . - I thank the honorable member for "Wimmera (Mr. Wilson) for raising this subject, which is both urgent and important at the present time, for it gives to the Government an opportunity to reveiw the position of the wheat industry, and enables members of this Parliament to consider its more important phases before the Government actually introduces legislation on the subject. The problem is so difficult as to require the combined wisdom of all political parties to find a satisfactory solution. Moreover, the assistance of all the Governments of Australia, irrespective of their political outlook in other directions, will be necessary. A review of the subject reveals that this Parliament has always been interested in, and sympathetic towards, this industry. As the honorable member for Wimmera has said, Parliament has recognized that wheat-growing is one of the great basic industries of the Commonwealth; it employs large numbers of workers, and its prosperity or adversity is reflected throughout the whole community. At the present time every wheat-growing country is facing a most serious problem. The difficulties are accentuated in Australia by the federal system of government, under which the Commonwealth Government and Parliament merely control the export marketing side of the industry, whilst the State governments and parliaments control production. Those difficulties have been enormously increased by the interpretation of section 92 of the Constitution by the Privy Council in 1936. The constitutional position is that neither the Commonwealth Government and Parliament nor the State governments and parliaments can control adequately the marketing of wheat. The story of the last few years in regard to the wheat industry is a sorry one, indeed. At the beginning of 1930 wheat was 5s. a bushel f.o.b. Australian ports, but by December of that year the price had fallen to 2s. 6d. a bushel. In 1931 the price reached the low level of 2s. Id. a bushel, and for the next four years it remained low. In 1936 there was an improvement, and wheat realized more than 4s. a bushel; in 1937 the price further increased to more than 5s. a bushel. That rise was the result of drought conditions in the northern hemisphere, which affected both the American and European crops. At the present time the price of wheat in Australia is below 3s. a bushel f.o.b. Australian ports. To-day's quotation is 2s. 9d. or 2s. 9jd. a bushel for bagged wheat, whilst the price quoted for January deliveries ex silos and for new wheat is 2s. 7½d. a bushel. Present-day prices reflect the world position in regard to wheat supplies.

Mr Forde - What is the price free on rail at country sidings?

Sir EARLE PAGE - The price varies, but generally 6d. or 7d. a bushel must be allowed for freight to Australian ports. The supplies of wheat available for export this year by all exporting countries are estimated at 925,000,000 bushels, but the world import demand is estimated at only 550,000,000 'bushels. That means that this year there will be a world surplus of approximately 375,000,000 bushels, and consequently it is not difficult to see the reason for the present low prices. The excess of production over demand has caused a relapse of prices, following a temporary recovery. I emphasize that the present prices for wheat are due not merely to Australian conditions, but to world factors. A world surplus of wheat is forcing down prices. One explanation of the over-production of wheat is that many European countries, in an attempt to become self-contained, are growing wheat on an uneconomic basis. Instead of importing hundreds of millions of bushels of wheat, as they did in the past, they are supplying their own requirements. Again, newer wheat countries, which during the war increased their production of wheat enormously, continued that production after the war, and, in some instances, actually increased it. Obviously, if the present world volume of production be maintained and there be no increased consumption, there will be a continuance of low prices. The only permanent remedy is either an increased consumption of wheat, which does not appear to be likely, or a reduction of production. If a reduction of production in European countries which are now producing wheat uneconomically cannot be brought about, we in Australia will have to face the possibility of persons who are now attempting to grow wheat in marginal areas directing their energies to more profitable undertakings.

Mr Forde - Will the wheat-growers of the Wimmera, in Victoria, be considered to be on marginal land?

Sir EARLE PAGE - That will have to be considered in a proper and systematic way. The Commonwealth Government has been fully alive to the difficulties of the wheat-growers, for. during the last eight years, it has distributed £14,000,000 throughout Australia for the assistance of the industry. Amounts of £3,250,000, £4,000,000 and £1,878,000 were made available in 1031-33, 1934-35 and 1935-30 respectively. These bounties have undoubtedly been merely palliatives. Some permanent remedy -is needed. To provide this, the Commonwealth Government has done several constructive things. It appointed the royal commission, presided over by Sir Herbert Gepp, to inquire into the industry. The commission, after taking evidence throughout Australia, made many recommendations, some of them of a major character. Of these manor recommendations, sixteen have been implemented by the Government. The Government also established the Australian Agricultural Council, in an effort to secure complete co-operation between the State governments, which control production, and the Commonwealth Government, which controls export marketing. One of the first subjects dealt with by the council, in December, 1934, was the re-organization of the wheat industry, and the adjustment of farmers' debts. In this respect, an amount of £6,317,000 has been made available to the State governments in the last four years, which is more than half of the £12,000,000 arranged to be provided for this purpose. The reason why a larger sum has not been provided is easily explained. The Commonwealth Government, which has not borrowed any money for its own purposes in the last four years, informed the State governments that if they would agree to the Commonwealth borrowing certain moneys for public works, the Commonwealth would make available an equivalent amount for farmers' debt adjustment. The rate at which money may be made available is, therefore, controlled by the State governments. The only limit is the limit determined by the Loan Council, on which the State governments have six representatives. A contribution of £6,317,000 for the purpose of farmers' debt adjustment must be regarded as substantial. Personally, I regret that a larger proportion of this money has not been used to try to divert more wheat-growers to other lines of production which offer a prospect of permanent profit. This would help to solve the main problem. The greater part of the money has been used, however, to pay current debts. I admit that the State governments have a difficult problem to deal with in this connexion.

In 1935, a conference held under the auspices of the Australian Agricultural Council of all the wheat interests of Australia discussed in great detail the principle of fixing a price for wheat for home consumption. Subsequently, legislation embodying the decisions of the conference was passed by this Parliament, and by three State parliaments. Unfortunately, this whole plan was rendered abortive by a decision of the Privy Council. The attempt made, by referendum, to amend the Constitution to permit that plan to be carried into effect failed. During the referendum campaign the whole of the members of the United Australia party and the Country party, and also a considerable number of members of the Labour party in Victoria, Queensland and South Australia cooperated in an endeavour to obtain an affirmative vote by the people, so that the Commonwealth Parliament could make effective arrangements for both the domestic and overseas marketing of our wheat. The Government was grateful for this co-operation. Many of the members of the Labour party in New South Wales, however, refused to co-operate, and so it has not been possible, so far, to deal with the subject in a national way. After the defeat of the referendum proposals, the whole position was very carefully examined in the light of the decision of the Privy Council, and it was found that that decision undoubtedly revealed that the States had greater powers than was previously thought to be the case to fix the price of their products. In August, 1937, the Agricultural Council, at its meeting in Brisbane, found a. means by which the States could, by fixing the' price of flour, indirectly secure a home-consumption price for wheat. On the 26th August of this year, the Council again considered the whole subject and the State Premiers said to the Commonwealth Government, in effect, "We will fix the price of flour within the States if the Commonwealth Government will take complementary action to make available from the proceeds of the fixed price a levy to permit the payment of a fixed price for wheat-growers for home consumption ". The Prime Minister gave an assurance that the Commonwealth Government would co-operate in bringing the scheme into operation, seeing that it had the unanimous support of the State governments. On the 29th August last, at a conference of Commonwealth and State Ministers in Canberra, the general principles, and the greater part of the detail of the whole scheme, were agreed to, and since then, bills dealing with the subject have been passed by both Houses of the Parliaments of New South Wales and South Australia. The necessary legislation has been introduced in the Parliaments of Western Australia and Tasmania, and notice of its introduction was given in the Parliament of Queensland on the 4th November. The Victorian bill has been drafted and submitted to the Commonwealth Government for approval, though it has not yet been actually introduced. But the States have now suggested a variation of the agreed method of dealing with the position. In short, their new proposal is that the pro ceeds of the levy should be distributed on a different basis from that already approved. Mr. Dunstan, the Premier of Victoria, was the first one to make this suggestion, when, a few days ago, he telephoned me. Mr. Reid. the Minister for Agriculture of New South Wales, communicated with mc last Friday, and Mr. Playford, the Premier of South Australia, telegraphed me yesterday on the matter. As the result of the telephone conversations that have ensued, which suggest that some variation of the scheme already agreed to is desired, I have informed the State representatives that [ shall bc available in Canberra next week-end to discuss the whole subject with them, and also to endeavour to find some means by which a measure of relief may be accorded to farmers in wheatgrowing areas where the seasonal conditions have proved to be extremely bad. Strange to say, such areas are to be found in every State, and are widely scattered throughout the Commonwealth. Within the same State conditions in some areas have been exceptionally good, and farmers will have excellent crops, whereas in certain other areas extremely difficult conditions prevail. The following table sets out some interesting details : -

Because of the diversity of the problem within the States themselves, quite apart from the difficulties arising as between the States, it is very difficult to devise any uniform scheme to deal with the position. Consequently, we are discussing the matter with all of the State governments, which are representative of all political parties, in an endeavour to arrive at some solution of not only the problem of providing a homeconsumption price for wheat, but also the general question of relief in stricken areas. We desire to bring down legislation not merely to deal with the present crisis, but also to establish co-operative action as between the Commonwealth and the State Governments in the industry itself, and to secure not only organized marketing, but also systematic control of the industry in order to prevent the growing of wheat in areas in which farmers will obviously have a rough time. We hope to devise means to transplant farmers who already find themselves in such a position, to callings in which they will find a job of work to do and have a decent chance of making a success of it.

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