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Wednesday, 30 November 1938

Mr SCULLY (Gwydir) .- A measure of this kind is overdue, and in whatever form it is finally passed, I hope it will provide the relief that is so much needed by the wheat-growers. I do not look upon thi3 scheme as a permanent one. It is merely a temporary expedient to tide us over our immediate difficulties. I regard a pooling system as the only permanent solution of the difficulties of the growers. It is only by co-operative and orderly marketing that real success can be achieved.

I listened with close attention to the arguments of the Leader of the Opposition, and I heartily agree with them. He was closely supported by the honorable member for Henty (Sir Henry Gullett), and I was particularly struck by the humane outlook of that honorable member, and by the force of his arguments. He demonstrated clearly that the cost of assisting the wheat industry should be borne by the whole community; that it should not be financed out of a sectional ta.x. The burden of assisting the primary industries should be spread as widely as possible.

The fault with this scheme is that it will apply to only about one-third of the wheat produced in Australia. We should have an orderly marketing scheme so that the other two-thirds of our wheat products will also be marketed to the best advantage. At the present time, they fall into the hands of speculators and millers who buy for export. For that reason, I regard this as merely a temporary scheme which must fail to stabilize conditions in the industry.

It has now become recognized in practically all wheat-producing countries in the world that some form of assistance to the wheat industry is necessary, but I do not know of any country other than Australia in which this assistance is being provided by means of a sectional tax. In the United States of America, the Government guarantees a price of 60 cents, or 2s. 6d. a bushel, at the country railway stations. It is also giving a subsidy of 30 cents a bushel on export. The Canadian Government is buying the entire output of wheat through the central pooling scheme,' and is paying for it, according to grade, up to 80 cents a bushel at Port William and Port Arthur, which represents 60 cents a bushel at country railway sidings in the prairie provinces. The Argentine Government, which is, perhaps, not so strong financially as is the Commonwealth Government of Australia, has guaranteed a price of 7 pesetos a quintal, which is equal to about 2s. 6d. a bushel.

I have been engaged in the wheat industry all my life, and for years I have advocated the formation of a compulsory wheat pool to provide for orderly marketing. The vagaries of the market, and uncertain seasonal conditions, make it impossible to depend upon prices, or even upon output, so that some form of stabilization is absolutely necessary. We know that there are constitutional difficulties, but the scheme could be inaugurated by the States. The position is much the same here as in Canada where, in 1924, the Canadian Wheat Pool was inaugurated. This pool is described in the following terms in a publication called Commodity Control in the Pacific A rea: -

The Canadian Wheat Pool system, which caine into existence in 1924, was the outcome of four convergent movements or situations. These were: first, the progressive experience in co-operative grain marketing acquired by the prairie farmers' grain and elevator companies during the preceding decade and a half; secondly, the persistent desire of western wheat-growers for restoration of the system of compulsory pool marketing as conducted under the federally created Canadian Wheat Hoard in 191.0-20: thirdly, the disastrous decline in world wheat prices between 1020 and 1023: and fourthly, the post-war development in the United States of America of the contract pool method of marketing farm commodities.

Following upon that, the three main dairy provinces adopted a wheat pooling system which remains in operation at the present time. During periods of overproduction and declining prices, this scheme has meant the salvation of the industry in Canada. The writer continues -

Whether or not the Canadian Wheat Pool becomes absorbed in a national or interprovincial wheat-marketing board, the graingrowers of western Canada have built up under prosperity, and retained under adversity, a producer-owned system of grainhandling facilities which will be of substantial advantage to it3 far-flung membership, whatever plan of marketing may prevail. The 1660 pool elevators that dot the Canadian prairies and the great pool terminals that rise over Thunder Bay and Burrard Inlet are physical symbols of a co-operative faith and Solidarity which the world depression has not extinguished, but only intensified, in the broader struggle for a co-operative commonwealth.

The honorable member for Henty was curious to learn why the Labour parties in several States have acquiesced in this plan. After years of experience in the Parliament of New South Wales, I realize that it is impossible, owing to the existence of reactionary upper houses and the entanglements of the Financial Agreement and the Loan Council, for State Parliaments to make a direct contribution to alleviate distress in the wheat industry. That is the solution of the problem which presented itself to the honorable member for Henty.

When I was a member of the State Parliament a plebiscite for a compulsory pool was referred to the wheat-growers in New South Wales, but, because of the adverse propaganda of the speculator interests represented by the buyers who have international ties, it was defeated. They expended enormous sums of money and sent speakers throughout the wheat-growing areas with false propaganda that the growers would be faced with calamity under compulsory pooling. Not even this legislation will take the wheat-growers away from the speculators, who have done so much damage to the wheat-growing industry all over the world. The only way to remove the wheat industry from the speculative field is to create a compulsory pool and an orderly marketing system. There are difficulties in the way, but nine-tenths of them are financial and only one-tenth constitutional. The constitutional difficulties could be overcome by collaboration between the Commonwealth and the States in the creation of an organization with a central marketing board similar to the Canadian wheat pool. The financial difficulties could be overcome by a system of advances through the Commonwealth Bank in the same way as they have been overcome in France. That is shown by the following extract from an article published in the May-June issue of International Affairs, entitled The Place of Agriculture in the Economic Policy of the French Government, by M. Georges Mo'nnet : -

I am specially glad that the Office du Bie has functioned in such a way that no part of agriculture has lacked ready money. The Agricultural Credit Banks have special funds at their disposal.

They could be established in Australia.

They arc mutual insurance companies, and have over a hundred million in trust. They have, therefore, themselves been able to discount a large number of the hills of exchange and to supply the co-operatives with the necessary money. Since September, the cooperatives as a whole have received 1,500,000 francs from the Agricultural Credit Banks. The Bank of France - which would be almost identical with the Commonwealth Rank - has always been at the service of the Agricultural Credit Banks each time the latter has needed its discounting services. So our financial system has worked well, and the official price of wheat has been properly observed.

If a similar system were applied in Australia .the major difficulties which confront the wheat-growers would be overcome. I am convinced that this bill is merely a temporary solution of their difficulties, and that compulsory- pooling must follow.

Australian sv heat-growers to-day are suffering not only reduced returns, which are lower than they have been almost for a. decade, but also adverse seasonal conditions, which have resulted in many of the growers losing the whole of their crops. In view of those facts, one would have expected that the ministerial delegation, which went overseas to discuss trade problems, would heed the needs of the wheat industry. The right honorable Leader of the Country party (Sir Earle Page) was a member of that delegation. Yet I read in the press to-day that the right honorable gentleman, in a speech at Armidale or some other country centre nearby, said that the action of the

Commonwealth. Government in agreeing to the removal of the preference of 2s. a quarter that was given by the Government of the United Kingdom to dominion wheat would have negligible results on the Australian wheat industry. If that, be so, why is it that the United States of America was so anxious that thai preference should be removed? To show how wrong the right honorable gentleman is, I shall make two quotations. According to a press report, the general secretary of the Farmers and Settlers Association of New South Wales, Mr. Cambridge, M.L.C., said -

It is reliably estimated that in four years up to March of this year the United Kingdom preferences have resulted in a direct monetary advantage of £2,2-31,000 to the Australian wheat-growers.

That is the benefit that has been given to the Australian wheat-grower by the Imperial preference. Yet the right honorable gentleman says that it was of practically no consequence to the Australian wheat-grower. Mr. Cambridge continued -

The Federal Government lias, however, failed tn take the wheat-growers into its confidence. Instead, it has gone behind their backs, and dealt a severe blow at a time when they arc the least able to withstand it.

The executive of the Farmers and Settlers Association carried the following resolution : -

That .we consider the surrender of the 2s. per quarter preference on Australian wheat (equivalent to 3d. to 4d. per bushel) the greatest injury the wheat industry has suffered in recent years-

This injury was inflicted by the leader of the Country party, who supposedly represents the wheat-growers. The resolution continues - and is badly timed, and we strongly disapprove of the Australian trade delegation indifference, and utter disregard of the protests of leaders of the industry.

The honorable member for Riverina (Mr. Nock) took the Government to task about this the other day.

The honorable member for Kalgoorlie (Mr. Green), who elaborated on what had already been said by the Leader of th- Opposition (Mr. Curtin), and the honorable member for Henty, gave from practical knowledge, an illustration of the position of the wheat-growers, and I can only confirm what he has said" about the vagaries of the wheat industry. I conrend, however, that my suggestions contain the solution of the difficulties. The Labour party recognizes that the labourer is worthy of his hire, and it has always been its policy to ensure that any one who produces a commodity shall, as far as humanly possible, be amply recompensed. For that reason, we on this side support the plan outlined by the Leader of the Opposition. As a 'representative of a wheat-growing district, however, I say definitely that I shall support any measure which will provide relief, even though it will be only temporary, to the industry. There are circumstances over which Ave have no control, and if we cannot get what we want, we must take the next best thing, i. must point out, however, that under the plan of the Government, only onethird of the wheat produced will benefit from the home-consumption price. Some way must bc devised in which to stabilize the whole of the industry. An orderly marketing system must be devised on the lines of systems adopted in other parts of the world, even in France, where the growers are guaranteed a payable return, and, of course, New Zealand, where there is a Labour administration, which gives to its growers a home-consumption price which is better than that given in any other part of the world. The New Zealand example shows what can be done by a central government that is determined to do its best for an industry. Constitutional difficulties in the way of the establishment of a nation-wide wheat-pool could be overcome by collaboration between the Commonwealth and the States, because there is not one State which would not give its wholehearted support to a scheme for the stabilization of the wheat industry. The financial difficulties could be overcome in the way in which I have stated.

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