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Tuesday, 16 July 1946

Mr ADERMANN (Maranoa) . - Judging by the remarks of the honorable member for Riverina (Mr. Langtry), one would assume that there is not a bill before the House; because the whole of his speech was devoted to self-praise and a eulogy of the Government without producing any evidence in support of his contentions. We have not heard very much of the recent history of the wheat industry, including the operation of the iniquitous Scully scheme. The honorable member for Riverina seemed to set himself out to decry the Australian Country party. He is well aware that that party will wrest his seat and a. few more country seats from ministerial supporters. There is a vital difference between the Australian Country party and the Australian Labour party in the matter of stabilization. The Australian Country party stands for grower-controlled, orderly marketing schemes, whereas the Australian Labour party stands for departmentally controlled schemes. In a speech which the Minister for Commerce and Agriculture (Mr. Scully) made in 1940, he said this-

I have yet to witness the successful operation of a wheat scheme under departmental supervision.

I entirely agree with that. There has been departmental supervision in recent years, I shall not delve into ancient history in regard to this industry, because T do not know enough about it. But I am' acquainted with the iniquities that were associated with the Scully wheat scheme, and I say definitely that Queensland bore the full brunt of them, receiving neither consideration nor wheat. That State was not allowed to grow wheat "at 4s. a bushel beyond '3,000 bushels excepting at a price beyond the cost of ' production. On the Minister's own statement, millions of bushels were imported into Queensland from the southern States at 5s. 7d. a bushel. His iniquitous scheme was responsible for a continuous decline of production, until eventually Australia was placed in a desperate position in regard to supplies of wheat. Production declined from 153,000,000 bushels, first to 143,000,000 bushels, then to 90,000,000 bushels, and then to 67,000,000 or 57,000,000 bushels - I am not sure which is the correct figure. In another year, Australia would not have had any wheat at all. "We do not hear ministerial supporters eulogizing that scheme. They go back 20 or 30 years; their minds lie dormant in the past. I stand for the stabilization of the wheat industry and of all other primary industries. I defy any one to prove that I have not been consistent in that attitude in all my public activities.

Mr McLeod - It was a Labour government in Queensland which first introduced stabilization schemes.

Mr ADERMANN - The honorable member has Labour governments on the brain, and cannot see beyond them. He is blind to facts. I am not happy about some of the provisions of the bill, because they do not remove the anomalies that were revealed in the very unhappy period through which the industry has recently passed. The amendment of the honorable member for Indi (Mr. McEwen) has my complete approval, because it seeks to remove many of the anomalies that have been untouched by the bill. If I understand the attitude of the Queensland grower-elected wheat board, it is in entire agreement with the amendment, although it was not aware of the intention to bring it forward in its present form.

Mr Scully - Then how can the honorable member say that it is in entire agreement with the amendment?

Mr ADERMANN - I had a discussion with one of the members of the board, and he intimated to me what its attitude was.

Mr Scully - I had a discussion with all the members of the board; therefore, I know more about the matter than does the honorable member.' '

Mr ADERMANN - This -member of the Wheat Board in Queensland told me that he and his fellow members were entirely opposed to the inclusion in the scheme of the 1945-46 crop. Does the Minister deny that? I am opposed to retrospective legislation. There is no justification for the inclusion of the No. 9 pool in the scheme. If .the growers of the 1945-46 crop are denied the right to enjoy the existing high prices, the Government will have succeeded, by means of the iniquitous Scully scheme which I mentioned earlier,' in preventing the growers of recent crops from securing the benefit of high prices, by the restriction of acreage and the use of the short crops entirely for home consumption. Now that we have a crop with a' reasonable surplus, for which the growers could obtain high prices, the Government proposes to commandeer 50 per cent, of the receipts in excess of 5s. 2d. a bushel, and has thus deprived the growers of the right to recoup some of their losses. I admit the necessity to have a trust fund if an industry is to be stabilized. It is difficult to protect individual interests. The growers of the present day are providing considerable funds for the benefit of those who will be interested in growing wheat in the future. I have no hesitation in affirming that the price of wheat within the next few years will be satisfactory. My justification for that statement is the contract under which Great Britain has agreed to pay Canada 6s. 5d. a bushel for the next five years, which is really one year longer than the term proposed in this bill. With the prospects of a good market, and in view of the fact that in each year within the period for which the scheme will operate, it is likely that the growers will have to make a contribution to the fund, the whole of the stabilization trust fund will probably be provided by them, whilst the Government will not pay anything. In effect, the Government will make no contribution at all to the cost of stabilization, but will force the growers to make a contribution to% protect themselves. An analysis of the bill must prove that contention to be right.

There is another reason why the 1945-46 crop should not be included in the scheme. Recently this Parliament passed a States Grants (Drought Relief) Bill. The governments of the States of New South Wales, Victoria and South Australia, in conjunction with the Commonwealth Government, have provided over £3,000,000 to assist cereal-growers who lost their crops through drought.

Mr Frost - Does the honorable member object to that?

Mr ADERMANN - No, but I contend that growers should be allowed to recoup heavy losses incurred by drought. No doubt the Minister, who interjects will vote for this iniquitous proposal of the Government. Queensland wheatgrowers are in a worse position than those in other States. When I moved an amendment to include Queensland within the scope of the States Grants (Drought Relief) Bill, the Government rejected my proposal and every supporter of the Government from Queensland voted against primary producers in that State receiving assistance. Farmers in portions of the wheat-growing districts in my electorate suffered as much loss, as did farmers in the southern States. In the Roma and Chinchilla areas, severe drought was experienced for two years in succession. As no rain has fallen in the wheatgrowing areas of Queensland 'this season, what will be the benefit of any price guaranteed under the scheme, if the farmers get no crop at all? Yet, under this proposal, Queensland growers who lost their crops for two years in succession, had one good season last year, and will have no crop this year, will be prevented from receiving the full benefit of their labours.

Another reason why the No. 9 pool should not be included is the fact that the Government acquired the wheat crops during the recent war under National Security Regulations. I readily grant that the acquisition of the wheat crop for food is vitally necessary in time of war, but it is a distinct breach of faith on the part of the Government to divert portion of the proceeds to a trust fund which has not relation to war needs. The High Courthas ruled that any property acquired under National Security Regulations must be paid for on just terms. With all due' respect for legal opinion, if the growers took the Government to court on the matter, I have no doubt that they would be permitted to retain the full price received for their crops. Apart from the legal aspect, however, the matter must be considered from the moral aspect, and the fact that the Government has broken faith with the growers is deplorable. In view of the prospect- of good market prices prevailing during the term of the proposed agreement, I have no doubt, that ample sums will be paid into the trust fund by the growers, and that they will be sufficient during the period of the agreement to warrant the exclusion of the last crop.

Mr Frost - Does not the honorable member consider that that would be a desirable position.

Mr ADERMANN - The Minister is concerned only that the Government shall receive sufficient in payments by the growers to relieve it of the necessity ' for making any contribution at all. My concern is to make the Government face up to its obligation, and also become a contributor.

The next matter is the term of the proposed agreement. This is unsatisfactory, because, whilst the bill stipulates a period of five years, the agreement, in fact, covers only four years, because the season 1945-46 has already passed. The last crop to be handled under the proposal is that of 1949-50, which makes the term one year shorter than that under the British-Canadian contract, which was completed at 6s. 5d. a bushel. The bill provides for a price which I regard as unsatisfactory. In effect, the price of 5s. 2d. f.o.r. is only equivalent to 4s. 3d. a bushel at growers' sidings. With the present high prices prevailing, and the urgent need for wheat, the Government could readily accept the amendment desired by the Australian Country party and make the payment 5s. 2d. a bushel at growers' sidings, with a share to the grower, on a 50V50- basis, of the proceeds from any surplus wheat as sales are made. Any figure that meets the circumstances of. to-day may be quite disproportionate to the costs of production in future years'. We can best protect the growers by guaranteeing to them a minimum price covering the cost of production 'and a -fair margin of profit. That is the only : basis on which this or any other industry can survive and thrive. The present basis of arriving at the price of wheat is out of date. There is need for an authority to ascertain current costs of production so "that the Australian Wheat Board and the Government may be continually aware of those costs and of the circumstances of the farmers. Back in 1932-33, evidence was taken by the Gepp commission, which, after making an exhaustive inquiry, found that the cost of production at that time was 3s. 6d. a bushel. It must be remembered, however, that the commission allowed only £125 a year living expenses for the grower and his family, and I am sure, that no honorable member would suggest that such an amount would be adequate now. Also, the commission allowed only £1 a week wages and keep for a son employed on the farm by his father. That amount would also need to be adjusted. The cost of producing a bushel of wheat in 1938 was 5s. 2d., a figure which can be tested by any commission which may be appointed. The Gepp commission took into consideration all the items involved in the cost of production, including labour, interest, machinery, rates and taxes, insurance, rail freights, handling charges, seed wheat, cartage, superphosphates, bags, power and maintenance of farm and buildings. I would support any proposal, whether emanating from the 'Minister or elsewhere, 'to set up an authority to determine .the cost of production.

The proposal to continue a home consumption price for wheat may be necessary, having regard for Australia's economy, but I' object to the wheat-growers being compelled to make a sacrifice for this purpose whilst the Government evades its responsibility. Obviously, a home consumption price should be financed out of general revenue, to which the wheat-growers would contribute only in the proportion to their incomes. No other industry in the country would put up with such an arrangement. To-day, the export price of wheat- is over 10s. a bushel, but the farmers are not getting the benefit of it. At first, the restrictions imposed under the Scully plan prevented the industry from expanding, and it was further restricted by the shortage of labour and material, and by the effects of drought. Now. the Government, by this scheme, which amounts in part to confiscation, proposes to prevent the growers from recouping their losses. Under this cunningly devised scheme, the growers are required to pay. at the rate of 2s. 2d. a bushel into a trust fund, when they should bc receiving the money to enable them to make up for losses incurred in the past. The Minister, in his ;speech, forecast a continuance of restrictions - not, he said, by regulation; but he also predicted that gluts arising out of over-production would be prevented, and how is this to 'be done except by regulation? Evidently, the Government intends so to regulate production as to avoid making any effective contribution out of the trust fund. The Minister, speaking in 1940 on the proposed wheat stabilization scheme, said -

So many restrictions will be placed on the industry that I am fearful of the result. One of the most objectionable features of the plan is the proposal to restrict the acreage to be sown next season. That, in itself, is a defeatist policy, and is strenuously opposed by the wheat-growers' organizations.

I unreservedly endorse those sentiments. Regulations and restrictions have been the curse of the industry. Because of them Queensland farmers could not get feed wheat. Such wheat as was available went to users in the southern States, Queensland being unable to get any quantity, whether subsidized or not. The Minister seemed to suggest that the wheat board shall have on it a majority of growers' representatives, but he did not say how it was to be elected, other than to state that it would be elected as prescribed. He said that State committees would be appointed by himself, and on this point I feel much concern. Does he mean that the Queensland board, elected by the growers, is to be superseded by a committee appointed by the Minister? The record of the Queensland Wheat Board is most creditable. For more than nineteen years it has maintained an average of 4s. 5d. a bushel to growers at sidings, as against the proposed price of 4s. 3d. under the present scheme. I hope that the Minister will allow the growers in Queensland to continue to elect their own board, which could act as a State committee under the general scheme. From the State committee the Minister could select a representative for the central board, but I should prefer that the growers should make the selection themselves. In fact, I regard that as a basic principle. Again I quote the words of the- Minister in 1940. The honorable gentleman cited the example of France, where he said primary producers had a majority representation, on marketing boards. -He also said that, where departmental officials dominated, he had yet to see the successful operation of any wheat scheme. Little has been said regarding the issuance of permanent wheat-growing licences to returned soldiers. The Minister passed, over that matter very lightly in his second-reading speech by saying -

Our normal pre-war basis of production can bc maintained and it will be practicable to include in the industry soldier settlers and farmers' sons.

What steps has the Minister taken to make provision for these people? When I raised this matter in the House a few day ago, the Minister replied, by interjection, that the Commonwealth Government did not have power to grant permanent licences. It is true that the National Security Act will remain in force for a limited duration only, but if this measure has the full support of the States as the Minister has claimed, I see no reason why an arrangement could not be made for the granting by the States of permanent wheat-growing licences to exservicemen and sons of farmers who have been brought up in the industry and are entitled to make a living in it. There is an obligation on the Minister to clarify these points. The Commonwealth Government certainly is not making any attempt to inaugurate land settlement schemes for returned soldiers who wish to engage in wheat production, whereas private landholders are assisting the rehabilitation of- ex-servicemen by settling returned soldier share-farmers on their properties. ' Even when the heavy expense of clearing land and breaking the ground has been carried out, wheat-growing licences are not forthcoming. Lack of power on the part of the Commonwealth to grant these licences is no excuse in view of the fact that this legislation is to be implemented by the passage of cognate measures through the State parliaments. The main points of my opposition to this measure may be summarized as follows: First, I oppose retrospective action. The 1945-46 crop should not be included in this proposal. Secondly, there cannot be any real stability in a four-year period. The term therefore should be extended. Thirdly, the basis of price fixation should be the cost of production plus a fair margin of profit. Fourthly, from the inception of this plan ex-service personnel should be granted permanent licences to grow wheat. Fifthly, a competent authority should be set up to determine costs. Sixthly, the Australian Wheat Board and State committees should, be elected by . growers, and for a specified period in each instance. These authorities should not be subject to the direction and will of the Minister. Lastly, tha Government, and not the industry, should be responsible for any deficiency in the home-consumption price as compared with the world price. Let u3 by this legislation as we on this side of the chamber propose that it be amended, assist the industry to get out of its present difficulties and give to it the right to enjoy some of the advantages to be derived from the present high price of wheat and to move forward towards a stable and progressive future.

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