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Wednesday, 17 July 1946

Mr TURNBULL (WIMMERA, VICTORIA) . - There is nothing so galling to a new member of this House than to have to listen, in the course of a debate such as this, to what some honorable member or party did for the wheat industry, ten, twenty, thirty, forty or fifty years ago. Such recapitulations of ancient history we had from the honorable member for Hume (Mr. Fuller), the honorable member for Ballarat (Mr. Pollard), and the honorable member forRiverina (Mr. Langtry). The honorable member for Riverina said that talk does not count, and I agree with him. There is an old saying " Talk is cheap but it takes money to buy land ". What honorable members opposite do not seem to realize is that it takes money, land, enterprise and energy to grow wheat, and that the man engaged in. the wheat-growing industry must be given at least as reasonable a deal as other members of the community.

I strongly favour the stabilization of the Australian wheat industry, but I believe that any plan to that end must be on a basis that will sustain, maintain and be the means of developing this great asset of our Commonwealth. The bill before the House is not acceptable to me. As the representative of the most important wheat-growing constituency in the whole of Australia, I assure honorable members that more than 95 per cent, of the growers in that area are opposed to the bill in its present form. And that is but putting it mildly. We have been told by honorable members opposite that wheat-growers throughout the Commonwealth are fighting for it, but the truth is that its supporters are in the main the members of the Government and some of those on the payroll of the Government. The wheat farmers who favour the bill represent but a very small percentage of the farming community. The bill is but a reflection of the Minister's own preconceived ideas on the subject. I shall tell a story to illustrate my point. When I was a small boy I was taken to witness at a concert the performance of a great ventriloquist. We all were amazed at his wonderful skill at creating the illusion that his voice came from the far recesses of the stage. In the middle of the performance a great noise occurred at the back of the hall. It seemed as though a fight were in progress. Everyone turned round to look, only to discover "that it was only the ventriloquist. That is what is happening in connexion with this bill, which is nothing more than a reflection of the Minister's ideas. All through the Wimmera electorate the farmers are opposed to the scheme as propounded in this bill. I make that statement deliberately and I shall prove it up to. the hilt. During the campaign that preceded the by-election for the Wimmera seat at which I was the successful candidate, I was consistent in my opposition to this scheme, and the candidate who secured the next greatest number of votes also opposed it, especially the proposal to include the 1945-46 harvest in the plan. Yet on the first count five out of every six votes cast in that great wheatgrowing constituency were cast in our favour. Surelythat is sufficient proof of the attitude of that great body of wheat-growers towards the measure. I have said that I favour the stabilization of the wheat industry. I do so, not only in the interests of the wheatgrowers themselves, but also because I believe that we should do everything possible to ensure that Australia may be in a position to. contribute the greatest quantity of wheat in order to feed the starving millions of the world. Honorable members opposite endeavour to create the impression that honorable members on this side of the House are opposed to a stabilization scheme. Nothing could Le farther from the truth. The stabilization of prices for primary products has always been the aim of the Australian Country party. My only regret is that certain provisions have been included in the bill and others have been omitted which preclude me from supporting the measure as it is now drafted. For that reason I give my whole-hearted support to the amendment which embodies all the conditions that are necessary to ensure that the industry will benefit and . that those engaged in it will receive justice. There is absolutely no reason to support the contention that the 1945-46 harvest, should be included in the scheme; but there are countless reasons of vital importance why it should be excluded. The wheat-growers, after years of drought, now, as perhaps never before, require capital to put in order their machinery - sheds, their houses, their fences, and even their personal belongings, and generally to equip themselves to produce this- most important food for the world's starving millions. The exclusion of the 1945-46 harvest from the scheme is of vital interest to individual growers; but there are interests deeper and more vital still. The whole future of the industry as Australia's second most important asset may be jeopardized. Furthermore, I contend, that the Government cannot justify the inclusion of last season's crop in a scheme which has not yet received the endorsement of this Parliament. The Government, however, seems to act on the misguided principle that might is r.ight We had a glaring example of the application of that principle in this Parliament prior to the introduction of the Parliamentary Proceedings Broadcasting Bill when on assembling here last month we were confronted by a forest of microphones installed in anticipation of the passage of that measure, showing definitely that the Government did not intend to bc influenced by any matters that might be revealed in the debate on that bill. Now the Minister has said that the 1945-46 harvest will be included in the wheat stabilization plan, again showing this dictatorial attitude, an attitude that meets neither the demands of the democracy nor the approval of clear-thinking Australians. If the plan in its present form is adopted, the Australian wheat-growers will receive a lower net return than any commercial wheat-growers in the Englishspeaking world. The honorable member for Forrest (Mr. Lemmon) has apparently striven to confuse the issue. Speaking on this bill the honorable gentleman said -

If such a scheme had been offered to growers within the last sixteen years it would have been grasped.

How ridiculous is that. statement! Surely the honorable member must know that the rising costs of all those things that are necessary to primary production have made it increasingly essential to our future progress as a nation that those who produce the primary products must be on a satisfactory basis at least equal to that of other members of the community. What would have been a fair proposition in the past is now highly inadequate. Who among us would not like to purchase a suit of clothes, a motor car, cigarette papers, or a home at the level of supply and costs prevailing during the last sixteen years? Surely it is agreed by all that the present ' must be viewed in the light of existing circumstances, and what some former government did or what would have pleased the wheat-growers sixteen years ago, "like the flowers that bloom in the spring", has nothing to do with the case. Why hark back to the days of long ago? We must view the wheat industry in the light of the circumstances that prevail to-day, and not those that may have prevailed years ago. Going back into the past is useless. Conditions then were as different from what they are now as a 600-mile-an-hour aeroplane is different from a bullock dray and the cabbage-tree hats that were in use then.

The inclusion of the 1945-46 crop in the scheme would be most unjust, because the crop has been acquired under the National Security (Wheat Acquisition) Regulations, and really cannot be included in this peace-time scheme, as the growers, having been led to believe that they would receive the full value of the crop, have entered into financial obligations with other members of the community that cannot be overlooked. The amendment provides for " a guaranteed price of not less than 5s. 2d. per bushel, bagged, basis at growers' sidings for the next crop ", which is an improvement on the bill, as "growers' sidings" is substituted for " f . o.r. ports ". It would not only give, the growers a more reasonable return but also be a step towards true decentralization. Only by a sound policy of decentralization shall we be able to maintain our present standard of living. No wonder the Premier of Victoria, Mr. Cain, said in Melbourne last Saturday -

Melbourne is becoming too unwieldy. There cannot be a balanced economy until the population is more evenly distributed.

No wonder, too, the Prime Minister said in this chamber during his financial statement -

Production is the key to further relief from taxation.

Those leaders know that, and it is clear that if we do not decentralize population we shall be heading for the greatest crash in our history.

Mr Fuller - That is what Opposition parties should have done years agowhen they had the opportunity.

Mr TURNBULL (WIMMERA, VICTORIA) - Back to the old days again! The key to prosperity is a return to the land. It is the only solution for this ill. Acceptance of the amendment by the Government would eventually do much to give us a balanced economy, and it would perhaps be the forerunner of a return to the days when primary production was unhampered and Australia's name rang throughout the world as the land of opportunity. Let us examine how " growers' sidings ", instead of " f . o.r. ports " would contribute towards decentralization. The man outback would he benefited. Why should not the man 300 miles from the port get as much for his wheat as the man 30 miles away? Men in the cities have too much advantage over the primary producers. For instance, a man in the Wimmera whose machine breaks down may need a duplicate part to put it in order. He rings up the distributor in Melbourne for it. It is not long before the telephone operator asks, "Do you want an extension ? " He takes it and probably before he has been able to order the part he has had two or three extensions, and the call costs him about 9s. A man in Melbourne in a similar plight merely rings up the local supplier for the part and the call cost him 2d. or less.

Mr Archie Cameron - And he can speak for as long as he likes.

Mr TURNBULL (WIMMERA, VICTORIA) - Yes. We must equalize things for men in the out-back if we are to decentralize industries and population, and if this country is to have a bright future.

The amendment also provides for -

(b)   an annual guaranteed minimum price related to cost of production;

(d)   payment by the Government to the Aus tralian Wheat Board of the difference between the prevailing export parity and the price at which any wheat is sold by Government direction for export or consumption within Australia, other than human consumption within Australia;

(e)   the establishment of an authority to ascertain current costs of production.

It further provides that the price charged for wheat sold for human consumption in Australia shall be reviewed in the light of the change of costs and prices after the present price was fixed and that the stabilization plan should operate for ten years. The honorable member for Wakefield (Mr. Smith) assured us in his speech-

The plan is not for one year but for five years.

If it were for one year what would be its justification? The honorable member for Ballarat (Mr. Pollard) said that the producer must be placed on the same level as the labourer. Let us analyse that. A man has a basic wage of, say, £6 a week. That is the cost of the production of hisservices. What would henot say if some authority said to him, " You are to he paid £6 a week, but we will retain £2 of that amount to ensure that we shall be able to pay you £6 That is exactly what the Government proposes with respect to the wheat-grower. It says that he shall be given a certain amount of money for his wheat, but that approximately 33£ per cent, shall be retained to ensure that he shall get that amount of money. Never was there anything so unfair as that. It must be put right.

I intend to deal further with- this matter in committee, but, before closing, I desire to make reference to the provisions of the bill. Let us consider clause 6 (1.) -

The Board may- appoint any number of its members to be an Executive Committee and delegate to that Committee such of its powers and functions as the Board; subject to any direction by the Minister, determines.

That looks like dictatorship by the Minister. Let us follow it on to clause 7(3.)-

The members of each Committee shall be appointed by the Minister and shall hold office during the pleasure of the Minister.

That also -savours of dictatorship. "Will these committees be formed from departmental officers, businessmen, growers representatives or other government nominees? I move oil to clause 10 (2.) -

The Board shall have and perform all the duties, and shall have and may exercise, in relation to the wheat harvested in any wheat season up to and including the 1045-40 season, all the powers.

That may mean that the old board will not necessarily complete any of the pools or any of its duties. Does this indicate a method of stopping legal action for compensation in regard to any pool that has not been completed and that all pools will be brought under the new law? It looks like that to me. It seems that the producer will have no means of getting a just payment from the pools of the past that should be completed now. Many of them should have -been determined long ago. The growers are calling for finality now. Clause 11 provides -

Subject to this Act, the National Security (Wheat Acquisition) Regulations shall, by force of this Act, in so far as they relate to wheat harvested in any wheat season up to and including the 1945-40 season, continue in force until such date as is fixed by Proclamation, and shall, during such continuance, have the force of law.

Under clause 10 the word "purchase" probably means a definite contract by which the grower is debarred, from objecting to any price, be it fair or not. The bill contains many provisions that are not in the interests of the producers. Here is the most glaring. Clause 21 provides - (1.) For the purposes of this Act there shall be a Wheat Industry Stabilization Board. (2.) The Stabilization Board shall consist of-

(a)   a Chairman, an executive member and one other . member each of whom shall be appointed by, and shall hold office during the pleasure of, the Minister; and

(6)   one member appointed by the Minister to represent each State after nomination by the appropriate Minister of State of that State.

I point out that the Stabilization Board has full power to curtail production, if at any time the Treasury is likely to be required to provide money in order to ' bolster the price of wheat. Therefore, the plan is not in the best interests of wheat-growers or Australia as a whole, and I support the amendment submitted by the honorable member for Indi. The bill must be redrafted before we shall obtain justice for the man on the land.

A large majority of wheat-growers are opposed to this plan. That is well known. I invited the Minister for Commerce and Agriculture to visit the great wheatgrowing electorate of "Wimmera in order to obtain a proper appreciation of the opposition to his proposals.

Mr Scully - The wheat-growers in the Wimmera have always given me a warm welcome.

Mr TURNBULL (WIMMERA, VICTORIA) - Because they have a personal regard for the honorable gentleman, they will give him a warm welcome; but they do not welcome his plan. Whilst I appreciate the assistance that the honorable gentleman has given to me since I became a member of this Parliament, I must voice the hostility of wheat-growers to this bill. I propose to read extracts from the report published by the Warracknabeal Herald of a meeting of wheat-growers which considered the stabilization plan. Many centres were represented, including St. Arnaud, Wycheproof, Marnoo, Beulah, Dimboola and Horsham. The report "will convey to supporters of the bill the strong, feeling in the Wimmera and Mallee against the plan. The heading over the report appears in large black type - " Wheat Stabilization Scheme - Opposition to the Federal Plan ", and the introductory passage reads -

Declaring that it might be described as a stop-work meeting of wheat-growers of Victoria, Cr. S. J. King (Warracknabeal), who. presided at the largely attended gathering of farmers of this portion of the north-west at the Warracknabeal Town Hall on Thursday afternoon, May 23, said that it was pleasing to see so many men who were vitally concerned with the stabilization of the wheat industry.

All wheat-growers who attended that meeting are in favour of stabilization, but they are opposed to the present scheme. One of the speakers was Mr. A. 0. B. Shannon, who has been associated with the growing of wheat and other cereals for many years. His parents came from South Australia and were pioneers in- the industry. The report of his remarks reads -

Growers were the ones vitally concerned with the stabilization question, Mr. Shannon continued. Personally he had stuck out solidly for 5s. 2d. per bushel f.o.r. country sidings as a first advance. This was below present world prices, but he considered it a fair price. Just now growers were concerned about securing the greatest return possible for their product. Many had continued to y;row wheat at an unprofitable price, but had stuck to it in the knowledge that the world wanted wheat desperately and were prepared to do their part in supplying that need.

Mr. GiG.. McGregor, of Callawadda, who is well known throughout the Wimmera -

Spoke vigorously against the proposed stabilization plan, contending that 5s. 2d. per bushel f.o.r. was not sufficient. The wheatindustry was now at the cross roads and he saw grave danger in growers agreeing to accept any price that was not guaranteed above the cost of production, plus a reasonable margin of profit.

Mr. Hines,of Marnoo, a well.known Victorian producer also is reported to Iia ve ;

Expressed the opinion that one of the burning questions to consider was that of whether the 1945-46 harvest should be included in the stabilization plan.

The speakers at that meeting, who did not hesitate forcefully to express their views, are solidly behind the principle of stabilization. Honorable members opposite who declare that those wheatgrowers are opposed to stabilization are only trying to confuse the issue. The fathers of these growers pioneered this industry, which has helped to promote the prosperity of Australia. To-day, the sons are carrying on, despite drought and other adverse conditions. The report of Mr. Hines's remarks continued -

He opposed this and was also solidly against the plan, which in his opinion proposed to take away, the birthright of the wheat-grower. He did not favour growing wheat and handing it over to the Government- at the _price they proposed to advance.

Those' passages, which I have read, reflect the hostile feeling of the meeting towards the plan. Only three spoke in favour of it. During the main supporting speech, a steady moan could be heard throughout the assembly, and this speaker was the only one to whom the meeting refused to grant an extension of time. When the motion that he be. granted an extension was put the " Noes " resounded and echoed throughout the hall. After further discussion, Mr. J. Feeny, of St. Arnaud, submitted an amendment -

That the meeting refuse to accept anything less than was asked for by the Wheat Growers Federation at the Perth conference.

With the consent of honorable members, I shall incorporate in Ilansard the decisions of that conference-^

(a)   Thai the Federal Government be requested to se_t ,up a commission of inquiry on which wheat-growers- should have adequate representation, to ascertain the cost of producing a bushel of wheat, the guaranteed floor price to be the cost of production as determined by the commission with provision for a review every year to relate the price to any rise or fall in the cost of production.

(6)   That in view of the legal doubt that the 1945-46 harvest being acquired under National Security (War-time) Regulations cannot be included in the peace-time plan, this crop be excluded.

(o)   That the federation request that the 1945-46 harvest be not included in the plan as it had been acquired under National Security (War-time) Regulations.

(d)   That pending the setting up of the commission of inquiry to ascertain the guaranteed floor price, the 5s. 2d. be accepted as a first advance payment only;- that any difference between the 5s. 2d. f.o.r. as a first advance payment and the determined guaranteed floor price as found by the commission be made up by retrospective payments to the guaranteed floor price.

(e)   That the reserve fund be controlled by trustees appointed by the Australian Wheat Growers Federation and the Australian Wheat Board and invested to earn current interest rates.

(f)   That when the export price exceeds the determined price, 50 per cent, be paid to the reserve fund to be drawn upon when prices recede below the guaranteed floor price; the balance of 50 per cent, to be paid in cash to the grower; any deficiency in the reserve fund to be made up of a grant from the Treasury.

(g)   That the Federal Government be requested to introduce legislation with the object of giving the Australian Wheat Board the necessary statutory powers to assume full control of the production, acquisition, care, sale, distribution and export in conjunction with the Wheat Stabilization Board, and the financing of Australian wheat, together with power under the authority of the Common- ' wealth Treasurer to negotiate the necessary advances direct with the Commonwealth Bank.

(h)   That a system of wheat licensing and farm registration be included in the plan under the control of a wheat stabilization board.

(i)   That production be not restricted below a basis that will permit a minimum of 90,000,000 bushels for export. (j)That the plan operate for a period of not less than ten years.

Those decisions were in conformity with the object of the amendment which I am supporting. Meetings have been held throughout the Wimmera district to protest against the stabilization scheme, and, as the representative of that electorate, I should fail in my duty if I did not voice strongly that opposition. The wheat-growers of the Wimmera are concerned about what will happen to the fund if the stabilization scheme should be discontinued. We know what is happening at present in regard to funds that have accumulated from the sale of wool. More than £7,000,000 has accrued in profits from the sale of wool. The woolgrowers desire to know whether they will receive the whole or even a part of this money, to which I believe, as I observed during question time yesterday, they are fully entitled. Asimilar accumulation of funds may occur in the wheat stabilization fund. If so, will the money be distributed to the growers or will it be paid to other persons in the community who may have had nothing to do with the growing of the wheat? What will be the position of the wheat-grower who, through no fault of his own, has to withdraw from the industry after some years of association with it? Is he to lose one-third of his earnings which may be held in the stabilization fund? These points do not appear to be dealt with in the bill. What will be the position of the man who is operating on a temporary permit and whose permit may be cancelled? Ishe to lose his right to the proportion of his earnings that is being held in the fund. Surely he is entitled to his equity. The Minister has not made these points clear, and we are entitled to information upon them. I am definitely opposed to the Government's stabilization scheme in its present form. I have always favoured stabilization, and I favour it to-day, but it must be on right lines. At the committee stage I shall refer to many other anomalies in the bill which should not be accepted by honorable members. The only means we have of assuring our future progress is by decentralization through the provision of better conditions for primary producers. True prosperity in this country when it comes will come through the sheep runs and the golden harvest fields.

Mr.BREEN (Calare) [3.54].- The plan which the Government is proposing in this measure for the stabilization of the wheat industry for a period of at least five years is, in my opinion, practicable. In principle it is accepted even by those who, for political purposes, are trying to work up hysteria among certain sections of the community against the Government. The rival scheme proposed in the amendment of the honorable member for Indi (Mr. McEwen) would undoubtedly be good if the Commonwealth Government and the people of Australia could fairly be called upon to guarantee the fund by the making of inordinate contributions from public revenues. I propose to address myself chiefly to the points of difference between the scheme of the bill and that of the amendment. Both schemes rest on the common ground that the wheat industry cannot stand on its own feet in Australia or anywhere else in the world, and that stabilization depends upon international agreements and organization in exporting countries of schemes which can be dovetailed one into the other. Only by that means can prosperity be guaranteed to those who produce the food of the world. Food production has exercised the minds of members of governments from time immemorial. Even in the days of Livy, Cicero and- Caesar, corn was regarded as a munition of war, and it was recognized that one .way to stabilize the affairs of the nation, and to- discourage people from developing revolutionary activities, was to ensure an adequate supply of food. It was appreciated that if people were well fed . they would be less likely to listen to the fulminations of agitators against existing governments than they would if they were ill.-fed.

The main questions at issue between the Government and the Opposition are. first, whether the 3945-46 harvest should be included in the stabilization scheme; and, secondly,- whether the guaranteed price should be foi- a longer period than five years. The Government has had to consider whether it would- be giving undue consideration to one section of the community as against another section if it did not insist that advantage be taken of the high price temporarily ruling overseas for wheat, in order to assist to ensure the payment, of the guaranteed minimum price for the five-year period. T do not believe that any economist or any other reasonable person, howover rabid he might be in his claim for consideration for the wheat-growers, could do other than admit that the high prices now ruling for wheat in America, and also in certain other overseas countries, as against the fixed price in Australia, are due to the fact that in those other countries there is no price-fixing structure. It must be remembered, also, that the wheat-growers in Australia, who are also consumers of wheat, are receiviug the advantages of our economic structure in relation to wage-pegging, the control of interest rates, and the keeping clown of transport costs. All these factors are important considerations in determining the cost of producing wheat in Australia. It would be unfair to permit one section of the community to obtain that advantage without having to supply a proportion of its production to others who had helped to make it possible. Those who have the benefit of having their views expressed in The Land, the newspaper owned by the Farmers and Settlers Association, .are strongly opposing this scheme, in my opinion purely for political purposes, and. have proposed as an alternative that the 1945-46 harvest should be completely excluded from it, the wheat-grower to have the advantage of a hardandfast cost, structure in Australia and at the same time to benefit from the price fixed on chaotic inflationary conditions overseas. In order, to show that those who contribute articles to the journal I have mentioned can " see the light " from time to time, even though their employers are politically prejudiced, I quote this leading article which was published in The Land on the 12th July - '

Hie world demand for wool may be only one factor in causing a big rise in prices and it may be the least important one. The main l en son may be the degree of inflation existing in many other countries. If great increases duc to depreciated currencies overseas are to be reflected in fantastic prices for our wool mid other export commodities then it will bc more difficult than ever to prevent a higher degree of inflation in this country with its accompanying fall in the value of the Australian fi.

As a factor in establishing overseas credits, wool is more vital than wheat to Australia. If the argument of The Land be logical in regard- to wool, is it not equally logical in regard to wheat? I have said that the Australian wheat producer is also a wheat consumer in certain circumstances: In this farflung land of ours, "Western Australia may have a bounteous harvest, and simultaneously New South "Wales may experience drought conditions, as is the case at the present time, the wheat crop prospects not being good. If there were no control, the wheat-producers in Western Australia would reap an advantage from the high prices ruling overseas, but only for the time being. ' What position would arise when the wheat-grower in New South Wales, who has become accustomed to feeding his stock on wheat, had to purchase his requirements at the prevailing high prices? In order to substantiate my statement that the wheat-grower is also, at times, a consumer of wheat, I shall cite a few statistics from the return by the Wheat Industry Stabilization Committee in New South Wales as at the 31st May, wheat. Without some control, and a stabilization scheme backed by the Government, which will ensure that the price will, not fall below a fixed minimum, there is chaos following a good harvest. That is another reason for the whole- hearted support of this scheme by the wheat-farmers in my electorate. The political hysteria that has been worked

One matter needs a little consideration by the House; that is, whether the .wheat-grower should be in complete control of wheat marketing schemes. If this were merely an equalization scheme; if the surplus receipts were placed in a pool, and were disbursed among the wheat-growers when the price of wheat was low, then they would be entitled to complete control. But if such an arrangement were practicable, the wheat-grower would not need to ask the Government for assistance in organizing the marketing of his product, because that could be done by his co-operative organizations. Honorable members of this House" know that, having regard to the cost of production, a sufficient price cannot be guaranteed without a background of Government finance. If the Government has to guarantee a minimum price, irrespective of whether or not there is enough money in the pool to meet the guarantee, it is entitled to be represented on any body which controls the scheme. As the Government advances public funds, it is entitled to. have some voice in the disbursement of them. If this scheme- is handled properly, and many of the abuses that have occurred in the past are eliminated, there will not be much need for

Government assistance. Having studied some actuarial calculations, I was inclined to the belief that a minimum guarantee of 5s. 2d. a bushel f.o.r. might oblige the Government to provide a substantia'! amount, having regard to the past history of the wheat industry. But I have before me rather illuminating figures which have been taken out by Mr. 0. T. Chapman, president of the South Australian Wheat Growers Association. He has taken a period of 21 years, but I shall deal only with the period from 1929-30 to 1942-43, in which the price fluctuated by as much as 3s. dr 4s. a bushel. Over that period of ten years, if an equalization scheme only had been operating, the wheat-farmer in South Australia would have received 4s. 6£d. a bushel for his wheat at Moonta siding. With such a background, it could be argued that the Government might not need to underpin the scheme by providing government finance for the next five years. If this scheme is to be financed for only five years there is nothing wrong with the wheat-farmer who produced for the 1945- 46 harvest foregoing some of what he would have received, seeing that the price that he will get per bushel for what he produced in the 1945-46 harvest will be far above the cost of production, even 03i the assumption that it was much higher in that year than it had been in any previous period. As against this, the question is asked : What will be the position of a farmer who was in production at that time, and now wishes to sell his property? What is to happen to his equity? I remind honor-, able members that much thought has been given to the rehabilitation of exservicemen. Because they were in the armed forces it was not possible for them to have been producing wheat during the period from 1942 to 1945. If the Government had hesitated to throw everything into the defence of Australia, it is doubtful whether the farmer who had. a good harvest in 1945-46. would have got the benefit of it. Some one else might have gathered that harvest. The fighting men of Australia are primarily responsible for the preservation of Australia from its enemies, but, as I have said, they were not able to grow crops during the period from 1942 to 1945. thus, the farmer who was able to carry on during that time, while others were away fighting for him, will be making a comparatively small contribution under this scheme to the post-war stability of the ex-serviceman who goes on the land and raises crops from now on. The asset of the farmer who remained on his land has been enhanced in value as a consequence of the sacrifices of ex-servicemen, and it is those ex-servicemen whom we must consider during the next four or five- years. I have a poor opinion of the patriotism of anyone who is not prepared to do what is necessary to guarantee the economic stability of ex-servicemen in the time ahead.

I confess that the figures which I have cited astonish me. I believed that, over the period under review, the arrangement for price equalization would not meet the situation, and that the scheme would have to be buttressed by a Government contribution. But that may not be necessary. In the past, the average wheat-grower lived from year to year. Even with the assistance of co-operative organizations, growers were generally unable to hold ' their wheat for two or three years. They had to sell immediately the wheat wa.= harvested, with disastrous results to themselves. However, with a Government guarantee, an equalization scheme must be successful.'

We must' also give attention to methods of preserving stored wheat from . injury. Conditions during the next four or five years will be very much the same as those which prevailed immediately after the last war. Honorable members will recall the .big harvest after the last war, and the drought which followed. They will also recall scandals associated with the disposal of second-grade wheat, and wheat damaged by mice. The British Government had acquired a part of the Australian crop, and it sent, Professor Lefroy to Australia to investigate the situation. At that time, there were no silos for storing wheat, and it was necessary to stack in bags. Discussing the situation as it then existed, Professor Lefroy said -

The sound policy for Australia is to cultivate as large a stock of wheat as possible. There will bc a terrific food shortage after the war.

How well .that could be said of the situation which exists to-day. The professor went on -

Wheat can be saved from weavil. Stored, as 1 suggest, your wheat will keep indefinitely - 1 will guarantee five years at least.

It is still possible to preserve bagged wheat for at least five years. Conditions are much the same now as after the last war, and they should produce the same result, so let us be guided by what happened then. We should guarantee to the grower a f air return for his labour, while still ensuring that the people will get their food at a price which they are able to pay. That is of fundamental importance. If food is npt made available to the consumers at a price which they can 'pay it follows axiomatically that the wheatgrowers themselves cannot be prosperous.

Various commissions have been appointed to find out the cost of producing wheat.. The Gepp Commission made an exhaustive inquiry into all' phases of the industry, an4 arrived at a figure based upon an average of the costs on a limited number of farms. I suggest, however, that such a system cannot produce satisfactory results if there is. a big diversity of costs on the farms under consideration. In the electorate of the honorable member for Indi (Mr. McEwen), I have seen men trying to grow wheat on irrigated land. The cost of producing wheat under such conditions could not be less than £l a bushel, and such a result should not be taken into consideration when assessing the average cost of production. There are areas in New South Wales where it would cost 10s. a bushel to grow wheat, whilst there are others in which the cost would not be more than 2s. 6d., provided the farmer has been on his land for years, and holds it free of debt. Of course, if a farmer, even in the same area, bought his land during recent years at £14 or £15 an acre, he could not possibly grow wheat at 2s. 6d. a bushel. In arriving at a fair figure for the cos.t of producing wheat we .should consider the cost on a fair, average sample of Australian land the capital value of which is reasonable. No good result would be achieved by trying to strike an average over the last 50 years, during which prices were sometimes high and sometimes low. It is also necessary to consider whether ; the farmer's position is financially sound, or whether he has to pay out too great a part of his returns as interest on borrowed money. The Gepp Commission found that the two principal items in the cost of production were labour and interest. Interest charges have been considerably reduced because of the operations of the Commonwealth Bank. When farmers .had to go to private banks for overdrafts, the rate of interest varied considerably as between one borrower and another, depending upon the bank manager's idea of the applicant as a business risk. For instance,- one-man might have to pay 6i per cent, on his overdraft, whilst another might get money at 4£- per cent. It will be seen how this factor alone could seriously affect the cost of production as between one farm and another, even though the land might be similar, and both farmers received the same price for their crops. Since the Commonwealth Bank has -gone into, active competition with the private banks, and since interest rates have been under the control of the Prices Commission, there has been a general decline of overdraft rates of interest. At the present time, the average overdraft rate in the wheat belt is no more than 4 per cent, whereas, in 1939-1940, it was between 6 per cent, and 7 per cent. This reduction is one result of the increased trading activity of the Commonwealth Bank and of the financial policy of the Labour Government.

The other important factor in the cost of producing wheat is the cost of labour. The average family of men on the land is larger than the average family in the city. In urban areas, the average family is a man, his wife, and one and a half children, whereas in rural areas it is a man, his wife, and three children. When the children of the farmer grow up, unless they leave the district to seek jobs elsewhere, they must be kept by him, and the cost of maintaining them must ultimately be added to the cost of producing wheat, because their labour is used in the working of the farm. Tractors were not used extensively on farms at the time the Gepp Commission made its report. Indeed, the commission reported that it had considered the incidence of power farming, and had found that many farmers had abandoned tractors and gone back to horses. The commission could not say whether it was more advantageous to use tractors or horses. At the present time, however, there is a tremendous demand for tractors, which have revolutionized wheat-growing. We have learned much from the Americans during the war about the mechanization of farming operations. To-day, the farmer realizes that he is " not in the hunt " if he has to depend on horses. Because of the vagaries of the weather, it is sometimes necessary that a farmer should work 24 hours a_ day in order to sow his crop or harvest it. This, can be done with tractors, but not with horses. A tractor for use on a single-unit farm may cost £800 or £900, and its use does away with the need for much labour. Thus, unless mixed farming is indulged in, there is little for the members of the farmer's family to do, and the cost of their upkeep must be added to the cost of the tractor, and so to the cost of producing wheat. We must take into consideration the fact that, unless something can be done in the way of establishing industries in country towns to provide employment for the members of farmers' families, the young people will either drift to the metropolis and be engulfed there, or their upkeep must become a charge against the products of the land.

In the future, when the demand for wheat lessens, it may be necessary to limit production arbitrarily on certain kinds of land. . Either an arbitrary rule will have to be made under which, say, " A " is given a licence to sow 250 acres and " B " a licence to sow 200 acres, and the rest of their properties is eliminated, although it might be very good wheat land, or a guaranteed minimum price will have to be fixed at such a rate as to eliminate wheat-growing in all areas where a good crop cannot be harvested under all. conditions. Because of the diversity of methods of production' and of the great number of unknown factors I do not favour the application of such an arbitrary rule. Again, if a farmer is not properly financed he may be forced out of production, even though he may be farming the best wheat land in the country. Such a farmer would not be able to grow wheat again.

The honorable member for Barker (Mr. Archie Cameron) dealt with the aspect of international agreements at some length last night, and, having given the subject some intense study lately I was naturally interested -in what he had to say. International agreements for wheat production and marketing will not be of much use unless all signatory countries are prepared to honour the spirit as well as the letter of the agreement. From time to time over the last 20 or 30 years conferences of representatives of wheat importing and exporting countries have been held in an endeavour to devise a scheme that would obviate violent fluctuations of the price of the world's principal foodstuff. Through failure in the past to get an international agreement, European economy has been inclined to develop a European hegemony under which the Danubian countries would supply wheat to importing countries .such, as Italy, France and the other western nations of Europe. That move, however, failed because of national disagreements and the consistent endeavour of one- country to obtain an advantage over another.- When war was imminent we had the spectacle of the United Kingdom subsidizing wheatfarmers to produce wheat at a price which could not compete against imports from other countries more suitable to wheat production. France, Germany and Italy did likewise. Then, the great wheat exporting countries of the Balkans were left with surpluses which were debarred from entering other countries because of their fiscal policies. These surpluses were thrown on the markets of the world where they came into competition with wheat exported from Canada, Australia and the United States of America. The industry suffered a great slump, and many wheatfarmers were quickly forced out of production. Countries which had large surpluses of wheat were not in a position to . guard the grain against deterioration, and so huge quantities were wasted. Yet within two years the world was starving for wheat and once again wheat-growers in all countries rushed into production. Unless the wheat exporting countries are prepared, to settle their differences and honour the spirit as well as the letter of international agreements respecting the disposal of the world's wheat harvests, anything that we do in this country to stabilize the wheat industry will not be effective because we have not the wealth to subsidize exports. If, in order to obtain overseas funds we subsidize our wheat exporters, it would have to be done at the expense of some other section of the community. Australia is in a very favorable position with regard to its wool exports, . because it has almost a world monopoly of wool of the merino type. "Without our merino wools the markets of the world would be short-supplied. But even if we failed to market a bushel of Australian wheat overseas it is more than likely that in normal conditions the world would be well fed. Accordingly, it might not be to our interest to subsidize wheat exports in order to obtain overseas credits. It might be far better to abandon any thought of exporting wheat and to concentrate on growing sufficient for home consumption and stock feed, and to convert much of our wheatlands into cattle or sheep raising areas. The Gepp Commission in its conclusions on the wheat industry said -

The wheat industry has an undoubted claim to assistance from the community. This claim is the greater because -

(a)   the industry probably provides more direct employment than any other single industry in Australia;

(6)   the industry provides almost 20 per cent, of the freight earnings of, and approximately the same percentage of the total tonnage of goods carried by the railways of the four principal wheat-producing States;

(o)   numerous towns and townships throughout the four principal wheat-producing States are dependent in a larger or smaller degree upon the industry for their existence; (<{) the industry contributes a substantial proportion of Australian credits overseas; "

(e)   13,622,358 of the 23,978,157 tons of cargo shipped from Australian ports in the period from 1927-28 to 1931- 32 was provided by the wheat industry.

This question of the stabilization of the wheat industry in Australia is not merely a matter of resolving what is right and just for the farmer and fair to the consumer, but is also vital to our national economy, and every section of the community must accordingly be greatly interested in it.

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