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Thursday, 18 July 1946


Mr FORDE (Capricornia) (Minister for the Army) . - I move-

That the bill be now read a second time.

The purpose of the bill is to authorize an extension of the bounty on Australian production of raw cotton for five years from the 31st December, 1946, in an amount sufficient to guarantee growers an average net return of15d. per lb. of raw cotton, above the grade known as " strict good ordinary " produced from the 1947 crop and thereafter until the 31st December, 1951. This net return will include any net return to growers from sales of by-products of raw cotton such as linters, cotton seed oil, and cotton seed meal. The total amount of bounty payable under the existing Raw Cotton Bounty Act in any oneyear is limited to £170,000, and any portion thereof unspent in any year is available for bounty payments in later years in addition to the £170,000 provided for each of such years. The existing raw cotton bounty legislation providing a guarantee of 15d. per lb. for this highgrade raw cotton will expire on the 31st December, 1946. Early adoption by the Parliament of the presentbill is necessary to encourage re-establishment of the cotton-growing industry in Australia on a sound economic basis.

In its report of the 15th October, 1945, at the conclusion of a public inquiry, the Tariff Board made the following principal recommendation : -

(a)   That bounty be granted for a period of two calendar years from the 1st January, 1947, at a rate having the same effect as a pre-war basic rate of 3¼d. per lb. of raw cotton of grades higher than " strict good ordinary " gradewhen the Liverpool spot price of American middling grade raw cottonin. staple is6d. sterling per lb.,varying conversely according to fluctuations in the Liverpool spot price, with a maximum limit of 5½d. per lb. bounty. Half rates to be paid on raw cotton of strict good ordinary and lower grades.

(b)   The total amount of bounty payable in any one year to be limited to £170,000 without any carry-over of unspent balances.

During the ten-year period, 1935-44, production of raw cotton in Queensland has declined from an annual average of 10,127 bales, each of 500 lb., to 1,305 bales for the 1945 cotton season. Such retrogression is due mainly to the extreme shortage of man-power and a changeover urged by the Commonwealth Government from cotton to food production. An incentive to the change-over was the high prices guaranteed for dairy and other food products. During the tenyear period mentioned,consumption of cotton in Australia by spinners increased from about 15,000 bales each 500 lb. in 1935, to a peak of 64,348 bales in 1943, falling to 54,751 bales in 1945. Consumption by industries other than spinning mills, for example, manufacturers of bedding, upholstery, paddings, wadding, absorbent cotton wool, and other products, now represents about 5,000 bales annually, mainly low grade, very short staple cotton not suitable for general spinning requirements. It is esimated that about 60,000bales of raw cotton will he consumed by local spinners during 1946. "while about 5,000 bales will be required for the other industrial purposes.

Apart from certain comparatively minor modifications, the basic rate of bounty recommended by the Tariff Board, that Ls, 3Jd. per lb. of high-grade rawcotton, is the same as that originally recommended by the board in. November, 1933, and subsequently confirmed on several occasions. This was regarded by the Government as too low to be of any real assistance to the cotton-growing industry, and therefore has never been accepted by the Parliament. If the Tariff Board's recommendation were adopted, the result would probably be that most growers would abandon the industry as, in the event of any considerable decrease of overseas cotton prices, the returns to growers from sales of raw cotton in competition with imported cotton would be 'insufficient to enable them to carry on. Abandonment of the industry would involve the closing of ginneries and a cotton seed oil mill on which £160,575 has been invested. This plant is owned by the Queensland Cotton Board, which is a co-operative growers' organization. The organization has given splendid service to the Queensland cot; ton-growers. The general manager is Mr. J. D. Young, a very capable gentleman,, who succeeded Mr. R. J. "Webster when, he left to take the position of managing director pf the Bradford Cotton Mills. Mr. Young has made a close study of the cotton-growing industry and he and the. members of the board, which consist? .of cotton-growers, have devoted themselves to the interests of the industry in collaboration with the Minister for Agriculture in Queensland, the Queensland Government, the Commonwealth Minister for Trade and .Customs and representatives of cotton-growing districts regardless of the political party to which they may belong. Therefore, it is gratifying to me, as representative of a district where 85 per cent, of the cotton grown in Australia is produced, to find that this bill has been approved by the Government of . which I am a member and will . be approved, 1 believe, by the Parliament. The by-products ' of raw cotton are of great economic value. A crop of 15,000 bales of raw cotton would result in the production of the following principal by-products: -820 tons of edible cotton seed oil largely used in the production of bakers' shortening fats; and 3,000 tons of high protein cotton seed meal for stock feeding, particularly dairy cattle during periods of drought.

Honorable members may recall that the 1940 raw cotton bounty legislation was associated with undertakings given by the Queensland Government that steps would be taken to improve efficiency by

(a)   converting the industry from dryfarming to irrigation by the most, economic means for each selected locality. In this connexion, cotton-growing under irrigation would probably result in a large increase of yield per acre with considerable reduction of production costs and improvement of the quality of raw cotton produced; (b) encouraging growers generally in the adoption of improved cultural practices; (c)' accelerating scientific work on plant breeding, measures to combat insect pests, plant diseases, soil tests and new problems likely to be encountered with production under irrigation.

Since initiation of the cotton stimulation programme in 1939-40, the Queensland Government has spent the following sums up to the 30th June, 1945 : £291,000 on investigations and research directly related to cotton production, assistance to growers and provision of irrigation facilities, including pumping plants; £49,000 on water conservation and irrigation projects ; £17,000 on investigations on general' irrigation and construction programme carried out mainly in the cotton-growing areas; a total of £357,000. Proposed irrigation works comprising 30 weirs, to be built during the immediate post-war period, are estimated to cost a further £296,000. Full implementation of the undertakings was prevented by war conditions beyond the control of the Queensland Government. The causes were mainly shortages of labour and materials.

I note from consultations with the Premier of Queensland", Mr. Hanlon, the Treasurer of Queensland, Mr. Larcombe, who represents Rockhampton, and the Minister for Lands, Mr. A. Jones, M.L.A., that they are all cognizant and appreciative of the great importance of going right ahead with water conservation and irrigation 'schemes in order to make it possible for agriculturists in Queensland to step up production of raw cotton very substantially and, in addition, to carry on, of course, with the benefit of irriga- tion, other agricultural pursuits, and for dairy-farmers to go in for fodder conservation in good seasons to tide them over droughts like that through which they are unfortunately passing in the Queensland coastal dairying districts. I am pleased to note that the Queensland Government has already prepared tentative water conservation and irrigation schemes; They have been surveyed by the Bureau of Investigation over the last three years. They may have to give way for the time being to works of greater economic value; but I give full credit to the Queensland Government for the keen interest it has taken in the matter of water conservation and irrigation. Now that the war is over they are pressing ahead with the, projects which, after proper investigation, Will be put to the Loan Council in August. I believe that approval will be given to the projects. .1 know that as the result of water conservation and irrigation we shall find that the production of raw cotton .will be more than trebled in many of the present cotton-growing districts and other districts that have not been exploited to the' full ; utilization of the water of the Dumaresque River will, I believe, benefit not only border districts of Queensland, but also New South Wales, and will make it possible for a big expansion of cotton-growing. In addition, in the electorate I represent, in the North Burnett district from Mundubbera to Monto up to the Dawes Range and in the Boyne,. Dawson and Callide Valleys many water conservation and irrigation projects can bc developed under the scheme proposed by the Queensland Government. That Government and the cotton-growers can rest assured of the fullest co-operation on the part of the Commonwealth in the implementation of those projects, which I have no doubt will enable the industry to increase the production substantially.


Mr Harrison - How many cottongrowers reside in the Minister's electorate ?


Mr FORDE - This is a great national question, which transcends consideration of any benefit which is likely to be gained by any electorate represented by any individual member of Parliament. I notice the chairman of the Queensland Cotton Board, "Mr. E. J. Basson, in the gallery, and I am sure that he realizes the national importance of the industry. Whilst Australian manufacturers require 65,000 bales of cotton, our production last year was only 1,300 bales.. Provided water-conservation and irrigation schemes be undertaken, the industry is capable of tremendous expansion. Any one who has been associated with closer settlement in Queensland can ' recall the days when pioneers in the Upper Burnett and Callide and Daw-son Valleys, after clearing their land, planted cotton among the charred stumps, and obtained an early and ready return for their labour. They were thus enabled to 'purchase stock and engage in the dairying and pig-raising industries. Cottongrowing is essentially a small man's industry. Farmers in those- districts -will 'not need in the future to put all their eggs in one basket, but will be enabled to engage in a diversity of production . by the rotation of crops.

Prior to 1941, the bounty on raw cotton was on a gradually reducing scale related to a Liverpool spot price of 6d. sterling per lb. and fluctuating conversely in accordance with changes in that price. This arrangement was not regarded by growers as offering any real sense of security, whereas the provision of .a bounty in an amount sufficient to provide a guaranteed net return for high grade raw cotton, tends towards achieving stability and' gives, some encouragement to farmers to incur capital expenditure on irrigation plants and other equipment necessary for improved methods of cultivation. Farmers in the areas I have mentioned, more than trebled their production of seed cotton as the result of water conservation and, irrigation. Recently, when I visited Bingerra in the Bundaberg area, I had an opportunity- to see what had been accomplished by Messrs. Gibson and

Howes, by damming the Burnett River and utilizing 10,000,000 gallons of water a day on the firm's plantation and on adjoining farms. They increased . the yield on their sugar plantations to 100 tons an acre in some parts, whilst the average over the whole of the plantations was 39 tons of cane an acre, compared with an average of- 22 tons an acre for all sugar areas in Queensland. I can see no reason why, with the aid of irrigation our cotton production could not be stepped up to a corresponding degree.

The Liverpool cotton exchange closed on the 21st March, 1941, and is not likely to re-open during the life of the present United Kingdom Government, which has u further four years' tenure of office. The "New York cotton exchange quotations are not now regarded as suitable as a ha.se for bounty linkage because export -sales are mainly effected in the United States of America on the average prices of the ten southern cotton markets, less an export subsidy of approximately four scents per lb. The resultant export prices ^therefore differ from New York quotations. Under existing conditions, with selling prices of . Australian-grown raw cotton at 18d. per lb. basis c.i.f. spinners' ports, as fixed by the Prices Commissioner, a crop of 3,000 bales or higher would reduce overhead expenses associated with- ginning, classifying and handling, to such an extent that the net return to growers would most likely be 15d. or more per- lb., thus relieving the Government of the payment of a bounty. It may be possible to obtain within the next few years an annual production . of 20,000 bales of raw cotton, thereby reducing further the costs of production with corresponding increases in the net returns to growers.

With the stability that will be given to the industry by the payment of this bounty and the stimulus to production resulting from the provision of waterconservation and irrigation schemes, together with an incentive price in respect of the whole of the crop on the basis of the price of imported cotton, I have no. doubt that the production of raw cotton in Australia will be substantially increased. The Commonwealth will do everything it can to help the industry produce the whole of Australia's require- ments. This achievement would help us in many ways, particularly by easing our position in respect of dollar exchange and transport difficulties. . We are .experiencing' considerable difficulty in obtaining supplies of raw cotton from other countries. India is averse to shipping cotton to Australia, whilst we find it very difficult to obtain supplies from the United States of America. In these circumstances we shall be compelled next year to purchase most of our cotton from Brazil.

The Australian price , of overseas raw cotton comparable with that produced in Queensland, is now somewhat higher than the price at which the Prices Commissioner has authorized purchase of the Queensland crop, namely, 18d. per lb. basis c.i.f. spinners' ports. Raw cotton is admitted free of duty. In accordance with the existing prices stabilization scheme, both the Australian and the imported raw cotton are supplied . to spinners for making yarns for hosiery, for weaving, and for certain high quality cordage, also for manufacture of combed yarns, at 14£d. per lb. There is therefore good reason for the continuance of bounty assistance . on raw cotton produced in Australia at the existing level as now proposed. The possibility of any considerable decrease in the price of imported raw cotton appears to be remote for three or four years at least. There is at present a world shortage of desirable types of raw cotton suitable for general spinning requirements with resultant high prices, and the Government of India, which is the second largest cotton producing country in the world, has prohibited .the export of raw cotton of 13/ic-in. staple or longer. The extension of the period of the operation of the bounty, as now proposed, should" be recognized by growers and the appropriate State authorities as affording an excellent opportunity for the further development of plans with the express object of increasing efficiency aud reducing production costs. In this connexion, overseas experience proves clearly that production costs can be substantially reduced by producing raw cotton under irrigation. In the United States of America, Egypt, the Sudan, and several other countries, the yield per acre under irrigation has always been at least three times as high as the yield under dry-farming conditions. Similar results have been consistently achieved in the comparatively small irrigated area in Queensland. Experience over many years in the cotton-growing districts of Queensland has proved that rainfall and other important climatic conditions are too variable and unreliable for the consistent economic production of raw cotton under dry-farming" conditions, except in a comparatively few small areas. The Queensland Government fully realizes this fact, and it is hoped that the next year or two will witness a very marked advance in irrigation developments.

Picking or harvesting costs in Australia are high, representing about 1.64d. per lb. of seed cotton, equivalent to approximately 4.7d. per lb. of raw cotton. The Queensland Department of Agriculture and Stock and the Queensland Cotton Board have each purchased from the United States of America a mechanical cotton-picking machine. A light picker of another make recently developed in that country has been- ordered by the Cotton Board. The latter unit, which is designed for independent operation by means of a tractor, is expected to arrive in Australia within the next few months. Picking machines offer the prospect of reducing picking costs, which are at present, the highest of the costs involved in the production of seed cotton. The machines have given most promising results in trials, and will bc of particular value in harvesting irrigated crops, where the yield exceeds 300 lb. of seed cotton, per acre. The greater concentration of the farms under irrigation will' tend to facilitate mechanical harvesting. One of the principal reasons for the decline of production during World War II. was the labour problem. This is a seasonal occupation, and the conditions of employment in it, because of living conditions on scattered farms were not attractive. Furthermore, nearly all the workers were employed in the production of materials for the conduct of the war, and could not be diverted to the cotton industry. Members of the Australian Women's Land Army rendered splendid service within the limits of their ability, but their labour did not prove to- be. very satisfactory under which many of these farmers, unfortunately, are obliged to live at present.

The cotton-growing industry is worthy ' of all the encouragement that this National Parliament can give to it. Its potential value to the Commonwealth is considerable. This industry will assist the States' schemes for the land settlement of ex-servicemen. The Queensland Cotton Board, I understand, now has a representative on the staff of the Gatton Agricultural College. He possesses a sound knowledge of the cotton industry,, and is giving instruction to the young men who are being trained in agriculture, and to others who attend for short " refresher " courses. This instruction . will make a greater number of agriculturists in Queensland cotton-minded. Sufficient encouragement should be given to the industry to enable the possibilities of production under irrigation to be thoroughly explored and demonstrated.


Mr Harrison - Will the Minister inform me whether it is a fact' that cotton: growers in the electorate of Capricornia will receive about £140,000 out of the total amount of £170,000?


Mr FORDE - I urge the honorable member for Wentworth (Mr. Harrison) to deal with this industry as a part of a broad national plan. Cotton is grown not only in the electorate of Capricornia, but also in the electorates of Wide Bay, Moreton and Maranoa. There is no reason why cotton should not be grown in many other districts. When the proposed irrigation schemes sire undertaken, cotton will be produced in south-western Queensland and in northern New South Wales. I commend this bill to the House as one which merits favorable consideration because it will assist a great national industry which will be invaluable to Australia.

Debate (on motion by Mr. Adermann) adjourned.

Sitting suspended from 1S.J/.7 to 2.15 p.m.







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