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Tuesday, 21 June 1949

Mr POLLARD (Ballarat) (Minister for Commerce and Agriculture) . - in reply - The honorable member for Indi (Mr. McEwen), in debating the second reading of the International Wheat Agreement Bill announced that he spoke for both Opposition parties and that they supported the principle of an international wheat agreement. He reminded us that these parties, when governments, were the first Australian political parties to attempt to achieve an international wheat agreement, in 1933. Not a word, of course, of their failure to achieve success ! Attempts are creditable, but successes are admirable and reside with the Labour Government. The Opposition parties, when governments, had from 1917 to 1941 to stabilize the wheat industry, on both the home and the international front, and on both they failed miserably. After an affirmation of support of the principle of an international wheat agreement, the honorable member for Indi said that any controversy on the agreement could be only as to whether it was in the public interest or not, or in the interest of the 60,000 wheat-growers and the scores of thousands dependent upon the industry. He informed the House that there were two tests that should be applied to the proposal. I assume that a test of anything is to assess whether it is good, bad or indifferent, and that, after the application of such tests, a rational party, or individual, would either accept or reject ; hut the honorable member announced no decision as to the outcome of his tests. We know, following his form on last year's International Wheat Agreement Bill, that he and his party lack the courage to try to reject the bill. The first test so flamboyantly applied was whether the agreement was drawn in terms of legal enforcement. The honorable member answered that test himself by saying that it was not capable of being enforced. With that viewpoint I am in complete agreement, for this agreement can work successfully only by the exercise of good faith and international honesty. In this spirit the agreement will be accepted by the ratifying nations. To believe otherwise is to reject the whole concept of international co-operation. The honorable member was well aware of this when he boasted that the Opposition parties when in office attempted to achieve an agreement. These attempted agreements were no more capable of being enforced in the legal sense than is this particular agreement. It seems shameful that on a measure of this kind the leader of the debate on behalf of the Opposition should be the first to throw doubts upon the honesty of other nations which are parties to the agreement, and all the more astonishing in view of the fact that he went on to say that he had no doubt that whatever party governed this country during the next four years, the spirit of our obligations, and therefore the physical implication of the agreement, would be honoured. The honorable member for Indi considers that our honour in the field of international agreements is beyond doubt, yet others suspect us. .Surely that is a strange and warped viewpoint !

Mr McEwen - I said that our obligations were easily workable, whereas others were not.

Mr POLLARD - The honorable member should not quibble.

Mr McEwen - The Minister is quoting words out of their context.

Mr POLLARD - Although Opposition parties knew of the absence of socalled enforcement measures did they suggest any way or method of solving this problem? No; they adopted a purely negative attitude.

Mr Archie Cameron - Is the Minister reading his reply?

Mr POLLARD - I am speaking from copious notes. They are as extensive as the notes that the honorable member for Indi read so excellently during his contribution to the debate. The Opposition knew of the absence of enforcement measures in last year's agreement. It also knew of the absence of enforcement, in the legal sense, in this year's agreement, because the second-reading debate on the bill took place some weeks ago. Yet it did not suggest a method of overcoming the trouble. The absence of enforcement provisions did not deter the Lyons Government from introducing and ratifying the 1933 International Wheat Agreement. In any case what practical enforcement measures could be imposed? Is it suggested that the Australian Government either individually, or in cooperation with other parties to the agreement, could take military, naval or aerial action against a defaulting nation? Is it contended that if a defaulting nation had assets in Australia, those assets should be frozen as a means of enforcing compliance with the terms of the agreement, or that economic sanctions of any kind could be imposed? If these suggestions were practicable, it is quite obvious that there could have been no agreement. This agreement, like many others, whether they be individual, national or international, depends upon the good faith of the participating countries, all of which regard as important the respect in which they are held by other nations. If the Australian Government ratifies this agreement, following a debate in this Parliament, it will honour its undertaking, and will expect other contracting parties to do likewise. The second test that was applied by the honorable member was whether the agreement is in the interests of the wheatgrowers. The honorable member evaded the answer to his question by asking whether the wheat-grower would get more or less without the agreement. He answered that second question by saying that the wheat-grower is to get less forthwith. Of course that is an answer based on the assumption that the price of wheat will be greater than the International "Wheat Agreement agreed price in the world's markets on the 1st August, and that India will not have lifted its quota of 32,750,000 bushels before the 1st August. The honorable member also asked whether the acceptance of a lower price would offset the risks of perhaps a serious decrease of prices in the later years of the agreement. In this instance there was no answer by the honorable member. He " passed the buck " to the wheat-growers by saying that he would leave the answer to them. What do the wheat-growers say? Unlike the honorable member for Indi, I will answer that question, and not leave it to somebody else to do. On the 10th March, 1949, Mr. McCarthy, our delegate at the conference, advised that all importers except Australia were agreed about the maximum price of 1 dollar SO cents. On the following day I telephoned Mr. Stott, secretary of the Australian Wheat Growers Federation, and asked him to meet me in Melbourne to confer about the International Wheat Agreement. On Monday, the 14th March, I conferred with Messrs. Stott and Evans, secretary and president respectively of the Australian Wheat Growers Federation. I read to them the contents of cables that had been received from Mr. McCarthy, informing us that the United States and the United Kingdom were prepared to accept 1 dollar

SO cents as the maximum price under the agreement. I also read to them cable? from the Australian Government to Mr. McCarthy in Washington, informing him that in no circumstances would Australia accept a maximum of less than 2 dollars, and that he was te endeavour to hold the conference, which was on the point of breaking up, until we had consulted the executive of the Australian Wheat Growers Federation. The cable from the Australian Government to Mr. McCarthy on the 15th March reads -

Question of Government's attitude to nev proposal namely four year agreement with ceiling of one dollar SO cents and floor one dollar 20 cents was submitted to Cabinet to-day. It was decided that you adhere to present instructions pending consideration of the proposal at meeting of the Executive of the Wheat Growers Federation which will probably take place on Thursday 17th instant 1 add that the instructions to Mr McCarthy regarding the 2 dollar maxi mum were the same as those issued when he left Australia for Washington I suggested to the president and the secretary of the federation that they call their full executive together and convey to me. if they saw fit, their views whether we should accept 1 dollar 80 cents as a maximum or the obvious alternative of no agreement at all, or face the possibility of an international agreement between America, Canada and Russia. The federation called a meeting of its executive. There was a full attendance of delegates from all States, including the Wheat Growers Union of New South Wales, but the Farmers and Settlers Association of New South Wales, also an affiliated body, although it was invited, failed to send a representative to that meeting. On Friday, the 18th .March. I received the following telegram from the secretary of the federation: -

After considering a full report of the General Secretary on the International Wheat Agreement and the information supplied this conference has cause to believe that an Inter national Wheat Agreement may be arranged by the other exporting nations: -

(1)   That in any agreement so arranged between Canada, United States of America and Russia, Australis could not afford to remain outside as India and other nearby markets would be partially lost by Australia to the other exporting signatories.

(2)   That we are seriously perturbed at the attitude of United Kingdom in forcing down world prices of wheat to a ceiling limit of one dollar 80. The Australian Wheat Federation to cable the protest to the representatives of United Kingdom at Washington on this point.

(3)   That there appears to be no alternative but to remain in an agreement.

(4)   The Australian Wheat Growers Federation holds the opinion that a reasonable ceiling would be two dollars. However, we point out that we are forced to accept a ceiling of one dollar 80. We do so on condition that the greater proportion of the nearby markets to Australia are preserved to Australia under the quota.

(6)   The Australian Wheat Federation demand that it be kept in touch with every phase of the proposed International Wheat Agreement and further we demand a representative of the Association be sent to Washington forthwith and the Commonwealth Government be requested to pay his expenses.

That should answer all the talk by honorable members of the Opposition about the Australian Wheat Growers Federation offering to pay the expenses of its own delegate. I have no recollection of any proposition of that kind having been made. In any event, it would not have affected the Government's view on that point. The telegram continued -

(6)   That in the event of transport being arranged for a delegate to attend the Conference in time - Mr. T. C. Stott be selected as the A.W.F. delegate.

Honorable members will notice that the words " under protest " about which the honorable member for Indi had much to say, do not appear in this telegram conveying the views of the federation.

In addition to consulting the federation's executive, the Government went further. As on the previous occasion it met the full executive of the federation at Parliament House on Monday the 23rd May. At that conference the federation had an opportunity to advise against ratification. On the contrary, it recommended acceptance of the agreement, although it is true that a small group representing the Farmers and Settlers Association of New South Wales indicated their dissent. At the close of that conference, the president of the federa tion, Mr. Nicholls, of South Australia, said -

The proposal for an international wheat agreement was beyond question the most important matter discussed, and as far as I can sum up the situation it could protect our Treasury against a disastrous fall in wheat. It can underwrite our stabilization scheme and therefore we wish it and the stabilization plan the greatest of success. It naturally is experimental, but a start has to be made here. May it come to fruition and may both prove to be to the benefit of the wheat-grower, which we anticipate they will be.

It is quite clear, therefore, that the wheatgrowers' representatives were amply consulted, and that they took their courage in their hands and in no uncertain manner expressed their consent. Nothing like the same degree of courage was shown by the honorable member for Indi. He did not have the courage to vote against the 1948 agreement, and he will not have the courage to vote against this agreement. It is quite true the Australian Wheat Board was not consulted. The Wheat Growers Federation was considered to be a more representative body.

The rejection of the request of the Australian Wheat Growers Federation for representation at the conference has been raised. The Government considered that no good purpose could be served by any adviser from the federation being at Washington, because no individual adviser at Washington would be in a position to interpret correctly the point of view of Australia's 60,000 wheatgrowers. The conference, so far as voting delegates were concerned, was on a strictly government-to-government basis, and the Government must accept full responsibility for decisions made in the sphere of international agreements. It is worthy of note that when the Opposition parties were in office the Australian Wheat Growers Federation delegates were not invited to attend international conferences.

The honorable member for Indi also asserted that the ratification of last year's agreement would have the legal effect of varying contracts already made for the sale of huge quantities of wheat with the result of reducing, arbitrarily, the return to wheat-growers by from £12,000,000 to £13,000,000. He also said that this agreement involves a further loss to wheat-growers by a similar varia-tion of contracts already made. No sum of that magnitude was involved under the last International "Wheat Agreement, and no such sum will be involved in the ratification of this agreement. The best answer to loose talk of that kind is furnished by the reference to international wheat agreements in the report of of the Royal Commission on Wheat Marketing and Stabilization, Western Australia, in May, 1947. Mr. J. S. Teasdale was chairman of that commission. Referring to the prospects of an international wheat agreement, the members of that' body over the signature of Mr. J. S. Teasdale said in paragraph 24 of their report -

We do affirm our belief that the avoidance of booms and slumps, which characterize wheat markets would be of great benefit to producers.

That, of course, implies a possibility under any stabilization scheme, local or international, of lower prices at some periods with the compensating advantage of steady prices overall. The commissioners further stated in paragraph 64 of their report -

At the outset your Commissioners wish to make the assertion that neither they nor any one else can speak dogmatically about future wheat prices. There are uncertainties of today which become factors in the determination of wheat prices to-morrow, but which are unpredictable at the moment. 'Wheat prophets are no more dependable that weather prophets.

I reiterate that despite these risks of at times losing something, the federation when assembled at Canberra prior to the ratification of the 1948 agreement, and after a full explanation of its terms, did not furnish advice to the Government or to the Opposition as to the attitude the Parliament should adopt towards the agreement. On this occasion, notwithstanding the extravagant losses prophesied by the honorable member for Indi and his colleague, Mr. Teasdale, the federation indicated acceptance. It is interesting to note that I have received very few letters of protest from wheatgrowers opposing ratification of this agreement; and of all primary producers, wheat-growers probably are the most conscious of their long-term welfare. Yet, the honorable member for Indi went so far as to say that on the ground alone of inability to enforce the agreement as drafted, it stands condemned. Brave fellow! I now challenge him and the Opposition generally to call for a vote against the agreement.

I come now to the reference made by the honorable member for Indi to Canada's position under the agreement insofar as Canada's current four-year contract with the .United Kingdom Government ending 1949-50 is not affected by the International Wheat Agreement. The facts are that for the first two years the price was one dollar 55 cents a bushel and it was agreed that in December, 1947 the price for 1947-48 should be negotiated, and in December, 1948, that the price for 1949-50 should also be negotiated. It waa further agreed that in fixing the prices for these two years regard should be had to prevailing world prices over the course of the agreement. The price for 1947-48 was 2 dollars a bushel and in December last it was agreed that 2 dollars a bushel should also be the price for 1949-50, with the condition that if an international agreement were entered into the price of 2 dollars a bushel should be continued until the close of the four-year agreement, even if the international agreement pries were Jess; and, if there were no international agreement, that the 2-dollar price be reviewed with the object of a higher price being fixed.

These circumstances are in no way comparable with those of Australia. Australian sales to the United Kingdom were on a year-to-year basis and the prices were based on prevailing world prices. Canada made a four-year contract. I require to make one clear cut comparison only. Last year Australia sold its wheat to the United Kingdom at 17s. a bushel whilst Canada sold at 12s. 5d. a bushel. Australia's negotiations for the sale of the 60.000,000 bushels to the United Kingdom this year were undoubtedly influenced by two factors - the falling market and the possibility of a reduction of price under the international agreement. The world price in December last averaged 15s. a bushel. To-day it is 12s. 2d. a bushel, Canada.

The Australia-United Kingdom Agreement for 60,000,000 bushels from this year's crop was concluded after the terms of the international agreement were known and Australia, if the United Kingdom had been willing, could have bargained itself out of an association of the contract with the terms of the International Wheat Agreement. That of course, could have meant a refusal on the part of the United. Kingdom Government to agree to the Australian Wheat Board's proposition of 13s. 8d. a bushel to endofMarch delivery 1949, and 12s. 10£d. a bushel for deliveries to end of July, with subsequent negotiations to be entered into in respect of deliveries as from the 1st August. It is noticeable that the board, when it made its counter offer with the approval of the Australian Government on the 7th April, 1949, made no suggestion or recommendation for the exclusion of the United Kingdom contract from the terms of the International Wheat Agreement. The board apparently was conscious of the counter-bargaining which could follow. As a matter of fact it is still quite open for the board and the Government, when negotiating the final terms for the delivery of wheat after the 1st August, to provide for some of the 60,000,000 bushels to be inside the agreement and some outside. That is a matter for mutual agreement.

Let us turn now to the question of ministerial interference and ministerial authority, of which so much play was made in this Parliament on the occasion of the debate on the last International Wheat Agreement, and also when the honorable member for Indi spoke in this debate last week, and seized upon the opportunity to magnify and distort the facts regarding ministerial powers in relation to the operations of the Australian Wheat Board.

The facts are that at its meeting held on the 28th December, 1948, the board gave consideration to the request of the United Kingdom Government to the Australian Government for large supplies of wheat. On the 30th December the board informed the Australian Government that it recommended a figure of 14s. a bushel for supplies to the United Kingdom Government. After full consideration of this recommendation, and taking into consideration the falling market and the magnitude of the quantities involved, the Australian Government informed the United Kingdom Government by cable on the 30th December that supplies would be forthcoming at 13s. 8d. a bushel. On the 28th January, the Government cabled the United Kingdom Government and requested a decision.

Mr Hamilton - Deliveries were still being made then.

Mr POLLARD - Would the honorable gentleman have held up deliveries to the United Kingdom simply because the price factor had not yet been determined and was the subject of negotiations that were still continuing between the Australian Government and the United Kingdom Government ? Honorable gentlemen opposite hypocritically talk about this matter. I point the finger at the honorable member for Swan (Mr. Hamilton) who talks about aid to Britain and about producing more food for Britain, but would not ship wheat to that country in the absence of an agreement on prices. I have demonstrated the. facts, which are that on the 28th January the Government cabled the United Kingdom Government and requested a decision. We were still at that time delivering wheat, although the price to be paid had not been determined. On the 2nd February, the United Kingdom cabled a counter offer of lis. lid. a bushel. As the Australian Wheat Board did not meet again until the 10th February, that counter offer could not be considered by it until then. But an officer of the Department of Commerce and Agriculture attended the board's meeting on the 10th February and all cables that had passed between the two Governments were made available. The board, after full consideration, approved a price of 13s. 8d. a bushel to the United Kingdom. From that date onward cables continued to pass between the two parties to the negotiations, until on the 31st March, 1949, I conveyed to the board a further United Kingdom offer of 13s. 8d. a bushel for supplies to the end of March and 12s. 9£d. for April-to-July supplies, with prices to be negotiated for later deliveries.

On the 7th April the board met, four grower members being absent. The United Kingdom's counter offer was considered and the hoard resolved to offer wheat at 13s. 8d. a bushel to the end of March, 128. l01/2d. to the end of July, the price from the 1st August to be decided in June. On the 8th April the Prime Minister cabled this offer to the United Kingdom Government and on the 24th April the United Kingdom Government accepted it. It will be seen from those facts that all the nonsense that has been talked about undue ministerial interference with the board cannot be sustained, and that the prices finally resolved on tallied with the board's own recommendations. It would be relevant here, perhaps, that I retrace my steps and make startling disclosures regarding the financial outcome of the United Kingdom 1947-48 wheat contract, about which the honorable member for Indi last year raised a simliar hullabaloo regarding ministerial interference.

Mr Spender - He seems to be on the Minister's mind.

Mr POLLARD - The honorable member for Warringah (Mr. Spender) is only a secondary consideration compared with the honorable member for Indi. The figures that I am about to give the House indicate that ministerial interference has some value, and in regard to the 1947-48 contract with the United Kingdom, such intervention saved the Australian wheat-growers from £6,500,000 to £7,250,000 compared with the returns that would have been received had the then Australian "Wheat Board's recommendation in connexion with the contract been insisted upon and approved by the Australian Government. Here are the facts-

Mr McEwen Mr. McEwen interjecting,

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