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Tuesday, 21 June 1949

Mr POLLARD (Ballarat) (Minister for Commerce and Agriculture) . - When the debate on the International Wheat Agreement Bill 1949 was adjourned earlier in the day I had illustrated how, had the Australian Government not intervened at the request of the United Kingdom Government, in connexion with a decision made by the Australian Wheat Board regarding the supply to the United Kingdom Government of 80,000,000 bushels of wheat from the 1947-48 crop, the income of the wheatgrowers of this country would have been reduced by about £6,000,000 to £7,000,000. I have given the figures regarding deliveries and quotations over four quarters of the year 1947-48, based on equal deliveries of 20,000,000 bushels a quarter. I shall now quote a calculation based upon the actual deliveries of wheat during the five quarters over which it was delivered to the United Kingdom. Honorable members may like to know what the results might have been had this wheat delivery been based on actual shipments. The main point is that shipments were smaller in the earlier part of the season, and there were still 12,000,000 bushels of wheat held, which would have run into the fifth quarterly period and prices for that period, still working on the price basis shown by the board, would have been 13s. 4 1/2 d. a bushel f.o.b. Australia. Here again, the hoards' proposals would have shown a gain for the first quarter's shipments and then a loss on a succeeding four quarterly periods. The gain of £1,666,000 for the first quarter would have been wiped out by a loss of £1,150,000 in the second quarter, followed by losses of £2,300,000, £3,370,000 and £2,200,000 in the succeeding quarterly periods. Taking the actual shipments for the contract period therefore the contract shows a gain to growers of £7,300,000 as against the quarterly sales alternatives. The 1947-48 contract with he United Kingdom Government was a good business deal despite the criticism to the contrary, by members of the Australian Country party in particular. Australia sold a huge quantity of wheat when the market was near its top. That was better than the alternative of selling a small part of it at a higher price and 75 per cent, of it when the world market was sliding down. In fact the world market has been sliding down for more than fifteen months and last Friday the Canadian price for export wheat was 2 dollars or approximately 12s. 2d. a bushel f.o.ib. in Australian currency. The Opposition has stated that the Government has done badly, but the wheatgrowers have gained more than £7,000,000 from the contract compared with the alternative put forward by the Australian Wheat Board. Our wheatgrowers will take a lot of convincing before they believe there is anything wrong with receiving an extra £7,000,000. I want to say quite definitely that I attach no blame to the board - and I speak of the old Australian Wheat Board - in respect of the proposition that it made to the United Kingdom in October, 1.947. After all, selling wheat is a matter of pitting judgment against possibilities.

Mr Turnbull - Against the Australian Wheat Board?

Mr POLLARD - I have illustrated, for the information of the honorable member for Wimmera (Mr. Turnbull), that when the Australian Wheat Board pitted its judgment against the possibilities of the future, that judgment, compared with the deal ultimately effected by the Government, was not half as good as the Government's judgment, and in fact would have cost the wheat-growers £7,000,000. [Extension of time granted.'] The accurate estimation of future trends of the world's wheat market? is as tricky as discerning the difference between kangaroos and wallabies. In order to demonstrate the hypocrisy of members of the Australian Country party in this chamber and their supporters outside when they complain of the exercise of ministerial authority in the conduct of the wheat industry, 1 shall quote some of the provisions of the legislation that was introduced by the Liberal-Country party Government of Western Australia within the last two years. That legislation was introduced because the Liberal-Country party, which is in office in that State and holds identical political views with the Australian Country party in this chamber, believed that the present Government might not be able to implement its wheat stabilization proposals and it wanted to have its own scheme ready. Section 27 of the Western Australia Wheat Acquisition Act provides -

With the consent of the Minister, the Board may make or arrange for advances on account of wheat delivered and any payment made on account of the wheat may be made at such time or times and on such terms and conditions and in such manner as the Board m»T think fit.

Section 37 provides -

The Minister may, with the consent of the Treasurer of the State, arrange with a trading bank or other financial institution for th» making by such bank or institution of advancer to the Board.

Section 17 states -

The Board may appoint any number of it* members to bc an Executive Committee and may delegate to that Committee such of its powers and functions as the Board, subject to any direction by the Minister, deter mines, .' . .

Paragraph, b of sub-section 4 of sec-tion 7 reads -

For the purposes of the provision of this Act relating to the election by growers of persons to be appointed to the Board, the expression " grower " means a person whose name is, with the approval of the Minister, included in the roll mentioned in the next succeeding section, . . .

That legislation imposes far more restrictions upon wheat-growers than Labour would ever have suggested, and it is clear that the anti-Labour parties have a firm and abiding belief in the power of governments to exercise control over the marketing of wheat. The anti-Labour Government of Western Australia was quite prepared to implement its restrictive legislation had the Australian Government not been able to introduce its plans for the stabilization of the industry.

I pointed out earlier that Mr. J". S. Teasdale. who was the chairman of the committee which made certain recommendations concerning the Western Australian wheat industry, recommended the adoption of even more restrictive control than that which he has since attacked. Paragraph 35 of that report states -

We have to realize that when the government promises a guaranteed price for wheat, it pledges the public credit by the same stroke of the pen and that being the case the guaranteed fund (unless entirely provided by growers on an equalization basis) must be limited in total amount either by the guaranteed price being low or the bushelage restricted. As a rule both these limitations come into the picture. And just because Governments come and go, Parliamentary sanction for a policy dependent upon annual budgetary appropriations cannot be guaranteed for a lengthy period.

I also draw attention to paragraph 37, which is as follows: -

Your Commissioners consider that a claim for a guaranteed price for wheat can only be sustained to the extent it applies to the amount normally consumed within Australia in the form, of flour and other processed food for human consumption. There is little justification for the extension of the guarantee of the crop which is exported, either as wheat or wheat products. In this sphere the grower must endeavour to produce at a price the overseas buyer is prepared to pay. Farmers should not lose sight of the fact that when Governments give any form of guarantee to cover other than for local consumption, restrictions of one kind or another go baud in hand with the guarantee.

I emphasize that those are the recommendations which Mr. J. S. Teasdale and his colleagues made to the Government of Western Australia. Every one concerned in the industry knows that this Government's stabilization plans are not nearly so restrictive as the proposals made by Mr. Teasdale and his colleagues.

In connexion with the exercise of the principle of [ministerial responsibility, I commend to the notice of the House the remarks made by the honorable member for Barker (Mr. Archie Cameron) on the 11th December, 1940, which are reported at page 754 of Volume 165 of Hansard. The honorable rn.em.beT stated -

One truth that honorable members should fix firmly in their minds is that the people who pay the piper will call the tune. If an industry is subject to grower-control, there must also be grower-responsibility. The financial responsibilities under this bill will be borne not "by- the wheat-growers, but by Australian taxpayers. While they continue to find the money, it is a pretty piece of impudence on the port of the representatives of the growers to contend that the farmers should direct the operation of the scheme. No honorable member opposite would administer his farm on the same principle.

Although the honorable member for Indi professed to speak for the Opposition, the speech made by the honorable member for Wakefield (Mr. McBride) was obviously a more valuable contribution to the debate. One wonders how much longer the Opposition parties and the country will tolerate the political meanderings of the honorable member for Indi. His attitude towards all such problems as that under discussion is influenced by a sense of frustration because of the fact that the governments of which he was a member or which he supported, neglected to make any effort to improve the lot of Australian wheatgrowers, although they had every opportunity to do something substantial for them. Those administrations inflicted a flour tax on the bread consumers of this country, left the wheatgrowers to the mercy of the speculators and dealers, and, in particularly bad years, handed out paltry subsidies of a few pence per bushel, which did not enable wheat-growers even to recover their costs of production. The honorable member for Indi said that a sum of approximately £17,000,000 was paid out to wheatgrowers by anti-Labour administrations of which he was a member or which he supported. I point out to the honorable member, however, that because of the miserably low prices which prevailed at that time the subsidies paid did not enable the growers even to recoup their costs. [ ask honorable members to contrast the alleged liberality of antiLabour administrations with the treatment extended by Labour to the wheats growers of this country in peace as well as during war-time. Labour has instituted a stabilization plan which ensures that the growers shall obtain for their wheat a price which is at least equal to the cost of production. Cost of production is determined by a competent body, whose recommendation is subject to endorsement by representatives of the Australian Agricultural Council and the Australian Wheat Growers Federation. That scheme has been applied to locally consumed wheat and an export quantity of 100,000,000 bushels. Cornsacks may be bought by wheat-growers on a costplushandling charge, which eliminates opportunities for the iniquitous speculation that was freely permitted before the war by anti-Labour administrations. The superphosphate subsidy which amounted to £14,000,000 to the end of 1947-48, is based on a payment at the present time of £2 15s. a ton in one State, and of £2 10s. in some of the other States. That is just double the amount that was paid under any anti-Labour administration. During the war this Government paid a jute subsidy amounting to £3,750,000 in order to help the farmers. It made a straight-out grant of £2,500,000 in drought relief for the seasons from 1944 to 1947. The farmers were given the money; it was not lent, as was the practice when antiLabour governments were in power. Finally, as its crowning achievement, this Government has brought down this International Wheat Agreement Bill. Let us compare the present situation with that which existed on the 29th November, 1940, as pictured by the right honorable member for Cowper (Sir Earle Page), when discussing a wheat stabilization plan then under consideration. This is what he said -

Arising out of this stabilization plan, J hope there may develop some voluntary debt adjustment between debtor and creditor in the wheat-growing industry, where advantage has not been taken of the provisions oi the Farmers' Debt Adjustment Act.

That legislation was intended to help the farmers settle their debts which had piled up through years of bad administration by anti-Labour governments. The right honorable gentleman continued -

Adverse conditions for many years have increased the debt obligations of a great number of wheat-farmers to such a degree as to place them in an impossible position. Now that there is some certainty of a reasonable annual return, many creditors will, no doubt, realize that it will be to their own interests, as well as that of their farmer debtors, to agree upon a plan of debt liquidation spread over future years. This will enable the debts to be paid and, at the same time, will give to the farmers a reasonable prospect of regaining their independence. If only this result were achieved I should consider that the stabilization plan had been justified.

But, of course, it never came into operation. No anti-Labour government ever implemented a stabilization plan, with a guaranteed price which would ensure the growers the cost of production, and the growers suffered in consequence. In the course of this debate, one honorable member opposite referred to the fact that Pakistan had offered to buy Australian wheat from the 1947-48 crop. Let us examine this alleged offer to buy 9,000,000 bushels of wheat at 16s. a bushel. [Further extension of time granted.] Pakistan applied to the International Emergency Food Council for a wheat allocation. In October, it was advised that off-grade wheat from Australia could be bought. Australia offered two cargoes of off-grade wheat, which Pakistan refused as unsuitable. Early in November, Pakistan applied to Australia for 9,000,000 bushels of wheat. At that time, no new season's wheat had been received. In December, two cargoes were sold for shipment in December and January. They were shipped late in February to Pakistan at a price determined by the Australian Wheat Board. Meanwhile, negotiations were taking place with the United Kingdom and India, our chief permanent markets. These negotiations precluded the supply to

Pakistan of the quantity wanted, as the sale would have prejudiced our supply to the markets on which we always depend. Pakistan normally supplies its own requirements in wheat, as well as exporting a surplus to India. Under the terms of the International Wheat Agreement, Pakistan is not listed as an importer country which can be expected to take wheat on a continuing basis. In the circumstances, we did not rush the sale of wheat to Pakistan, because we believed that it would be best for Australia to continue to sell wheat to Britain and India. On the loth December, 1948, Pakistan asked for 1,500,000 bushels for January and February shipment. This could not be supplied. On the 3rd February, Pakistan asked for approximately 1,500,000 bushels for February and March shipment. The board offered three cargoes for early shipment on the 17th February, 1949, but was advised that Pakistan had obtained 5,500,000 bushels elsewhere - perhaps from Russia or some of the Danubian countries. Is any honorable member opposite prepared to say that we should have supplied Pakistan with 9,000,000 bushels of wheat,, thereby depriving ourselves of an opportunity to sell wheat to Great Britain, which will probably be our sheet anchor in the years ahead? Honorable members opposite cannot resist the opportunity to say that the whole purpose of the Government's activities in connexion with the International Wheat Agreement and a guaranteed price is to use the growers' marketing organizations as a means to further its programme of socialism. I have enumerated the benefits which this Government has conferred on the wheatgrowers, and if they represent steps in the direction of socialism, I am sure that a great majority of the growers will say, '' Thank God for a Labour government. Thank God that it has taken another step along the road to socialism ".

The honorable member for Swan (Mr. Hamilton) has said that, under the agreement, there was grave danger that Australia might lose its trade in flour. No doubt he is fearful of competition from the United States of America and Canada. As a matter of fact, there is no more danger to our flour trade under the International Wheat Agreement than there is under existing trade arrangements. The factors that influence the Australian flour trade are too numerous to deal with at present. The main consideration, however, is that Canada and the United States of America, owing to their immense milling capacity and also to the high prices ruling for by-products including bran and pollard in those countries, can under-sell Australia on certain flour markets. If we are to compete satisfactorily with the United States of America and Canada on the flour markets of the world - particularly on Eastern markets that we have held for many years - we shall have to be prepared to sell our export quota under the International Wheat Agreement at the agreement price, and to meet outside competition on the open market with whatever surplus we have available for export.

The honorable member for Swan (Mr. Hamilton) wanted to know why Australia had not seized the opportunity given by the International Wheat Conference to secure from India a guarantee to supply to Australia a satisfactory quota quantity of cornsacks and jute. Surely that is a primitive approach to the problem which shows a complete lack of comprehension of the nature of the discussions. If every one of the exporting countries had adopted that attitude, and had sought to make private arrangements with the importing countries for the supply of say, jute, window glass, hemp, or twine, there would have been no possible hope of reaching an agreement. Action to break down world trade barriers and ensure a freer flow of goods can only be taken at conferences held for that specific purpose. For instance an attempt to reach that objective is being made at the International Trade Organization Conference, which started at Geneva, subsequently moved to Havana, and is being continued at Annecy.

I hope that honorable members have been impressed by the figures that I have given relating to the 1947-48 wheat crop. I repeat that, as the result of the Commonwealth's intervention there has been a saving of from £0,000,000 to £7,000,000 to Australian wheat-growers. I trust that that has been made clear to the honorable member for Indi, who has been so critical of the exercise by the Commonwealth of its right to intervene in the interests of the Australian wheat-growers on the one hand, and of the vast body of consumers on the other.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 5 agreed to.


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