Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Tuesday, 21 June 1949

Mr POLLARD (Ballarat) (Minister for Commerce and Agriculture) . - The honorable member for Wimmera (Mr. Turnbull) has made several pertinent points. First, he inquired about the position of China. I emphasize that the signing of the agreement does not commit a government to its implementation, because it cannot be implemented until it has been ratified by the parliament or government of each country that is a party to it. At the time when the agreement was signed China was under a government entirely different from that under which it is now operating. It may well be that the new government in China will not be prepared to ratify the agreement. Perhaps the old government would not have ratified it. However, on the assumption that the new government will require wheat just as urgently as, and probably more urgently than, the old government would have done because of the disturbed areas which the new government appears likely to control, there is a great possibility that the new government will accept the obligation of the old government and sign the agreement to purchase 6,000,000 bushels of Australian wheat.

Mr Turnbull - Is it not 7,000,000 bushels of wheat?

Mr POLLARD - The total is approximately 7,000,000 bushels of wheat. If the new government in China does not ratify the agreement, there are provisions, as the honorable member knows, for the appointment of that quantity among the signatories to the agreement. [ hope, and I expect, that the new government of China will take the allocation of approximately 7,000,000 bushels.

Mr Turnbull - ls it not possible that the new government of China, being a Communist regime, will obtain its wheat from Russia?

Mr POLLARD - The honorable member has asked a most pertinent question. The wheat-growing areas of the Union of Soviet Socialist Republics are located in the Ukraine, which broadly speaking, lie between the Black Sea and the Baltic Sea, thousands of miles from China. For a number of years, the Australian Government has had inquiries from Russia, despite reasonably good crops in that country, relative to supplying wheat to Vladivostock. The explanation is that because of the shorter distance by sea, it would pay Russia to buy wheat from Australia rather than haul vast quantities of grain across Siberia. The possibility of Russia supplying wheat to China is exceedingly remote.

Mr Dedman - It was a silly question, really.

Mr POLLARD - I should not say that it was a silly question. The honorable member for Wimmera was seeking information, and, in doing so, asked a most pertinent question. Some little time ago, we had an inquiry from the Communist regime in China to ascertain whether we would be prepared to supply wheat to that country. Under existing conditions, we are committed to sell nearly all this year's wheat to the United Kingdom and India.

Mr Haylen - Did the Chinese Communists suggest a barter plan?

Mr POLLARD - A barter plan was suggested, indicating that the people of China, under the new regime, will be in an exceedingly difficult situation in regard to supplies of wheat. Because of geographical considerations, they are not likely to obtain supplies of grain from Russia.

The honorable member for Wimmera has also asked a question about the voting strengths of the respective parties to the agreement. It is true that Australia's voting strength in regard to the apportionment of votes on a bushel supply basis is not so strong as are the joint votes of Canada and the United States of America. The council will consist of the three exporter nations, and approximately 36 importer nations, depending on the number that ratify the agreement. It will be in the interests of Canada and the United States of America not to do anything that would injure the interests of any other exporter nation that is a party to the agreement. There will be flexibility in the working of the council, and it can be accepted that a harmonious relationship will be established between the parties. If harmonious relations are not established between them, there is a possibility that the whole arrangement will break down. However, that possibility is exceedingly remote, because I consider the harmonious relation between Canada, Australia and the United States of America are unbreakable.

The honorable member has referred to the possibility of some countries evolving a scheme under which all the wheat may be bought at the minimum price. All that will happen under this agreement is that a maximum and minimum price will be set for the sale of wheat by exporting countries to importing countries. There will be a wide range of trading at values between the maximum and minimum prices, and at the maximum and minimum prices. The volume of trading that will take place from time to time, and the exact date of those transactions will be almost precisely the same as the trading that takes place between the buyers and sellers .of wheat to-day, and will depend largely on the. world supply situation. When wheat is scarce, the tendency will be for importer nations with obligations to snatch up their wheat as quickly as they can and at as favorable a price as they can get. But the selling countries will hold out to get the maximum or as near to the actual maximum price as they can.

Mr Archie Cameron - In other words, when wheat is plentiful it will be cheap, and when wheat is scarce, it will be dear.

Mr POLLARD - Exactly.

Mr Archie Cameron - The Minister and I are in agreement again.

Mr POLLARD - -Exactly. When wheat is most plentiful, the importing countries, as honorable parties to the agreement, cannot escape their obligations to buy a specific quantity of wheat at not less than the minimum price. I have mentioned that when wheat becomes scarce there will be a rush to make purchases at values between the maximum and minimum prices. In most instances, the sellers will seek to obtain the maximum price. When wheat is extremely plentiful, there will be some hesitancy, but sellers will desire to get in out of the wet as quickly as they can, just as they do now, and they will try to persuade the importing nations which have obligations under this agree ment to buy the wheat at a minimum price, or above it. The sellers will make the best bargain that they can. The bargaining position will be very little different from what it is now. The world's wheat trade will go on as hitherto, but a protective security will be given under the terms of the agreement. Although the agreement has not yet been ratified, Australia has received several requests to quote prices for wheat in the first twelve months of the operation of the agreement. In due course, when the agreement has been ratified, those inquiries will be referred to the Australian Wheat Board, and that body will quote the price that it considers it can extract from the prospective buyer which has an obligation to purchase from an exporter a specific quantity of wheat. That price may be the maximum, the minimum or a value between the two. I do not think I can elaborate that particular matter.

Schedule agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill - by leave - read a third time.

Suggest corrections