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
Thursday, 18 October 1956

Mr DUTHIE (Wilmot) . - Although apparently the Government would like the measure to go through without comment, even from its own members, I wish to take this opportunity to state that the Opposition supports the new International Wheat Agreement.

Mr Lawrence - The honorable member should not be too sure that Government supporters will not speak.

Mr DUTHIE - PerhapsI should not be.

Mr Lawrence - The only thing the honorable member knows much about is apples.

Mr DUTHIE - The honorable member cannot say what I know about wheat. My father was a wheat-grower in Victoria for 30 years. I was born on a wheat farm and worked on a farm for years. The new agreement is for a term of three years, from 1st August, 1956, to 31st July, 1959. This is the third post-war agreement. The Labour government, under the guidance of the honorable member for Lalor (Mr. Pollard), brought the original agreement into being in 1949. The present Government parties, which were then in opposition, severely criticized that agreement. It is remarkable how the views of the present Government parties change according to the side of the chamber on which they sit. Now they are bringing in this agreement in a blaze of glory. They are giving their blessing to it, and rightly so. But when the original agreement was proposed most of them were opposed to it. We are very glad indeed that the Government has seen fit to have this agreement ratified by the Australian Parliament. We fall into line, by doing this, with many other exporting countries, the largest and most important of which are the Argentine, Canada and the United States of America.

The principles in this agreement are identical with the principles involved in the previous agreement which was ratified during 1953. However, there are one or two changes in the new agreement to which I wish to refer. The great principle behind the International Wheat Agreement is to try to get some stability in international price levels for the exporting countries and some kind of stability in prices for the importing countries. I believe that it is one of the greatest feats that have been achieved in international arrangements. Forty-four importing countries and four, five or six exporting countries are involved in this agreement. That one can get any sort of agreement between people who export wheat and people who import it is, in itself, a remarkable thing. Those who thrashed out this matter at the United Nations wheat conferences which were held during October and November, 1955, and again from February to April, 1956, are to be congratulated on the fact that they could get some kind of order out of a situation that has nearly always been chaotic. I refer to the international wheat set-up. The main principle, then, can be stated in the words of article 1 of the agreement as follows: -

To assure supplies of wheat to importing countries and markets for wheat to exporting countries -at equitable and stable prices.

The working out of that principle is not easy at all. A great deal of detail is attached to it. A formula had to be worked out and put into operation. All these things are most difficult, and I feel that we owe a great debt to the men who represented Australia at these conferences. We all realize what a chaotic situation the wheat industry was in before the introduction of the agreement, and particularly up to the beginning of the war years. As I was engaged in the wheat industry with my father for many of the pre-war years, I can speak with some feeling about the chaotic conditions of the wheat industry then. Prices fluctuated disastrously. In one year we got ls. 6d. a bushel for our wheat. The next year we got 2s. 9d. The next year, the price might have gone up to 3s. 6d. at the beginning of the season and dropped to 2s. 6d. by the end of the season.

As wheat-farmers, we were absolutely and entirely in the hands of merchants, agents, bankers and others. Upon our farms would descend like a plague of locusts the wheat agents, all representing different merchants, and one might offer a farthing a bushel more one day than another. The poor wheat-farmer had to work out in his own mind whether he would accept the price that he was offered one day, or whether It might be lower or higher the next day. No industry was a greater gamble than was the wheat industry in those years. During the depression, in four years, 20,000 wheatgrowers were forced off their farms in this country because of the chaotic nature of the industry. Due to the failure to achieve any degree of price stabilization, these farmers left their farms. It was a tragedy, and it dawned on Australia, and on other nations that unless stability could be brought to this industry, the future would be very dark indeed for people who were connected with wheat-growing.

So the principle of the international wheat agreement is designed to bring stability and orderliness to wheat marketing. The violent manner in which prices fluctuated before the existence of the wheat agreement are known to all, particularly to the wheat-growers of this country. A system of maximum and minimum prices has now been worked out. 1 shall leave that to my colleague, the honorable member for Lalor (Mr. Pollard) to mention in more detail. I want to speak about this matter in more general than detailed terms. This is the interesting point: The agreement has worked. In spite of the jeremiahs who said that it could not work, it has worked. When the Minister for Primary Industry (Mr. McMahon) introduced the bill he made this statement -

The experience of the past seven years demonstrates that these arrangements work satisfactorily in practice-

He was referring to the minimum and maximum price system - and go a long way towards providing a reasonable degree of stability in the international wheat trade.

The agreement now before the House differs in two important points from the 1953 agreement. The first point concerns the basic maximum and minimum prices which, in the new agreement, are 2 dollars and 1 dollar 50 cents respectively; or, in Austalian currency, approximately 18s. and 12s. 6d. Those prices were fixed after the conference of the United Nations Wheat Committee was held last February as a result of a general lowering of wheat prices throughout the world. The fall in prices was not catastrophic but the new prices were sufficiently lower than the old ones to force the maximum and minimum prices down to the amounts that I have mentioned. Those prices are 5 cents a bushel lower than the prices specified in the 1953 agreement. I am sure that that will not, in total, affect the working of this agreement very much. The new agreement includes the same formula as that which the 1953 International Wheat Agreement included for the purpose of determining the equivalent maximum and minimum prices for wheat shipped from exporting countries. This formula, interestingly enough, takes into account the differences in transportation costs, relative quantities of various types of wheat, and different currencies.

The second point on which this agreement differs from the 1953 agreement is in respect of membership and guaranteed quantities. In the 1953 agreement, 44 importing countries participated, and the volume of wheat covered by that agreement amounted to 395,000,000 bushels. In the new agreement 44 importing countries submitted their figures for inclusion but, in many cases, the quotas for which they were willing to subscribe were substantially less than their commitments under the 1953 agreement. As a consequence of this, the total quantity covered by the importers' side of the agreement has been reduced by almost a quarter, that is, from a total of 395,000,000 bushels to 303,000,000 bushels. These reductions in the quantity of wheat that the importing countries wish to import indicate two main trends. First, they reflect the growing dependence on domestic production, often stimulated by high support prices in importing countries. Secondly, it indicates the expectation by the importers of securing wheat outside the agreement, under one or other of the United States programmes for the disposal of accumulated American wheat stocks.

I.   wish to pause there to make a comment about the effect of America's policy of dumping its surplus wheat. This matter was taken up by the Minister for Trade (Mr. McEwen) when he was overseas recently. Here we see another effect of the dumping by one nation of its surplus food products on the other nations of the world, because this practice is already influencing the volume of wheat that the importing countries wish to take from their normal sources in the next twelve months. We can only look with great concern at this American policy.

We realize that the population of the world is increasing at a tremendous rate, and that food production must be increased accordingly, but when one country decides to put its surplus products on the world's markets without due regard to the repercussions on other exporting countries, we are starting to head for trouble.

I might mention, further, that, on the exporting side, the new agreement differs in another important respect from its predecessors. In the first two International Wheat Agreements, the main exporting member countries were the United States, Canada and Australia, whilst France, although a member, had a nominal quota only; but in the last three years Argentina and Sweden have come into the picture as exporters. They have joined the International Wheat Agreement as exporting countries, and France, which before had only a nominal quota, has emerged as a substantial exporter in normal seasons and has a very significant quota to export on this occasion. That is a very interesting and disturbing trend. Again, we see the competition that is developing throughout the world in respect of markets for primary products. Australia, as one of the great food exporting countries, is jammed, as it were, between the devil and the deep blue sea on this issue. We cannot prevent other nations from growing food. Even Japan is now growing wheat in quantity. 1 was in that country last year on a mission and 1 saw glorious crops of wheat, about 6 to 9 inches high at that stage, growing on farms, the average size of which is 2 acres. Japan is also growing barley. When I was in Scotland as a member of a parliamentary delegation four years ago, I saw, on the outskirts of Edinburgh, one of the best crops of wheat I have ever seen in my life.

Mr Leslie - Biscuit wheat?

Mr DUTHIE - The trouble with the honorable member for Moore is that he thinks he knows everything about everything. He thinks he is the only wheatgrower in this House, but there again he is wrong.

Mr Whitlam - He has long ears.

Mr DUTHIE - Before I was interrupted 1 was trying to point out that wheat was being grown to-day in the most unlikely places.

Mr Brimblecombe - What sort of wheat?

Mr DUTHIE - Good marketable wheat. Argentina and Sweden have now entered the field as exporting nations in competition with Australia, which will mean that the quality of our wheat must be raised if we are to compete with those countries. The emergence of these countries as exporters means that two changes have taken place on the exporting side. One is the reduction in the total quantity sought by the importing countries, and the other is the participation of France, Argentina and Sweden as exporters, which will mean a reduction in the quotas for Australia, Canada and the United States. In our case these changes have meant that our quota has been reduced from 45,000,000 bushels in 1953 to 30,000,000 bushels in the new agreement. That represents a very great percentage reduction for Australia, and will have a very definite effect on our new season's crop.

The volume of wheat produced in Australia each year is between 170,000,000 bushels and 200,000,000 bushels, lt is estimated that the coming crop will yield between 170,000,000 and 180,000,000 bushels. As we will export, under this agreement, only 30,000,000 bushels, we shall have to find other markets for at least 140,000,000 bushels. The difficulty there is that we already have millions of bushels of wheat in storage and unsold from previous crops.

Mr- Brimblecombe.- Where?

Suggest corrections