THE WHEAT EMBARGO.

Auckland Star, Volume 55, Issue 12, 15 January 1924, Page 8

THE WHEAT EMBARGO.

SUBSTITUTE FOR SUBSIDY. GOVERNMENT ACTION CRITICISED. (By a Special Correspondent.) WEIXJNGTON, Monday. Probably both the Prime Minister and the Minister of Agriculture will claim to have kept their words in regard to : the wheat subsidy. Literally they have ; done so; actually they have not. Mr. Massey. in announcing the economies he bad effected in the public expenditure, took credit for a very large sum he had saved by discontinuing the subsidy. Mr. Xosworthy less than three months ago, declared that rather than revive t c subsidy he would remove the embargo upon the importation of wheat. His sympathy was with the farmers, but they could not be allowed to lean indefinitely upon the taxpayers. A simple public took these statements to mean that in future the farmers would receive no more assistance than they were afforded by a high protective duty ail- the cost of sea carriage. But now the Minister of Agriculture, presumably with the concurrence of the absent Prime Minister, announces that "in conformity with the current year's arrangements,* an agreement has been arrived at between millers and farmers under which milling wheat of the coming harvest will be bought by rail..., at one penny per bushel advance on last season's prices." There is to be no advance in the prices of flour and bread, but the millers are to be allowed to reimburse themselves for this piece of forbearance by rearranging the prices of bran anel pollard. Letter and Spirit. What has happened, of course, is that the Minisiters, while observing the letter of their promises to the public, have managed to entirely evade their spirit. They have not subsidised the farmers and the millers out of the Consolidated Fund, but, in order that the farmers may receive something like 1/ a bushel over the parity price, and that the millers may continue to flourish exceedingly, they have imposetl a tax upon the people's bread, which will be much heavier and much more inequitable than a subsidy would have been. It is by keeping the price of bread at an exorbitant figure that the Government is able to satisfy the clamant demands of the farmers and millers, and. as bread inevitably constitutes a large proportion of the dietary of the poorer class of tho cdtemunity than it does of the rich, the substitution of indirect taxation for the wheat subsidy is obviously a reversal of the bencficient doctrine expressed in the term "equality of sacrifice." Whether it is desirable or not to keep on taxing the people in this supplementary fashion for the encouragement of wheal growing is a question capable of argument, but, assuming it is, then clearly there arc other industries entitled to the same special consideration. What It Means. The "Post" states the position judi-_ cially in its leading columns. "The action of the Government in shutting out wheat and flour while they are at a shade above pre-war rates in the world's markets and supporting a price for New Zealand-grown wheat fully 25 per cent above those prices may have been arguable in time of war," it says, "but it is difficult to explain to-day. Latest Australian quotations for wheat in Australia, received yesterday, are 4/0 per bushel Sydney, 4/3 and 4/3 A Port Adelaide, and 4/5* Melbourne. Business in flour is being done in Sydney at £10 per ton for shipment to the Far East and United Kingdom. In New Zealand the price of flour is £15 10/, with the result that bread is 1/ over the counter here, as compared with 8d in England and 9d in Australia. Roughly, the New Zealand wheat-grower demands 1/ per bushel more than his wheat is worth in the world's market, and to ensure him getting it the Government prohibits imports." The "Post" recalls on second thoughts that to this arbitrary arrangement is added the anomaly that two or three million bushels of wheat will have to be imported to save the Dominion from a bread famine. " Preference." The fact of the matter is Mr. Massey is so obsessed by the notion of '"preference" he cannot see the futility of attempting to force production and trade into unnatural channels by regulations and Orders-in-Council. The farmers of the Dominion declare they cannot grow wheat at the parity of the world's prices- They must be subsidised, they say, or they must go out of the business. The Government has been subsidising them in one form or another, for six or seven years, and still they are not supplying the amount of wheat the country requires. If the subsidy were withdrawn, and if, as a consequence, the farmers gave up wheat growing, the public, it seems, would be better off by the amount of the subsidy. But Mr. Massey, in his obsession, honestly believes that if New Zealand did not produce year by year its own breadstuff's, its very existence as an independent community would be imperilled. His fear so far as other sane men can sec is utterly groundless. Australia and Canada are the natural wheatfields of the Empire, and what breadstuff's New Zealand would not grow for itself they gladly would supply.