Bert Kelly, “The problems of stabilisation schemes,” The Bulletin, December 13, 1983, p. 112.
Kicking the Industries Assistance Commission (IAC) in the teeth is becoming fashionable these days and for two reasons. First, the John Uhrig inquiry into the IAC has encouraged groups such as the Department of Industry and Commerce, with which we dealt last week, who have old scores to settle from battles long ago. Then we have the high protectionists who are always eager to clobber anyone who tries to stop them getting all their feet into the tariff trough.
However, I must admit that I was disappointed to hear the cries of anguish from the wheatgrower organisations when the IAC’s report on wheat was made public. But I was not surprised because long and sometimes bitter experience has taught me that wheatgrower organisations tend to regard any criticisms of their policies with deep resentment. They seem to think of these as being cut in tablets of stone and handed down from Mount Sinai. Let me give an example.
Long ago, back in the early 60s, when I had been in parliament only a short time, the Australian Wheatgrowers’ Federation (AWF) was pressing the then government for an increase in the amount of wheat covered by the guaranteed price.
I attended the AWF meeting in my electorate and heard Tommy Stott, the competent and pugnacious secretary of the AWF, tell the growers when he was fighting for and then I heard him say threateningly, “I understand that there is one Federal MP who is not supporting us in this fight. I cannot find out who it is but, if I do, I will have his guts for garters.”
When he sat down, everyone glared suspiciously at me. So I took a deep breath and my poor little political courage in my hand, made sure that the door into the supper room was open and then said in a trembling voice that I was the villain. Then I told them that, if they got what they wanted, they would blanket the market signals from their farmers and before long there would be so much more wheat grown that wheat quotas would be needed to stop people growing wheat.
This display of political ineptitude was received with dire threats about withdrawal of endorsement and I was told that I was now an MP and must cease having a mind of my own and must do what my wheatgrowers wanted, even if I knew they were wrong. But I was right, and wheat quotes followed a year or so later.
I would like to be able to claim that I have always been as wise and brave as I was on that occasion. But I did not try often or hard enough to head off my farmers when I thought they were wrong. So I went along with the wheat stabilisation scheme that discouraged me from growing wheat when the world was hungry for it and encouraged me to grow it when the demand for it was falling. This is what always happens with stabilisation schemes. And I went along with a home consumption price for wheat that has resulted in Australian growers subsidising the Australian consumers of wheat by many millions of dollars over the years. I have let slip through without fighting as I should these and many other demands of wheatgrower organisations. People are justified in saying that this was political cowardice.
You can understand then when I say that I was not surprised at the critical reaction of the AWF and the Australian Wheat Board (AWB) to the IAC’s report on wheat. I thought it was an excellent report. I admit that I am doubtful about the recommendations against the AWB operating on the futures market and the opposition to the establishment of money reserves.
Both these recommendations seem to me to be a bit too much like back-seat driving. It is no good telling the AWB to behave like a lean commercial organisation and then expecting it to wear commercial hobbles. However, I found myself in general agreement with its main recommendations, particularly the one encouraging competition in the domestic market which should enable many economies to be made, many corners to be cut.
I am becoming increasingly respectful of the way the AWB is now operated and I know that an organisation as competent as it now is could compete very effectively with others in the domestic market.
I do not think it needs to be sheltered from the chill wind of competition as perhaps it did when it could not even get its annual reports out till about eighteen months after they were due.
In short, I thought the IAC’s report on wheat was a credit to it and I don’t care who hears me say so. And I wish wheatgrower organisations would cease seeing themselves as the repository of all wisdom.
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