Dumping of German Wheat.

Part of the debate – in the House of Commons on 30th October 1929.

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Photo of Mr Milner Gray Mr Milner Gray , Mid Bedfordshire

I should like to crave the indulgence of the House in addressing it for the first time. Perhaps I need that indulgence rather more because I am intervening almost at the close of the Debate, when nearly all the ground that can be covered has been covered. What has impressed me more than anything else in this House is the great kindness and consideration which the House shows to a Member who is speaking for the first time. Just as the dog is allowed one bite, so this House allows a Member one bark. This subject is of tremendous importance. It deals with an industry which is the primary industry in this country and in other countries. In this country in particular that industry is labouring under very great difficulties, and in all quarters of the House there is an intense desire to adopt some practical method of helping the farmer. It is well to realise what is the nature of the policy that has created this particular difficulty. The difficulty arises essentially out of the German policy for the protection of grain and wheat. Their policy in Germany is to provide protection for their agrarian interests by an import duty. They allow a licence or drawback on the export of wheat, and they not only allow a drawback on the export of imported wheat but they allow the same drawback on the export of German wheat.

Before we consider our own particular problem I would ask the House to realize what happens as a result of that particular policy in Germany. It does certainly give a great advantage to the German farmer. He is able under that protective policy to secure a higher price for his product in his own home market. Because he secures a drawback, bounty or subsidy from the German Government when he exports his wheat, it makes no difference to the German consumer whether Germany has a bountiful harvest or not, for if they have a bountiful harvest the farmers can unload their wheat abroad even below the world's price, yet by virtue of the bounty they are receiving from the German Government they are able to get an adequate return on their product as a whole. What is the effect upon Germany itself This policy really means that the community in Germany has to live at a lower standard of life or pay higher prices than it ought to pay under world prices for the grain it consumes. Incidentally, that policy creates a great difficulty for us in this country by virtue of the exported wheat coming to this country at prices which, admittedly, are not fair to the producer of grain in this country. I do not think that that kind of German policy is one that any other country ought to be induced to follow. The more we can induce the countries of Europe to follow the policy outlined in the Convention of Geneva, the better for all parties concerned.

Coming to the effect of this policy upon our own agricultural interests, as has been pointed out, the amount of wheat so imported constitutes a very small proportion of the total amount of wheat coming into this country. If we were dealing with the price of the loaf or the price of flour, the amount of German wheat so imported would make no practical difference, but there is all the difference in the world between dealing with broad generalities and prices and the effect of a small amount of imported wheat on the price level throughout the country, and the fact that individual farmers have to face in particular districts the competition of this German wheat, with the result that by virtue of this peculiar competition, whatever may be happening in other parts of the country, they are being forced to sell their product at what is, admittedly, an un-remunerative price. I am a member of a party which, according to the statement of one hon. Member, believes in the musty shibboleths of Free Trade. I have seen no reason for giving up that belief. Certainly, I have no idea of absorbing the mustier shibboleths of Protection.

The less interference there is with the movement of commodities, the better. A larger amount of prosperity comes to all classes in the community the freer you have interchange of the specialised commodities that each section of the community may produce. Free Trader though I am, I do not think that under a Free Trade policy we are compelled to sit down under a system of bounties which are producing a localised and specific effect. We ought to be prepared to adopt some practical method of dealing with the problem. We are all agreed on that point, but immense trouble arises when we begin to consider what kind of practical policy ought to be adopted. The first and only method that would occur to one would be that we ought to impose a countervailing duty equal to the bounty that the German Government gives, which would mean, in effect, that the German Government would be making a contribution to the revenues of this country, and the particular type of commodity affected would be put on a level with others. If that policy could be effectively and simply carried out, and localised to its peculiar circumstances—the circumstances of a bounty being given by a Government directly on an exported product—I should not consider that I had violated my general principles of Free Trade or that I was doing anything that would make a loophole for the introduction of Protective duties.

Another method would be to prohibit entirely the importation of that wheat under the present conditions. There, we should have a still greater difficulty to face. I am not sure that we might not almost meet the difficulty if we adopted some measure to prohibit the importation of this particular wheat during certain months of the year when the effect is most materially felt by the fanners concerned. The hon. Member for East Leicester (Mr. Wise), in an able speech, suggested the stabilising of prices through a wheat pool. That is a very attractive suggestion in many ways, but we must be exceedingly careful how we embark upon a policy of that kind. I am satisfied that we could not have a wheat pool successfully controlled without the district danger of two great risks, one, the risk of a rise in price in the market owing to the pool, and the other the possibility of being faced with a shortage of supply.

There is another difficulty in regard to a wheat pool for the stabilisation of prices. When we speak of the stabilisation of prices, we must realise that prices never are stabilised, and no one wants them to be stabilised. Prices are constantly moving up and down. There are certain tendencies which cause a great rise in prices. We had that experience during the years of the War, when the level of prices rose to 100 per cent. and more above the level of prices which had existed before. The level of prices has been constantly dropping since the War. To-day, no one can say what may be the level of prices. You cannot, therefore, really stabilise prices; if you did so, it would have to be for a very short time. The difficulty about stabilising prices for agricultural products in this country is that there would emerge a conflict between the agrarian interests and the industrial interests. The industrialist wants lower food prices whereas the agriculturist wants high food prices.

I should view with grave suspicion the conflict of interest that would arise in this country under those circumstances. If we had a Government department fixing the price for agricultural products, the industrialist would ask for a reasonably low price, from his point of view, and the agriculturist would ask for a reasonably high price, as he would see it. You might find under these conditions a very grave conflict of interest arising between the agriculturists and the industrialists which might have very grave reactions in the country. I do not blame the Minister of Agriculture that he did not necessarily commit himself to the stabilisation of prices in dealing with this great agricultural problem.

There are some simple and effective methods which might be carried out. We might make representations. Why should not the Foreign Office make representations to the German Government as to the effect of their particular method upon our own agricultural problem? I do not see that such representation would do any harm, although it might not do a great deal of good. We might endeavour to press strongly the policy of freedom of trade throughout Europe. There is a possibility that that policy may emerge before long, and become a practical policy in politics. Another thing that we could do, and it is most urgent if we are to deal with this problem, is that we should get together a small conference of the three parties. I urge that for this reason, that at the present time, with no party having an overwhelming majority and being able to enforce its will, reasonable or un-reasonable, by the mere weight of its majority, upon the House, we must carry on the legislation of the country, more or less, by mutual consent.

In regard to agriculture, every party in the House, as well as a great number of hon. Members who do not represent agricultural constituencies, are agreed that something practical should be done. I represent an agricultural division, although all my individual experience has been in industry. My friends in Bedfordshire placed me on the agricultural committee of the county council on the assumption that knowing nothing about it I could not do any harm. I suggest that we should get a small conference together of representative men of the three parties, who could quietly sit down to consider the problem, not to get party advantage, not to make capital for any party, but with the deliberate and determined intention to find out what practical methods can be adopted, without violating the prejudices or principles of any party, in order to give to the agriculturist in this country, who is fighting a very hard fight, under very great difficulties, a little larger promise that the interest and experience of this House will be used to help him in the difficulties that he has to face.