Wheat Meet

Wheat Meet (See front cover)

Fortunately for the British Isles they are small and populous enough to eat all the wheat they can grow, and much more. They have no "wheat problem." They were not represented at the Wheat Conference of Eleven Exporting Countries which met in London last week. These countries, their wheat production and their wheat exports in millions of bushels for 1930 were:

Production

Russia 1,032 U.S.A. 851 Canada 398 India 387 Argentina 239 "Little Five" 334* Australia 203

Totals 3,446

Exports

Canada 186 Argentina 151 U.S.A. 140 Australia 63 Russia 93 India 3

Totals 636 The Conference met in a cloud of gloom. Sessions were "secret," punctuated by leaks. Quarreling began on the first day and continued until the last. Nothing was accomplished except to make "personal contacts" and set up a permanent statistical bureau to gather data on wheat, already plentiful. The Conference disbanded, died an utter failure.

The problems it failed to solve, long baffling to best minds, are as follows:

Problem No. 1: Price. Broadly speaking the "wheat problem" is the present impossibility, faced by exporting countries, of selling all their wheat at a profitable price.

At a sufficiently cut price anything can be sold. Famine-stricken China, too poor to buy $1 wheat, 50-c- wheat, or even 25-c- wheat, would gladly eat up the whole world surplus if offered 10-c- wheat or 5-c- wheat. As Samuel Roy McKelvie, wheat member of the U. S. Federal Farm Board, onetime (1919-23) Governor of Nebraska, chief U. S. delegate to the London Wheat Conference said last week:

"The demand for wheat for food in most countries is comparatively inelastic. In order to tap extensively the strata of elastic demand--for food in China, for example, for feed in many countries, and for industrial uses--prices cruelly low to wheat producers are necessary. Temporarily this may be inevitable. ..."

Appalled by the sheer cruelty which would be necessary to market the 1931 world wheat surplus now, the U. S. and Canadian Governments are trying by pool operations to support the world price of wheat, and with some success, though at great cost. This action, this holding back, has made it easier for nations which are not holding back to jump in and sell their wheat. They are selling cheap, but not so cheap as they would have to sell if the U. S. and Canada were not holding back. Picturesquely last week Sam McKelvie barked (for the special benefit of Isidore Lubimov, the Soviet chief delegate): "We are not going to hold the umbrella for other countries forever!"

More explicitly Mr. McKelvie said: "It would not be fair to the members of this Conference, or to the world at large, to leave the misapprehension that the United States is out of the export market. Many wish that we were, but we emphatically are not!"

Comrade Isidore Lubimov and heads of most other delegations understood Nebraska's McKelvie to mean by this that the U. S. and "her trusty vassal Canada" (as the Moscow Izvestia put it) are about to start dumping--"and how!" (a phrase popularized abroad by U. S. talkies). The European impulse was to call Mr. McKelvie a hypocrite when he said that under Federal Farm Board aegis the 275 million surplus bushels of U. S. wheat "will be sold, but they will be merchandised in orderly fashion; they will not be thrown overboard for anything they will bring, to demoralize domestic and foreign markets."

To Russia, who is accused of "dumping" because she disposed of 90 millions of bushels in 1930 at a price low enough to find buyers, the "orderly marketing" of 275 millions of bushels sounds like a U. S. euphemism for what would be called dumping if any other nation did it.

Price, then, is the first baffling element in the wheat problem: How can one sell at all without selling cheap? How can one sell cheap without dumping? How can one dump without cruelty?

Sam McKelvie, who racked his brains over these questions last week, is the latest man drafted by President Hoover to complete his Federal Farm Board (TIME, Aug. 12, 1929). No wheat-grower, Mr. McKelvie publishes the Nebraska Farmer. Grumblers call him a "political farmer." Aged 50, staunchly conservative, Publisher McKelvie opposes the equalization fee, opposes debenture, urges the farmer to help himself.

Problem No. 2: Acreage. Apart from stating the U. S. Farm Board's orderly intentions, Chief Delegate McKelvie's contribution to the Conference last week was an appeal for reduction of acreage, "voluntary reduction," in all wheat exporting countries.

The other delegates knew that Sam McKelvie and fellow Farm Boarders have made this same appeal up and down the U. S. wheat belt for two years to U. S. farmers. To carry an appeal to the world when it has already fallen on deaf ears in the U. S. seemed to many delegates twice hypocritical. That Canada is not the "trusty vassal" of the U. S. appeared when Canada's George Howard Ferguson, High Commissioner of the Dominion in London and Chairman of the Wheat Conference last week, said cuttingly of the U. S. Chief Delegate's speech: "It was prepared before Mr. McKelvie came to London and perhaps without any definite relation to this Conference."

For the Soviet Union, Chief Delegate Isidore Lubimov stated that Russia is committed to the Five-Year Plan, that the plan lays down a progressively larger wheat acreage each year, that Russia cannot therefore reduce her acreage, and finally that she fears no Capitalist wheat nation's competition. Reason: She is convinced that her Communist wheat farms can grow wheat cheaper than it can be grown elsewhere. Therefore she can meet and beat all wheat competition--unless the Five-Year Plan breaks down.

On the moral side, Russia's Lubimov pointed out that Tsarist Russia exported nearly twice as much wheat as her nearest competitor, and that no one called this morally wrong. Today Soviet Russia cannot by the wildest excess of dumping export as much wheat as her largest competitor, which, of course, is Canada.* Therefore, in Moscow's view, whatever Soviet Russia does or can do in the way of wheat exportation, she will be not less, but more generous to her competitors than Tsarist Russia was.

The anti-Soviet answer to this is: "Times have changed." While Russia was out of export wheat production during the War and her revolution, the U. S., Canada, Australia and Argentina greatly increased their acreage "spurred by high prices, patriotic appeals, or both" as Sam McKelvie put it last week. Having increased their acreage these nations now have "a vested interest" of which only cruelty could deprive them and cruelty would be wrong.

Problem No. 3: Distribution. Poland's Chief Delegate Adam Rose proposed that an International Wheat Quota Board be set up with power to impose an agreed limit on the monthly exports of each wheat exporting nation. Such rigid control has become increasingly popular in Europe, where "steel cartels" and such are common. Lawyer Thomas Lincoln Chadbourne of New York has persuaded the world's sugar growers to adopt such a plan, though similar plans failed in the rubber, coffee, tin and several other industries. The U. S. farmer through his representatives in Congress would probably reject working under quota rule and in London last week Mr. McKelvie, knowing this, said "No."

The Soviet Delegation in a somewhat devious statement accepted part of the Polish plan, and all delegations except the U. S. favored a quota system of some sort. Uncle Sam alone said "No," thus courting extreme unpopularity.

Argentina, which exceeds the U. S. in wheat exports, played the shrewdest hand at London last week, her delegation keeping mouse quiet. No mouseman, Sam McKelvie is the man who told the world Calvin Coolidge's recipe for home-made wheat porridge./- He knows that advertising, oratory, exhortation are potent weapons. As the Wheat Conference died last week he wished the Russians lumps in their porridge but to correspondents he constructively said:

"Nothing has been done here to prevent Russia's dumping if she sees fit, and she has not been asked to change her methods, for Russia has the same right we have to sell her wheat wherever, whenever and for whatever price she sees fit. But eventually she will discover it is unprofitable for herself."

Chief Delegate McKelvie even managed to say that the conference "accepted in principle the American suggestion that there should be a reduction in acreage." Acceptance-in-principle is a useful phrase. The Conference did adopt a sop resolution in which it stated the obvious fact that reduction in acreage would ease the world wheat situation, but no chief delegate, except Sam McKelvie, even promised to exhort farmers to "voluntarily reduce."

As the Conference failed, wheat men were conscious that the world's wheat elevators are bulging with last year's surplus and that out of the earth was already springing another monster crop, another incubus. Too discouraged to tear their hair, Chicago wheat pit traders estimated quietly last week that North America will close 1931 with a surplus of one billion bushels--beyond all comparison the all-time record.

*Poland, Hungary, Jugoslavia, Bulgaria and Rumania. 1930 export figures for the "Little Five" are not yet available. *See table above: Canada exported in 1930 twice as much wheat as Russia. /-Recipe (TIME, Dec. 8): two parts of whole wheat and one of whole rye cooked in a double boiler until the kernels of wheat burst open. Cooking requires from four to five hours.

This file is automatically generated by a robot program, so reader's discretion is required.