Rice from Outback

To most Australians, "humpty doo" means "all right, everything is O.K." But to the hardy residents of tiny Humpty Doo in Australia's Northern Territory, the term is a wry joke. Humpty Doo lies in a waste of desert and jungle twice the size of Texas--the territorial "Outback" below Darwin. It is a land of crocodiles and kangaroos, of torrential, 60-in. rain fall half the year and bone-dry drought the rest. Last week Humpty Doo held promise of living up to its name. After three years of study, a group of U.S. businessmen headed by Los Angeles Industrialist Allen Chase had formed Territory Rice Ltd., planned to spend at least $90 million turning the Outback into one of the world's biggest rice-producing areas. Their goal: production of 625,000 tons of rice annually, nearly one-half of 1% of the total world supply.

Dams & Markets. Chase and Territory Rice signed a 30-year deal with the Australian government to develop 500,000 acres of the Outback's alluvial plains into a settled and prosperous farming area. Within five years, the company must choose its acreage, within another ten years prepare the land, build a complex of dams, irrigation ditches, etc., and bring in the first crops. After that, it must sell the developed land to settlers, who will farm it while Territory Rice acts as agent for the rice crop, mills and ships it to markets. With only a token 25-c--per-acre maximum rental, Chase estimates that Territory Rice will be able to deliver rice to Asian markets from Malaya to Japan for as little as 2-c- per Ib. v. current world prices of 5-c- to 7-c-.

To hardheaded businessmen, Territory Rice's plans might sound overoptimistic. U.S. ricemen call the 2-c- per Ib. figure "unrealistic," strongly doubt that Chase can grow, mill and ship rice for anything like that price, also point out that there is no world rice shortage; many rice-exporting nations have actually had surpluses since 1954. Nevertheless, Chase & Co. are convinced that there is an enormous, untapped market for rice in such lands as India, Ceylon, Malaya, Borneo, Indonesia, Japan, even China. While there may be a technical surplus, shipping costs from many exporting nations are so high that millions of consumers all over Asia cannot afford all the rice they need and should have. Thus, by growing rice in Australia, close to the markets, Chase hopes to chop shipping costs to a fraction of what it costs the U.S., for example, to ship rice to Japan.

Hollywood to Australia. Allen Chase, 43, is a hardheaded businessman in his own right who has been looking for a way to get into big-time farming for years. Starting with a small machine shop (aircraft parts), he netted millions in World War II, spread out to real estate, and split his time between cooking big deals and entertaining Hollywood friends in his $150,000 Bel-Air mansion. First Chase thought of growing rice in Brazil, then Mexico. Finally, in 1953, he heard about Australian government experiments with rice cultivation in the Outback. It sounded so good that Chase went to Australia for a look, came back and set up a syndicate with friends (among them: Signal Oil's Samuel B. Mosher, TV Star Art Linkletter, American President Lines Chairman Ralph Davies) to run a $40,000 survey. By 1954 the report was in: the monsoon floods could be controlled to provide the right amount of water for rice cultivation, the land is so level and rich (eleven ft. of topsoil in some spots) that it could be prepared for as little as $100 per acre, while four deep-running rivers in the area provide inexpensive transportation to the seacoast.

When another $225,000 investment proved that rice yields of 2,460 Ibs. per acre of milled rice (v. 1,935 Ibs. for U.S. fields) were possible, Territory Rice decided to drive ahead full speed. With help from Australia's Mainguard Investment Co., which has a 25% interest in the company, Territory Rice floated a sizable stock issue, got enough capital to plant 2,000 acres of rice this year, another 20,000 acres in 1957. Thereafter, it expects to move through the plains at the rate of 100,000 acres annually. As each new section is opened up, the company will sell off land to settlers in 500-acre lots, hopes to have it all sold by 1963. But the deal does not end there. As agent, Territory Rice will provide the farmers with heavy tractors, planes to air-seed their paddy-fields, barges to carry the crop to mills. By 1959 it will have the first of five mills for the area, while Utah Construction Co. is already drawing up plans for the complex of dikes, dams, irrigation ditches and catch basins.

No one knows whether the project will live up to Territory Rice's high hopes. The climate, world rice prices, and the problem of payments from importing nations are among the question marks. But Allen Chase and his backers are confident that they have a good thing in the Outback. Says Chase: "This is exactly like the Nile Valley, only it is twice as good."

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