§ 27. Mr. Osborneasked the Minister of Food why the negotiations of the International Wheat Agreement have continued for two months without a settlement; and whether he will make a statement on the position.
§ Major Lloyd GeorgeBy a majority vote the International Wheat Council has 190 decided to recommend to member Governments that the International Wheat Agreement be extended for a further three year period at a new price range per bushel of 2.05 dollars maximum and 1.55 dollars minimum to replace the present range of 1.80 dollars maximum and 1.20 dollars minimum.
After mature consideration Her Majesty's Government have decided not to accede to the new Agreement. In the judgment of Her Majesty's Government the maximum price of 1.80 dollars written into the present Agreement—with the valuable insurance afforded by the guarantee at the minimum price—is a fair reflection of the value of wheat in present conditions in a free market.
We were nevertheless prepared, in a sincere attempt to reach a settlement acceptable to all, to agree to an increase of 20 cents in the maximum price—and an increase of 35 cents in the minimum price—despite the heavy additional dollar expenditure this would have involved. Her Majesty's Government consider that this would provide a generous settlement and feel unable to go further.
§ Mr. OsborneIs the Minister aware that he will have the whole country behind him in refusing to pay an exhorbi-tant price for wheat? Can he say whether the British negotiators pointed out to the American sellers how unreasonable it is for them to demand higher prices for their wheat at a time when they are buying sterling commodities like rubber and tin so much cheaper? Has he ever bought wheat at the minimum price or is the maximum always the minimum?
§ Major Lloyd GeorgeIn answer to the last question, I would say that the experience of the last four years of the agreement has been that on almost all occasions the maximum price has been received by the exporter and paid by us. Of course, every possible occasion was taken during the negotiations to make clear what the hon. Gentleman suggested, that in our opinion it was too high a price.
§ Mr. T. ReidWhat is the cause of, or the justification for, this increase in price? Is not it that the American Government have a farm support policy which pushes up the price of wheat and now they are asking us to meet the cost of that policy?
§ Major Lloyd GeorgeI think that there is a great deal in what the hon. Gentleman says. They have a support price policy which involves them in considerable payments. We think that the price we offered was very generous. Naturally we were prepared to make certain payments for an agreement, but an agreement at any price was more than we could support.
§ Sir W. SmithersIs not the cause of all these difficulties the fact that the Government still persist in bulk purchase? Why not get out of the business and let the experts deal with these matters? It may be that we want to buy wheat, but the Canadians also want to sell it.
§ Mr. BottomleyIn view of the decision announced earlier today that the purchase of cereals and feedingstuffs is to be handed over to private traders, can we have an assurance from the Government that those traders will be prevented from paying a higher price for this wheat?
§ Major Lloyd GeorgeIt would be a very clever man indeed who could forecast the price of wheat for the next three or four years. I am perfectly satisfied that the price will have to come down, especially in view of the stock position which is very plentiful. I cannot possibly foretell what the position will be, but I am satisfied that we could not possibly have agreed to the suggested figure of 2.05 dollars.