New Guinea Plan To Aid Copra Industry
pp. 31-34 · Read in the full issue
A PRACTICAL plan for supporting the New Guinea copra industry, during the present crisis, has been evolved by the Planters’ Association of New Guinea. It is set forth in the following letter to the Administrator, dated Octo ber 4, and signed by J. C. Mullaly (presi dent), H. Adams (vice-president) and V.
A. Pratt (councillor). The plan is as follows; “Whilst appreciative of the efforts of the Commonwealth Government and of the Administration to find a solution to our difficulties . . . the Association re grets having to submit its considered view that that system of assistance arranged does not meet requirements essential to the economic integrity of the residents engaged in copra produc tion and agricultural development gen erally.
“The Association’s view is based prim arily upon the contention that it is un sound to further burden the already overloaded copra producer. The Common wealth’s officer provides loans for meagre sustenance, especially excepting all forms of insurance and assurance. There is no requirement or provision for the full pro duction of copra, or, alternatively, pro visions for the destruction of the con stantly falling coconuts to prevent their growth which would soon turn a plan tation into a terrifying wilderness. Any sound business planter must cease, as has now happened, to produce copra for the want of storage and market, either with or without the Government’s offered loans. Likewise, as the prospects are, he will not employ labour for the destruc tion of nuts and maintenance of plan tation which would produce no revenue, but only debts.
“It is admitted that large profits have been made from the copra industry of this Territory during the past 20 years.
However, they have not been made by the relatively small producer, or any other private planter, excepting for a few months. Consequently, when faced with the present situation of no markets and no immediate prospective markets, the private producer has no reserves upon which to fall back, and is faced with bankruptcy, failing adequate Govern mental intervention. The arrangement offered to the planters is not in the nature of Government assistance pro vided for the many Australian primary industries.
“The country producer in Australia Is cared for, from production to market, by the Parliamentary representative, but here, without any representation, we are offered meagre loans for sustenance.
That means not even for production, be cause production is impracticable without storage' and market.
“The copra industry has credited the trade balance of this Territory with ap proximately £20,000,000 during the past 20 years; also, during that period it has supplied either directly or indirectly something like £2,000,000 to the general revenue of the Territory—the major por tion of Public Funds for the period re ferred to. By doing so, it has materially helped to create, secure and maintain the independent economic security of New Guinea—the front door to Australia. The industry can do nothing in that regard to-day. However, there is nothing upon which to assume that it will not do so in the future.
“The Association claims that those en gaged in the copra industry, scattered throughout the Territory have accepted
a large measure of the responsibility and obligations towards the natives of this Territory, undertaken by Australia in accepting the Mandate.
“Under the circumstances, it is con tended that the Commonwealth Govern ment’s proposal of interest-bearing loan assistance to planters is inadequate. The proposals have the effect of loading the producer with an accumulation of 4 per cent, interest bearing debts, with no definite assurances whatsoever of any corresponding credits. The majority of the planters concerned are men well be yond middle age, most of them with years of service in the last war to their credit, followed by 14 to 20 years of work, worry and struggle to create and secure for themselves and their depend ents an asset in this Territory. The Government’s proposal can only promise to these planters a position of accumu lated indebtedness which it will be im possible for the majority to liquidate.
“The Association submits for early and urgent consideration the following pro posals for substitution of the Govern ment’s arrangement. The application of our proposals would relieve the planter concerned of a crippling impost of evex increasing debts, and which can at the same time be implemented without un due embarrassment to either the Com monwealth Government or the local Ad ministration, and the cost of which would be little in excess of the Government pro posal, and, in the end, the Government may even be reimbursed in full.
“The Association’s proposals are sup ported by the belief that—(a) Copra will keep in storage for a considerable period without undue deterioration: (b) Coco nut oil extracted from copra can be stored for an indefinite period without deterioration: (c) There will be sooner or later a big demand throughout the world for vegetable oils; and (d) The Commonwealth Government is in a posi tion to provide the finance and other facilities necessary to retain and later market the produce—an accomplishment which it is impossible for the individual planter to attempt.
“The Association's proposals are, as follows: 1. A local Copra Board to be created, con sisting of:—fa) An Administration senior official. (b) Delegate of the Custodian. (c) Representative of the planting industry. (d) Representative of the local commercial firms. 2. The Board to be provided with funds from the Commonwealth Government, to be operated by the Board through the local Commonwealth Bank. 3. The Board to make advances in respect of copra produced as hereinafter defined, and store it, or store the oil extracted therefrom, pending future sales as opportunity arises. 4. Funds necessary to be provided by the Com monwealth Government to be obtained from the New Guinea Gold Tax Trust Fund. Any fur ther finance necessary to be obtained by a spe cial taxation levied on excessive profits derived from the gold mining industry, and which are remitted outside the Territory. 5. Those to participate in these proposals shall be as hereunder defined:— (a) Persons substantially dependent upon the copra industry for their livelihood, whether British, Alien or Asiatic. (b) Planters engaged on war service. (c) Absentee planters who can show to the Board good cause for their absence. (d) Native producers approved by the Board. (e) Mission organisations who prove to the Board that the non-sale of their copra will seriously and adversely affect their native welfare activities. 6. With regard to paragraph 5 (d) above, the following qualifications to be observed:—
(aj No provision for natives to contribute direct to the Board. (b) Native-owned coconut groves to be defined into zones, from each of which those natives may dispose of their produce to a trader approved by the Board. (c) The prices to be paid to the natives for their produce shall be governed by the Board. (d) Any goods sold or bartered to the natives by a trader shall be approved by the Board. (e) All copra obtained by traders under this section shall then be subject to these proposals. 7. Priority in marketing by the Board shall be extended to stocks of copra stored by the commercial firms and others, as at the date of these proposals. No advances shall be made by the Board on account of the abovemen tioned stored copra, until such copra has been disposed of. 8. Copra obtained by commercial firms sub sequent to the date of these proposals shall be subject to the control of the Board for mar keting purposes. No advances shall be made by the Board for such copra until disposed of. 9. Subject to the approval of the Board, any person wishing to extract oil or otherwise pro cess copra produced by him shall be exempt from the control under these proposals, so far as relates to such copra. 10. Storage accommodation shall be made available at Rabaul, Kokopo, Kavieng and Madang. Should sufficient storage be unavail able at any of these centres the Board to make provision for the erection of additional sheds of approved designs from local materials. 11. The storage centres shall be used, as far as practicable, to radiate shipping services regu larly and expeditiously to all outlying planta tions. The Board to contract with local ship and schooner owners for these services. 12. The estimated annual production of copra on which advances may be made under these proposals is 32,000 tons, and an additional 7,000 tons should the Missions be Included. 13. All copra upon which advances may be made will be stored at the storage centres and accounted for by Copra Inspectors to District Officer, who will arrange for cash advances to be made to the producer concerned. 14. The average price to be paid to the pro ducer shall be £4/10/- per ton exclusive of freight. The Board to have the power to
increase or reduce this average advance should individual circumstances be proved to warrant such variation. 15. The estimated cost of these proposals to cover initial advances for copra, shipping, stor age and administrative expenses, etc., is £190,000 per annum, o* £222,000 if Mission copra is included. 16. Sales of all copra coming under the con trol of the Board shall be disposed of by the Government selling authorities in Australia. A selling commission to be paid to commercial firms effecting sales. 17. These proposals are submitted for 12 months’ operations, but may be extended by the Commonwealth Government. At the end of the Board’s activities any credit balance remaining, after payment of all relative debts and costs, shall be distributed to the copra contributors in proportion to their copra supplied. How ever, final payments under this section shall first be applied to liquidate respective debts owing by copra producers. 18. The Board shall have the power to grant compensation to any planter whose production is so uneconomical as to cause him to abandon his property. 19. The Board shall evolve a scheme to ensure the payment of native labour deferred pay. 20. The Board shall take all steps to assist the Price Control Commissioner regarding prices charged by trading firms for plantation requirements. 21. Planters whose properties are not pro ductive shall be entitled to apply to the Board for 4 per cent, interest bearing loans which shall be provided from a special fund allocated for this purpose.
“In submitting: the foregoing proposals,
the Executives of the Planters’ Associa tion respectfully submit that these pro
posals offer the following advantages;—
fa) Inter-island shipping service would be resumed and maintained otherwise a subsidy would be required to service and support the necessary means of transport and communications. (b) Whilst planters are producing copra, native labour is normally en gaged in employment, but if deprived of
employment many undesirable features
of the native mind will re-assert them
selves, thus causing disruption to the
native village structure and ever increas ing embarrassment to the Government in its native welfare functions. (c) Consequent upon application ol the Government arrangements, the native impression of the higher races reaction to a crisis would relegate our prestige for a generation. (d) Under our proposals, the producer will make everv endeavour to carry on as normally as practicable, whilst under Government Arrangement he would have little incentive to work a plantation on bankruptcy lines. (e) Plantations will be preserved and maintained in reasonable condition.
“The above proposals have been care fully considered and compiled by the sub-committee of the Planters’ Associa tion Executive, and it is submitted that they should receive favourable and early consideration by the Administration, and adoption by the Commonwealth Govern ment.”
Support By Director Of
Agriculture
IN a letter to the Planters’ Associa tion, dated October 11, the Director of Agriculture (Hon. George Murray) made the following comments upon the plan:— “I am in accord with the view that the relief offered by the Commonwealth is most unsatisfactory and, in my opinion, is an uneconomic proposition, as it is like throwing good money after bad.
“My opinion is that in the event of copra not being purchased by the firms, it should be purchased by the Govern ment and that a Board or Committee should be appointed to organise the scheme on a sound financial basis.
“At present it seems possible that market conditions may improve some what as the firms are still buying copra and will continue to do so as long as there is storage space. An oversea ship recently loaded in Rabaul, another is ex pected soon, and, I am informed that others are likely to follow. The firms must be selling the copra, as they would not be shipping it for storage overseas.
If the firms continue to purchase copra as long as they have storage space, the situation will be relieved to a certain ex tent. It would be unwise, however, to trust to chance and I consider that the Board should be organised, without fur ther delay, to be in readiness for any eventuality that may arise.
“In accord with your covering letter of October 4, I beg to make the follow ing comments on your proposed com munication on the copra situation, for the consideration of Cabinet.
“sth Paragraph. It has been disputed by many that copra cannot be stored without deterioration. This Department is in a position to decide on that point, better even than Ceylon, as there has never been an occasion in the latter country to carry out such investigations, whereas the less frequent overseas ship ping in New Guinea has enabled this
Department to investigate copra stor age for several years. We have had well cured copra in a storage shed, with other copra, for up to 31 years, and it was still in fair condition on examination.
“The Netherlands East Indies Govern ment are now preparing to store 450,000 tons per annum, and are building neces sary godowns (storage) sheds for that purpose.
“I consider that there is no necessity for the Commonwealth to finance the scheme in the first place. The surtax on gold, providing £2*60,000 per annum, which is placed to the credit of a Trust account, presumably for Defence, could be used for the purpose. The mainten ance of the leading agricultural industry is just as much a defence measure as any military or naval enterprise. Com ments: — 1. (a) I consider that the only senior Adminis tration officer having a thorough knowledge of the copra industry is the Permanent Head of this Department and, therefore, that he should represent the Administration on the Board. 2. As stated above, the funds should be pro vided from the surtax on gold, which, of course, is additional to the gold royalty. 6. Natives should have the option of disposing of their copra to the Board the same as other producers. In my opinion, no invidious dis tinctions should be made in producers. 7. The firms have their own organisations for selling, whereas the Government has no such organisation and could not have the same advantages in disposal of produce.
8. No discrimination between firms and plant ers in disposal of produce. If w.e start mak ing discriminations, confusion or worse must ensue. For instance, several producers known to me had sufficient foresight early in the war to make their own provisions for disposal of their copra and, if discriminations are to be made, they should be permitted to enjoy the profits of such foresight. 12. There should be no discrimination made against the Missions. One of the Missions has been carrying out valuable Investigations in new uses for coconut oil in which they have the full co-operation of the Department of Agri culture and they are entitled to all the privi leges available to other producers. If the firms
are to be included in a pool, the Missions should also be included. 14. The Commonwealth having fixed the price, the Board should not be permitted to modify it. If there is sufficient justification, further payments could be made as bonuses after the copra is sold. This is -in accord with business and was practised by the Papuan Industries Ltd., of which I was manager nearly 30 years ago—to the benefit of all concerned. 17. The final payments to be made to the producers for their own disposal, not neces sarily to liquidate their debts to the firms. 18. The Board should not have the power to grant compensation to any planter whose costs of production are excessive or uneconomical. One planter in New Britain has informed me that he cannot produce copra for less than £lO per ton, and another says not for less than £8 per ton. In my own experience, copra has been produced for less than £4 per ton and on a large proprietary estate of 18,000 acres in Malaya with w r hose organisation I am thor oughly familiar and where I have had many lengthy visits, the copra all-in costs of pro duction are under £5 per ton f.o.b. Port Swettenham. 21. I do not consider such loans justified; for one thing there is no such fund available.
This is the province of a Rural Bank.
Sec. (a). Shipping is outside the province of the Board. The firms will provide transport if cargo is available.
Miss Joyce James, A.Mus.A„ of Vic
toria, has taken up duties as nursing sister at the Ballantine Memorial Girls’
School, Suva, Fiji.