Central Pacific Expects Complete

Pooling Plan To Operate

Governments and Big Firms Faced With Many Awkward Problems

By R. W. Robson

SUVA, Sept. 29.

TNDICATIONS here are that the A Fijian Government (which, for this purpose, includes the Western Pacific High Commission) is facing a diffi cult position, in relation to the Copra Marketing Pool. It appears as if the Pool will come into operation.

The Suva merchants can sell most of the copra hereabouts at prices that, by

and large, are substantially better than the A£4/10/- guaranteed by the New Guinea Pool. The best price current here just now is £6 Fijian per ton—equal to £6/15/- Australian per ton, in store at shipping port.

That is £2/5/- per ton more than the big New Guinea producers are offered by the New Guinea Pool for Rabaul hot air-dried, which is virtually the No. 1 copra of the Pacific.

Everything in relation to copra here was going along encouragingly, until late August, when there came indications that the Fijian Government proposed to put the South Pacific Copra Marketing Pool into operation.

This gave the merchants a distinct shock. W. R. Carpenter & Co. now are operating vigorously here; this branch was buying good grade Fiji copra from all interests for the Carpenter crushing mill in Canada; and the price was firm and rising. “Leave us alone, and well solve this thing” said the merchants.

But the Government was not happy.

Some little time ago, it tried again to introduce copra grading. The Carpenter mill—to which the Government is very favourably disposed—wants guaranteed high grade; and perhaps it asked the Government for compulsory grading.

But opposition to grading came so strongly from certain quarters that the Governor, with reluctance, dropped the grading plan.

In this fashion, perhaps, some of the big firms put themselves off-side.

They were not to know that the Gov ernment had two major copra problems on its hands. The first lay in the fact that there is a huge accumulation of unsold copra in the Solomons and in Tonga. The second was the pressure, coming suddenly, and maybe unex pectedly, from Australia, in favour of a South Pacific Copra Pool.

This is only guess-work. But one can imagine the embarrassed Governor say ing: “Very well! They won’t have copra grading. Let’s see how they like copra marketing through a compulsory pool”.

The merchants did not like it a bit.

They received, with consternation, a copy of a draft agreement between Aus tralia, New Zealand, Fiji, the Western Pacific High Commission, and the Free French Government in the Pacific, which already has been approved by the Gov ernments concerned. That agreement is closely based on the “plan” created at the Pacific Copra Conference in Sydney last January, and which was published in the “PIM” in May issue. rpHE Suva merchants were informed.

JL early in September, that permission to export copra was about to be withdrawn —evidently as a preliminary to the introduction of the Pool.

This caused greater perturbation. They had—and, at this date, still have—in quiries for thousands of tons of good Fiji copra, for Canada and elsewhere.

The Carpenter mill literally is clamouring for copra; and the indications now are that, if it is not to be supplied from New Guinea and Fiji, it will be bought by the Canadian mill from Philippines or East Indies. The Canadian mill, built to crush copra, cannot be expected to stand idle, while Governments engage in leisurely arguments and public servants play golf on Saturdays. A copra mill

must make its copra-supply contracts months ahead.

The Suva merchants, I understand, have placed these considerations urgently before the Fiji Government, and sought permission to make export contracts, at least up to the end of November. But, at the moment of this writing, nothing has been done.

I guess again; and my guess is that Suva is awaiting word of some kind from Canberra, and Canberra, as usual, is awaiting a decision by some Minister or Ministers who is playing hop-skip-and jump around the political ring.

It is a shocking thing, that sales of Fiji copra should be lost, and good money kept out of the Colony, just because pub lic servants somewhere will not hurry on with decisions.

IT is my belief —based on circumstances as I know them personally in Aus tralia, New Guinea and Fiji—that the course of events will be as follows: — (1) The South Pacific Copra Pool will be brought into operation before the end of 1941. There will be a Control Board in Sydney, and a Control Committee, with pretty wide powers, in each of the several Territories affected. All copra produced in the South Pacific will go automatically into the Pool. Planters will receive a guaranteed price, which may vary in the different Territories, and a promise that, if the Pool gets more than the guaranteed price, the balance remaining after costs are deducted will be divided pro rata among producers. (2) As it is obvious that the Pool can not begin marketing until its organisation is complete, and some copra buyers are threatening to go elsewhere, the Gov ernments concerned will give the mer chants authority to buy and ship until, say, the end of the year. (3) As the Governments try to plan their Pool organisation, and make it function, they will be appalled by the number and complexity of the practical difficulties that will arise; and it might even happen that, presently, they will hold another Copra Conference, to decide whether they will go on with the Plan.

I think most of the high officials con cerned know, now, a great deal more about the tricks and troubles of the copra industry than they knew 7 a year ago. But it is more likely that they will modify their original plan to provide for far more co-operation with the big South Sea companies than they had at first contemplated.

I admire the High Commission officials for their determination to do something for the gravely embarrassed copra pro ducers of Solomons, Tonga and G. and E.

Colony. The Suva merchants are “sitting pretty”, at the cross-roads of the South Pacific; and they can sell and ship all of Fiji’s annual production of 20,000 tons (for production has fallen to that, from 35,000 tons p.a.). But planters in the smaller, more isolated groups have shipped scarcely a ton for many months, and their position is desperate. The Suva Government is determined that the well placed section of the industry shall carry the unlucky section.

IF the Plan, as it is now, is brought into operation, I think it will fail unless it is adjusted so as to take into account certain vital practical con siderations.

For instance, while the Control Board can force all production into the Pool, it cannot compel buyers to buy from the Pool. There still is a great deal more copra available for sale in the non- Hunnish world than can be consumed through ordinary channels.

It is certain that, if the Board is not going to co-operate fully with the big companies in using their facilities for storage, marketing and shipment (and

the original idea seemed to be to "restrict the monopolistic powers of the big firms’’), the organisation which the Board will create (on public service lines, probably) will be so expensive that growers will receive little, if anything, more than the £4/10/- or so they are originally guaranteed. Thus, growers will support the big firms in agitating against the Pool.

The Pool’s only hope of success seems to lie in co-operating with the big companies.

But, for this co-operation, the com panies doubtless' have a price. They naturally will want protection in relation to their huge mortgage investments among coconut planters; and they are going to ask why the high grade copra ihey produce on their own very numerous plantations should be “pooled” with much lower-grade stuff, so that their present good prices are destroyed.

A little thought suggests that, if special consideration is to be given to the big companies, the whole structure of the

Plan may have to be altered. This ap pears unlikely at present It is more likely that there will be a period of modification and compromise and of placating the big companies.

Otherwise, it win be war with the big companies, and bad business for everyone.

IT is my opinion that the South Pacific Copra Conference, in January started off on the wrong foot.

It should have recognised the huge, far-reaching and very-sensitive power and * n kig trading companies m the South Pacific, and immediately have sought their co-operation and good will. Then, something really practical— and, maybe, something of a permanent nature would have been achieved quickly.

The power of the big companies in the South Pacific is great. They have reaped the due and deserved reward of bold pioneering, ceaseless enterprise and shrewd trading. But their power has grown until, now, it is monopolistic—and the far-sighted men on their directorates probably would be the first to acknow ledge it. It is my belief that those men could have been enlisted to act, with the embarrassed Governments, in creating, out of the crisis in the copra industry, what virtually would have been a New Order in the Pacific.

That way, everyone would have saved a little—the Governments, their prestige; the big companies, their vast organisations and their immense investments (atten uated, maybe, but secure); and, above all, the small planter and trader would have seen his home protected, and the way opened, later, to greater freedom of life and enterprise.

The present Plan, if persisted in, in its original form, win lead inevitably to turmoil, and if it breaks down, even tually, the companies will carrv on, stronger than ever.

But, after informal chats, extending over three days, with merchants, shippers, Government officials and plain citizens, I am hopeful that moderate counsels will prevail, and wisdom find a way out.

HERE are a number of practical ob jections to the South Pacific Pool, as planned in the draft agreement between the Governments. These objec tions come from merchants in general, and especially from Suva:— (1) The Board of Control will comprise a chairman and 4 members. Australia ap points the chairman and 1 member; New Zealand 1 member; Fiji (and High Com mission) 1 member; Free French Colonies 1 member. Yet this Board is to have almost absolute power over disposal of funds; and Australian Territories’ pro duction is only slightly more than Fijian and Western Pacific Territories’ produc tion. NZ Territories’ production is in significant. Clearly, Australia never very friendly to Fiji in a commercial sense (witness the banana fiasco!), is to have far too big a voice in this Board. (2) The financial powers and respon sibilities of the Board and the Territorial Committees are vague and ill-defined.

After all, the real purpose of the Plan is to get as much money as possible into the hands of producers as soon as pos sible. But the Plan apparently regards a score of other things as more important.

Economical administration is vital to the Plan. (3) The Plan wipes out all advantages which some territories enjoyed over others in regard to shipment. It looks like complete equalisation, among all producers in all territories. This is good for planters in the Solomons, Tonga, G. and E. Colony; but bad for those in New Guinea, Fiji, Samoa, where freights have been as much as £2 per ton lower. (4) There is insufficient provision for the protection of contracts of sale and

shipment in existence when the Plan comes into operation. (5) Why is the Unilever concern in Australia specifically exempt from the operation of the Plan (the BSI copra it produces may be taken to Australia, free of the Pool), while no provision is made for exempting other concerns simi larly situated? (E.g.: Under the Plan, copra produced on the Carpenter plan tations in New Guinea must go into the Pool: yet it is destined just as directly for the Carpenter mill in Canada as is the BSI copra for the Lever mill in Sydney.) (6) The Board is given complete dis cretionary power regarding the distri bution of funds remaining, after growers have got their guaranteed price, and after all “costs” have been provided for.

In the opinion of practical men, this is going to lead to endless trouble between the various interests concerned. They urge that, instead, the Board be made to conform to a definite formula, and not

be allowed to “distribute in such propor tion as it thinks fit”. (7) The Plan, apparently, provides that there shall be special Territory costs charged against copra sales (which would be deducted from moneys sent to that Territory for distribution), and that, if storage charges anywhere are exceptional some of the storage costs shall be charged against the general fund instead of the Territory fund. This is regarded as likely to prove inequitable, and open to abuse.

The last of the Tahitian soldiers in Sydney is Eugene Te Tutavae, a volun teer from Papeete. Since the departure of his comrades, he has been an inmate of one of the military hospitals suffering from asthma. However, he now is on the mend. In the same hospital is Volunteer Andree, of Noumea, New Cale donia, who is still in plaster as a result of a train accident.