Luck of the MOF Copra
pp. 7-8 · Read in the full issue
Contract
ALL British planters in the South A Q f° or the* Sp£ Sy get not £ n f y cash> but also a no table guarantee 0 f stability in the copra market, The British Ministry of Food contract, made at the end of 1948, gave a guaran
teed price of £4B Sterling per ton for 1949, and undertook that, over a period of nine years (expiring December, 1957) the price should not rise or fall more than 10 per cent. It rose only 10/- in 1950, but will rise the full limit of 10 per cent, in 1951.
At the time, it seemed a good contract, because growers generally feared a fall ing market. As it turned out, it was of great benefit to Britain, and not to the growers. Britain bought our copra at £4B Stg. per ton; and, ever since, the world market has been well in advance of that figure. Last September, for example, while Britain was paying £4B Stg. for New Guinea copra, Straits copra was seling at £llO Stg. (£l4O Aus.) cif European port.
Since then, prices have been between £9O and £lOO Stg. Early in September, Phil ippines copra was selling at 275 US dollars (£l2O Aust.) per ton, although it fell to 235 dollars in October. Even if Britain lifts her price, under the contract, by £5 per ton for 1951, she is still doing extreme ly well—in fact, she is enjoying a profit of at least £4O Stg. per ton. Had that been a true reflection of world markets, we should have called it the luck of the nine years’ contract which the planters solemnly accepted; and the South Pacific, while reflecting ruefully, that it is a very high price to pay for “stabilisation,” would not have squealed against the turn of fortune’s wheel.
This has not come about through the luck of the contract, however. It is mostly the result of the sterling deval uation trick played upon Copra producers by the British Socialist Government: and it has left a foul taste in the mouths of Pacific producers.
When they made that MOF contract at the end of 1948, there was no suggestion that Britain—that ancient bulwark of in ternational finance —would repudiate her currency. But within a year, under the baneful influence of the Socialist muddlers in control, Britain de-valued her £ Ster ling bv about 30 per cent., in terms of the US dollar (or of gold). Although copra, like wool and wheat, has a definite value on the world’s market, irrespective of what individual nations may do with their currencies, there was no suggestion by the British Government that the MOF contract should be revised.
Consequently, ever since, Britain has been buying copra at around £4B Stg. per ton, although in the world’s free market it has been selling at from £75 to £l2O Stg. per ton. That is barefaced commer cial trickery: and the South Pacific planters should never rest in their de mand that the MOF contract should be revised, in the light of the devalued Ster ling. It is a reflection upon the Austra lian Government that it has made no attempt whatever to prevent the New Guinea producers from being robbed in this way. Many planters have made protests, but all seem to have been ignored.
PAPUA-NEW GUINEA copra-producers will now be justified in insisting that Canberra discontinue that “stabili sation” deduction of £5 per ton. The Fund, already, is over £800,000; and now there is little likelihood that it will be needed. The effect of the new rise of 10 per cent., under the MOF 9-years con tract, is that, even if the market hence forth falls continuously, the price cannot be reduced beyond £3O before 1957.
That £5 per ton now could quite prop erly go to the planters, as some slight compensation for the bare-faced robbery of them during 1950 by Britain under a contract made by Canberra, and which no New Guinea planter has ever seen. The £BOO,OOO now accumulated in the “Stab ilisation Fund” should be distributed among the men whose industry created it; but such an act of simple justice is
most unlikely. It probably will be grabbed by the politicians for some fanciful scheme, like providing woollen petticoats for the nursing mothers of the Chimbu.
THE Fiji planters have escaped “stab ilisation”; but they, naturally, and very properly, are protesting angrily against the action of the Fiji Government in grabbing £2 per ton of the new copra money as an export tax, and defending itself by saying that it thus can abolish certain customs duties and so reduce the general cost of living.
The Fiji planters ask why they should be specially taxed for the general benefit of the community—especially as the plant ers, as a section, derive less benefit from public utilities than any other class.
The planters, have taken occasion to attack Fiji’s form of government. They declare it is far too expensive for a Colony of Fiji’s circumstances. They further ask why they should be taxed, while the ex port tax on the Colony’s other chief product, sugar, has been removed.
The plain fact of the matter is that these Governments —all more or less Socialistic in character—simply cannot keep their fingers out of the coffers of any industry which appears to be highly profitable. They are forced continuously to make concessions to the greedy, but highly organised, trade unions; and they try to balance the national economy by heavier impositions upon the less tightly organised primary producers.
Fiji has got its copra tax; and it hasn’t a chance of escaping from same while the Socialists rule the Departments in London. It will be a surprising thing if Australia, trying to escape the worst effects of its maddening inflation, does not similarly set its tax-gatherer after the NG copra producers, either to collect an increased export tax, or an income tax.