Growing Anger Of British-Pacific
pp. 10-11 · Read in the full issue
Copra Producers
How Sterling Devaluation Robs Them of £30-£40 Per Ton
THERE is steadily growing, throughout the British Territories of the South Pacific, a strong discontent with the price being paid for copra on British account, and resentment at the refusal of all the Governments and Government in strumentalities concerned to do anything to secure a review of that price.
Generally, the price being paid British- Pacific coconut planters in 1951 is in the vicinity of £5O per ton, FOB. (It varies, according to whether it is paid in Sterling, Fijian or Australian currencies).
But the free market price, as quoted in London and elsewhere in January, is over £lOO Sterling per ton, at European ports.
At the end of 1948, all British-Pacific planters accepted the contract proposed by the British Ministry of Pood— namely, that they should sell their copra, for a period of nine years, to the Ministry of Food, at a commencing price of about £5O per ton FOB, that price to be ad justed from year to year, but not to move up or down, each year, by more than 10 per cent.
This appeared a sound plan, it meant stabilisation of the industry for nine years.
But, since then, two very grave dis abilities have appeared: Continuing inflation has lifted en ormously the costs of production; while receipts from copra remain fixed, in terms of the MOF contract.
Within a year of making the MOF con tract, the British Government devalued the £ Sterling—the devaluation, in terms of gold or the United States dollar, amounting to about 30 per cent.
It has taken the British-Pacific planters fully a year to realise the character of the confidence trick that has been played upon them by the British Socialist Government. But, having been slow to anger, they now are exceedingly wrathful, and they will demand action.
Copra is a commodity in world-wide demand. Therefore, it has a world value, expressed in terms of gold, or dollars.
Consequently, if copra was worth £5O Sterling early in 1948, when the contract was made, and it held its value, is clearly became worth about £66 Sterling (or one third more) as soon as Sterling was de valued by one third.
Britain, devalued her currency in order to stimulate her export trade; and, in doing that, she recognised that she would have to pay correspondingly more for all her imports. But, because she had South Pacific copra under that MOF contract (£5O Sterling per ton) she continued to pay £5O Stg. per ton . . “Trickery” is too mild a word.
The British Socialist Government tried to do exactly the same thing with the Argentine, with which country the Ministry of Food had a meat contract.
But the Argentine, quite rightly, would have none of it, and refused to carry on the contract. That is why the un fortunate British people, to-day, are rationed down to Bd. worth of meat per week.
Two British countries, Ceylon and Seychelles, refused flatly to go on with the MOF contract and broke it off at the end of 1948-49.
THE South Pacific Governments con cerned with this British Pacific copra racket are the Gevernments of Australia, New Zealand, Fiji, and the High Commission for the Western Pacific (the latter controlling Solomons, Tonga and Gilbert and Ellice prices).
Although the character of the trick which has been played upon their copra producers by the British Socialist Govern ment has been apparent for at least 18 months, there has been no move by any of these Governments to protest to Britain and seek a revision of the MOF contract.
One person—notoriously a dullard — said that the planters entered the MOF contract willingly enough. They should not squeal, now, when the price turned in favour of Britain!
The copra-growers could have no kick against the ORIGINAL contract; and that 9-years-contract is not the substance of their protest: They argue, with justice, that the British Government, when it de valued Sterling, itself broke the MOF con tract. Sterling, in 1948, meant something very different to what it meant in 1950; and it was Britain herself who altered the value of the £ Sterling.
The copra-growers are not on such sound ground when they protest that no provision was made in the contract against the enormous increase in the costs of production, caused by inflation.
To may be claimed that this unprecedented inflation is something that could not have been foreseen, and therefore both parties must accept “the luck of the contract.”
But the planters are justified in claim ing that they should not accept respon sibility for the loss through idurrency inflation, because under the MOF contract they cannot raise their selling price to take care of higher costs, and because the MOF contract was not negotiated by them, or by experienced traders, but Governmental bureaucrats. Experienced traders probably would have made pro vision in the contract against both Ster ling devaluation, and inflation.
Actually, no planter or planters’ organisation has never seen this MOF contract. In the circumstances, they are entitled to regard it with a measure of contempt.
The position to-day is that Britain is ouying South Pacific copra at a price equal to about £6O, in London. She can sell it immediately in London—and doubtless does so sell some of it—for £lOO per ton.
The foregoing outlines the general position in the South Pacific. If we take the Territories individually, we find that, in addition to the anomaly (to give it the mildest term) of the MOP price, the planters are suffering also under other grievances peculiar to their region.
New Guinea Planters Again Approach Minister
AS this is written, a deputation re presenting the Planters Association of New Guinea is seeking an inter view with the Australian Minister for Territories, Mr. Spender. It wishes to place before him the following matters: • The injustice of the MOF contract price (described above). • The continued sale by the Govern
ment instrumentality of New Guinea copra to Australian crushing mills at a price equal to the MOF contract, instead of at the world price. The NG planters quite properly ask why the Australian crushers should be subsidised to the ex tent of £3O or £4O per ton, while the New Guinea producers of the copra, when pur chasing their essential requirements from
Australia, are not allowed to enjoy any of the subsidies, etc., on Australian food stuffs. The NG planters are obliged to pay world prices for their requirements, yet are forced to sell their principal product to Australian consumers at about one-third less than world values. The Australian Minister has acknowledged that this is unfair; but, as far ds is known, nothing has been done about it. • The inadequacy of the proposed dis tribution from the profits of the Produc tion Control Board. The PCB, through handling NG produce, has made a profit of about £250,000. It is proposed to dis tribute this to planters by adding 25/- per ton to the MOF price to be paid for copra, in the coming year. If the copra pro duction in PNG is 60,000 tons, that dis tribution will not get rid of half the accumulated profit. The planters argue that they should have an addition of £2 per ton, at least. • Although the Stabilisation Fund now is in the vicinity of £1,000,000, nothing has yet been done to give planters representation in the control of the Fund, and in the decision as to whether there still is to be a ‘stabilisation fund” deduc tion from payments to planters. • Although the Titles Replacement Ordinance has been drafted, and has been in the possession of the Department since October, nothing tangible has been done to hurry on with the issue to landholders of titles to replace those lost during the invasion. The absence of these titles is the cause of several cases of extreme hardship among landholders, who have been prevented from making financial arrangements for the development of their properties. It is claimed that one effect is seen in the almost total cessation of all new coconut planting.
Fiji Planters and Devaluation of
Sterling
FIJI planters now are in receipt of the new price arranged under the MOF contract for 1951 —namely: £53.15 Stg. less Fiji Copra Board charges which gives them about £53.5 Fijian per ton at Suva.
It will be remembered that the Fiji Government proposed to take £2 per ton out of this higher rate, by way of an export tax; and sought to justify this by saying it would correspondingly reduce Customs duties on essential goods, so that the whole community would enjoy a re duced cost of living as a result of the higher receipts from copra.
The planters rebelled, however. They pointed out that already they were being compelled to pay a substantial income tax; that the rates they were receiving from the MOF contract for copra were, partly as the result of the devaluation of Sterling, far below world parity; and that it very doubtful whether the Fiji community would get the slightest benefit from the proposed reduction of Customs duties.
Certainly, the planting communities — mostly isolated —would get no benefit.
When the rebellion was reflected in the Legislative Council, (where the native Fijian members insisted that this was a new law, affecting the native peoples, concerning which the Fijian chiefs should first have been consulted), the Governor reluctantly withdrew the proposed taxa tion ordinance; but indicated that it would be again submitted, at the next Council meeting.
It is believed in Fiji, however, that the attempt to impose this copra tax will be abandoned.
Meanwhile, Fiji planters have been dis cussing with Papua-New Guinea planters some plan of protesting against the low MOF price, resulting from the devalua tion of Sterling after the contract was made.
IF the Papua-New Guinea and the Fiji planters have grievances, what can be said of the situation in the Gilbert and Ellice Islands Colony? There, the Government — • Pays the growers for their copra at the rates set out in the MOP contract (wnich, as explained elsewhere, are from £3O to £4O per ton below world parity). • Imposes a copra export tax of no less than 25 per cent, of the gross FOB value. On the £53/15/- Stg. per ton (which is the MOF contract price as paid in the G & E Colony) the export tax is no less than £l3/8/9 Stg. per ton (about £l6/15/- Australian). • Imposes income taxation on any profits the growers may have left, after that.
The G & E grower should be getting about £lOO Stg, FOB, for his copra. After his Government is finished with him (in other words, after he has been robbed under the Sterling devaluation racket, forced to pay export tax, and then mulcted for income tax), he probably does not get one third of that.
Since World War 11, the British Socialist Government (through the High Commission for the Western Pacific) has d»ne its best to squeeze private enterprise out of the Gilbert and Ellice Islands Colony and the Solomon Islands Pro tectorate, and to run those Territories for the natives on some sort of partriarchal system of its own.
Except in Washington and Panning Islands, there are few —if any—European planters and traders in the G & E Colony.
Burns Philp and Co., and W. R. Car penter and Co., as well as several small private concerns, operated there until 1942. They were very definitely not en couraged to return after the war.
The Administration, instead, assisted the natives to establish native co operative societies (Tangitangs) for the production and marketing of copra and the import and distribution of goods.
The way in which these native peoples are treated, as shown above, provides a good example of what Socialism means.
They would be better off under the pre war system of private enterprise.
The only place where private enter prise survives in the G & E Colony is in the Washington and Panning atolls, far to the east of the main archipelago.
For a very long time, Washington, Fanning and Christmas atolls were un inhabited, and ignored. Then they were planted up with coconuts, and became really valuable after World War I, and became an administrative district of G. & E Colony. They passed through the hands of various owners; but, finally, Washington and Fanning were acquired by Sydney interests and Christmas (one of the gems in the Abbe Rougier con stellation) was taken over after the war from Rougier interests by the Western Pacific Commission itself.