Planters Should Bargain

With Uk Mof Direct

Written for PIM by a well-known S-W Pacific Planter

ALTHOUGH it has the power to socialise the Mother Country, does this give the somewhat wobbly Socialist Government of Great Britain any moral right to subject the other members of the British Commonwealth of Nations, or the Crown Colonies, to a compulsory subsidy of their own reckless experiments? [f the member nations got an adequate guid pro quo the case would be different, but, so far, the Home Government has shown a deep reluctance, if not actual hostility, to having the various overseas contracts thrashed out over the con ference table by fully accredited rep ’esentatives of the producers concerned.

The nine-year contract covering the )urchase by the British Ministry of Food )f copra produced in various quarters of he Pacific is a case in point.

When the contract was first advanced, he copra market was in chaotic condi ion. No one at that time seemed to know nth any certainty what world parity >rices were. Accordingly, the British tfOF’s offer of £4B stg. per ton was ac cepted by most of the countries to whom t was offered.

The position clarified very quickly, t soon became apparent that £4B per on was considerably below world parity.

Vhether the authority which offered this trice was aware of this fact at the time f making the offer is beside the point.

When the time arrived for the first an lual revision of the price provided for nder the contract the British Govern

ment had the temerity to offer one or two of the countries concerned a slightly lower price than that ruling for the pre ceding year. The Contract provided for an annual revision upwards or down wards of not more than ten per cent, in any one year. Whether the condition was ever expressly stated or not, copra growers generally were of the opinion that prices in subsequent years would bear some relationship to world parity. In any case, were world parity not to be regarded

as a guide for future adjustment why was any provision for future adjustment in cluded in the Contract?

When the Ceylon growers were offered in 1950 a slight reduction on the 1949 prices they decided to repudiate the con tract entirely and since then Ceylon has been selling on the open market. The Seychelles Islands also repudiated the Contract according to published reports.

An open market for copra exists at Singa pore also. (Continued on next page)

To overcome the feeling that had de veloped amongst planters generally that the British MOF was “taking them for a ride,” a suggestion was made that towards the end of each year of the contract rep resentatives of the British Government (MOF) and accredited representatives of the planters (not Governmental appoin tees), from the various producing areas of the Pacific, should meet in conference and agree upon a price for the ensuing year.

It is obvious that an impartial rep

resentation of the planters cannot be ex pected from Government officials meeting official representatives of the British Ministry of Food and fixing the price. In these negotiations, so far, the planter has had no say whatever.

If the yearly contract price of copra had been fixed in line with world parity prices from the original acceptance of the contract up to the present, the ten per cent, annual revision would have been applied in full each year to boost the price. As the Contract took effect first

in January, 1949, the increase (in Aus tralian currency) for 1950 would have been from £6O to £66, for 1951 from £66 to £72/12/-, or in Sterling from £4B tc £5B.

Even this increase would not have done justice to the copra producer. The original price of £4B Stg. was regarded as a stop-gap price to give a measure ol stability to a market which had been dis organised during the war and early post war years at a time when no open market appeared to exist. Had the con tract been fair and reasonable, it would have contained a proviso that as soon as a stable market had been achieved the price of copra would be revised in line with world parity. It is doubtful whether the Pacific planter at the latter part of 1948 would have been at all eager to enter into the contract had he been informed of the true price of copra on the world’s markets.

IN the latter part of 1949 came the de valuation of sterling. Pacific planters were astounded to learn that it was not proposed to make any variation ir the price paid by the Ministry of Food as a result of this event. Copra, being s commodity in world wide demand, should have been re-valued under the contract with any variation in the pegged level of sterling. Had this been done, and the moral right of the planters to this ad justment cannot be questioned, th« £72/12/- (Aust.) or £5B (Stg.), represent ing the contract price from inception plus annual increments of ten per cent., would now stand at £lOB/18/- Aust. oi £B7 Stg. Even this figure does not at pre sent represent full world parity for copra For any Government spokesman to ex claim that this price is too high woulo amount to sheer hypocrisy. No Govern ment has ever waived taxation on the ground that they were collecting too much During the depression years when th*j planters were taking the greatest bashinj of all time, no Government came to theij rescue with a subsidy.

Is it not the duty of a Government official representing the planters in nego tiations with the British Ministry of Food to regard himself as an agent and spokes man for the planters? If he is not pre pared to regard himself in this light, the planters should be advised beforehand of his intentions, so that they can insist on proper and impartial representations be ing made on their behalf.

What copra producer in the Pacific has ever sighted the MOF contract? None to my knowledge. In the Solomon Islands Protectorate the planters refused to ac cept the contract. Nevertheless, the BSIP Government have commandeered the copra produced and carried on the shipment of copra to the British MOP as if the planters had formally approved and accepted the nine-years agreement. The BSIP Government called the planters to gether on two occasions and offered the contract to them for acceptance. The planters refused to accept same. If they had no choice (and apparently the BSIP Government —as proven by their actions since then —gave them no choice) why the farce of asking for their approval?

The planters must insist upon all the sards being placed on the table and nego tiations carried out between their own sleeted representatives and the represen tatives of the British Ministry of Food, without benefit of official interference by Colonial Governments or by the Aus tralian Federal Government.

Failing this, the planters should take control of the sale of their product out 3f the hands of the Governments con cerned entirely and attend to the sale n the open market of their own pro iuction. Many firms would be pleased to jrovide the marketing machinery on a commission basis or to purchase same mtright.