British Mof Price Of Copra

Minister Dugdale’s Reply to BSI Producers’ Representations

WHEN the Rt. Hon. John Dug dale, British Minister for Colonial Affairs, was in Sydney early in September, after visiting Fiji, Tonga and the Solomons, and hearing urgent representations from planters everywhere on the subject of the MOF copra contract price, the PIM tried to interview him, to ascertain his real reaction —if any—to the planters’ pleas.

Owing to a dislocation of plane services, the Minister had only a few hours in Sydney—and in that period he was nursing an attack of malaria. He arrived in Sydney from BSI and New Guinea on Sept. 7 and departed for London next day and gave no Press interviews.

However, some indication of the Minister’s views is found in a re port (supplied by our Honiara cor respondent) of a meeting between the Solomon Islands planters and the Minister, on August 22.

There does not seem to be any likelihood of the copra price being revised in the light of the Socialist Government’s trick of devaluing Sterling after the MOF contract was made; but there is a chance that the price will be raised to meet the fact that in the second year of the contract the price was raised only 10/- per ton, instead of by 10 per cent.

THE Chairman of the BSI Copra Board pointed out that in 1946, when the postwar short age of oils and fats was greatest, the BSI Government pledged itself to send all its annual production of copra to Britain. In 1948, the Min istry of Food offered alternative contracts —a higher initial price for 1949, but with no great security for the years beyond 1951; or the 9-years’ contract, under which the initial price for 1949 was fixed at a lower level, and annual increases or decreases thereon pegged to a maximum of 10 per cent., either way. Some larger producers op posed both; but the view was taken

that, having regard to the earlier pledge, one or other must be ac cepted. The general opinion of a meeting of copra producers in 1948 favoured the long-term agreement.

From 1949, copra was shipped under the MOF contract at £stg4B, f.o.b. main ports. At the beginning of 1950, a small price rise was offered and accepted. For 1951, the maximum increase of 10 per cent, was arranged.

There was, however, no actual contract signed between the BSI Copra Board and the Ministry of Food in 1948; and only in 1951 was the actual contract presented for signature. The Board, after long and controversial discussion, con sented to the signature of this con tract.

Since 1948. however, the revalua tion of Sterling, and the unprece dented heights to which consumer goods had risen, had seriously affected production costs. The MOF price of copra had not kept pace with prices generally due to the fact that the MOF price could not rise more than 10 per cent, in a year.

Because of this, and because they were bound to Sterling (which had been devalued after the contract was first made) the planters felt they had been trapped into dis posing of their copra at a price well below world parity, while their profit margins were narrowed with increasing rapidity by production costs rising far more rapidly than the annual rise in copra prices under the contract.

The purchasing power of a ton of copra in world markets was be ing artificially restricted, while there was no such restriction on the rise in costs of production.

The Board wanted to know whether the Ministry of Food would enter into negotiations with a view to amending the contract for the remaining six years of its term, arriving at a price for 1952 more commensurate with world parity.

The chairman added that the de valuation of the £stg had played a major part in restricting the effec tive annual price rise, though in 1949 producers had been repeatedly assured that there would be no de valuation.

Private producers pointed out to thp Minister that all non-Govern ment members did not agree to the signature of the contract. The majority of those who agreed were Government members of the Board.

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THE Minister said that, taking the 1937 copra price as a basis, and on figures put before him, production costs were three times those of 1937, whereas the Ministry of Food price was 41 times that re ceived on the open market in 1937.

The planters pointed out that in 1937 copra had not fully recovered from the depression, and the price then payable was so low that it was not considered sufficient to allow for capital expenditure on planta tions, such as replanting and re building. They added that even the 1951 price, under the MOF con tract, did not show a sufficient per centage on capital expenditure to allow for replanting, even for larger firms who wished to rejuvenate their plantations.

The Minister then said that he would like to have both prewar and postwar figures, showing returns of production, expenses and profits.

He pointed out that if the copra price had fallen, producers would have been glad to have had the security of the contract.

A member of the Board quoted the British contract for New Zea land butter, which was not fulfilled, the butter producers being left high and dry.

The Minister again referred to the 1937 copra price and stated that, taking the uncontrolled in conjunction with the controlled prices to-day, it seemed to him that the MOF contract gave a greater margin of profit as against rising prices. Any comparative pre-war and postwar figures of profit and loss must also include figures for native producers.

The Minister said the strongest point in the producers’ case seemed to be that while in 1951 they had had the full 10 per cent, rise per missible under the contract, they had not had it in 1949-50. He was prepared to take this up in the United Kingdom. Any representa tions would have more hope of suc cess if they fell within the terms of the Agreement.

Editorial Comment

THE outstanding feature of this Minister’s comments on the copra producers’ representa tions —when he could be induced to make any—is his obvious un willingness to say anything about the trickery of the British Socialist Government in devaluing Sterling, after having made long-term con tracts with copra producers, and various other foodstuffs producers.

These foodstuffs have a world value—not a value confined to the Sterling areas. At any time dur ing the past two years, South Pacific copra could have been sold at from £3O to £5O per ton ( £3O being the amount, in relation to gold or dol

lars, by which Sterling was de valued) more in non-Sterling areas and some Sterling areas, than was received under the MOP contract.

Generally speaking, the Right Hon. John Dugdale has made a poor impression in the British Territories of the South Pacific — and that is not surprising. He is typical of the politicians who, in 1945-51, have more or less given the Empire away, and brought the good name of British officialdom into dis repute.

South Pacific copra-growers should keep their powder dry. and not lose heart. There is probability of an early election in Britain; and if more responsible people are

put into office there they will re move from these food contracts the blatant dishonesty represented by the devaluation of Sterling in 1949.

Patrol Officer Graham Taylor has taken charge of the new patrol post established by the New Guinea Administration at Annanberg, in the Ramu Valley, inland towards the Highlands from Madang. A new airstrip has been put down, and the Madang-Atemble road re-opened.

Thomas Farquhar, 19, pearler, of Thursday Island, was fined £lO for trespassing on Groote Eylandt native reserve. He said he went there to land petrol drums.

Mr. Bruce Bacon, who was two years in the Solomon Islands on the accounts staff of the BSI Trade Scheme, recently returned to Aus tralia. Last month, he joined the Sydney firm of William E. Reed.

Islands merchants, as agencies manager.

Mr. Mark Schultz, proprietor of the Mumeng Hotel, on the Lae-Wau road, New Guinea, has leased the ■establishment and left for Europe on a long holiday.

Rev. and Mrs. A. Wardman, ofi the Australian Board of Missions* staff, have gone to Papua to relieves Canon J. Benson (who is Mrs„ Wardman's uncle).

In this group are seen a number of the leading Chinese residents of Tahiti. The occasion was the wedding, on May 27, of Miss Yung Sin and Mr. King Chong Chung Soi. The bride is the daughter of Mr. and Mrs. Ching Sang, and the bridegroom is the son of Mr. and Mrs. Chung Soi.

The wedding took place at the Chineses Philanthropic Association; and, later, a[?] large number of guests assembled to par take of a feast of 40 different courses..

Feasting, music, dancing, etc,, extended! over many hours. —Photo by Studio MacKenzie.