Historic, archived document Do not assume content reflects current scientific knowledge, policies, or practices. OL. m, No. 1 January 1939 JFomgn Sericulture * .... a jRe<tie<H> ef Lferel^rt and [frcvcU Issued Monthly by UNITED STATES DEPARTMENT OF AGRICULTURE FOREIGN AGRICULTURAL SERVICE WASHINGTON, D.C CONTENTS Page European Wheat Requirements and Policies 3 The Argentine Pear Industry 15 Soil Conservation in New South Wales, Australia 27 Argentine Grain Elevator Program 33 Recent Developments in Foreign Agricultural Policy 39 Artificial Fibers From Coal Contemplated in Germany 39 Turkey Establishes Office of Products of the Soil 39 Venezuela Contemplates Greater Encouragement to Agriculture ... 40 Northern Ireland Assists Flax Growers 41 Dominican Republic Regulates Rice Production and Trade 41 748285 EUROPEAN WHEAT REQUIREMENTS AND POLICIES .... By L. A. Wheel er* The reduction since the 2920 's in imports of wheat into European countries is the chief reason for the present marked discrepancy between world wheat-export supplies and wheat-import requirements. This situation has resulted largely from govern- mental policies pursued by the various importing countries. Since the factors that fostered these policies are not likely to change in the near future, world wheat production on the present acreage under normal weather conditions will probably continue to exceed requirements . Surplus wheat-proaucing countries of the world are raising more wheat than importing countries are willing to taKe. That is the essence of the worla wheat problem. Statistically, the position is something like this'. In the 1920 's, exporting countries, on an average, were producing around 750 million bushels of wheat for export. Importing countries, on an average, were pre- pared to take this much wheat, or more, at what would seem now to be fairly high prices. In the present crop year, wheat-exporting countries of the worla will pro- duce something over 900 million bushels of wheat for export; but in the meantime the requirements of importing countries have fallen to around 550 million bushels. In other words, while exporting countries have increased available supplies by 150 mil- lion bushels annually, in years of ordinary weather, world import requirements have fallen by at least 200 million bushels a year. The purpose of this discussion is to consider the situation with respect to the European portion of world wheat-import requirements and to examine in this con- nection the policies being pursued in European countries that affect the importation of wheat. Before doing this, it is desirable to have in mind just what part Europe plays in total world wheat-import requirements ana to consider briefly what the prospects are for increasing exports to the non-European wheat-deficit countries. ♦Chief, Foreign Agricultural Service. Adapted from an address delivered at a Conference on Marketing Agricul- tural Products, Winnipeg, Canada, December 13, 1938. 4 Foreign Agriculture Table 1. Net imports of wheat, including flour, by principal importers, averages 1923-24 to 1927-28 and 1932-33 to 1936-37 Importer Average 1923-24 tn 1Q27-2S Average 1,000 bushels 611,600 46,300 53,000 51,200 1,000 bushels 397,000 47 , 600 49,600 47,400 762, 100 541,600 a/ Calendar years 1925-1929 and 1932-1936. The Secretariat of the Wheat Advisory Committee and official sources. WORLD IMPORTING AREAS European countries have in the past accounted for approximately 8o percent of world import requirements for wheat. The basic reason for this situation lies in the fact that Western Europe has relatively greater resources for industry than for agri- culture. The industrialization of Western Europe and the development of steam trans- portation enabled that area to tap the lower-cost wheat-growing regions overseas. * Not only has Europe accounted for approximately 8o percent of world wheat- import requirements in the past; there is little prospect of other parts of the -world supplanting it in this respect. To support this view, it is necessary only to call attention to the situation in the other two parts of the world that in the past have been of some importance as importers of wheat. These are Latin America and t he Orient . In Latin America, the deficit wheat areas are found in the tropical and sub- tropical countries stretching from Mexico on the north to Brazil on the south, in- cluding the islands of the Caribbean. These countries account annually for imports of a little over 50 million bushels of wheat, including wheat in the form of flour, or about 10 percent of recent world import requirements. .By far the most important single importer is Brazil, which has been taking some 35 million bushels of wheat annually in recent years, chiefly from Argentina. It is possible, of course, that the import requirements of this particular area may increase somewhat in the future with a rise in the standard of living in this part of the world. It is just as possible, however, that wheat-import require- ments may decline because of increased domestic production fostered behind tariff walls. With respect to the latter possibility, it is of interest to note that many countries in this region, though lacking resources well adapted to wheat production, have nevertheless been encouraging an expansion of wheat production by imposing se- vere restrictions on imports of wheat and flour. At any rate, because of the pre- dominantly agricultural character of these countries, it is not reasonable to expect this part of the world to play, in the near future, anything like as important a part in the world wheat- import picture as industrial Europe has played in the past. The Orient, mainly China, Japan, and the Philippine Islands, constitutes the only other important wheat-deficit area outside of Europe. In the ig2o's, the Orient accounted for over 6 percent of world import requirements, with China much the most important wheat importer in this area. Japan, by expanding production to the level of its requirements, has practically disappeared as an importer of wheat. Chinese imports are much smaller now than formerly , partly because of the disturbed political conditions in the country. European Wneat Requirements 5 Even with a peaceful and stabilized situation in China, however, it is doubt- ful, to say the least, whether this country will ever become a really important regular importer of wheat. This doubt arises out of two fundamental considerations: (i) the central and southern parts of the country rely mainly on rice for the diet; I 2) North China is one of the great wheat -producing regions of the world, Deing ex- ceeded only by the Soviet Union and the United States. There is no evidence of a significant shift from rice to wheat in the Chinese diet; and, so far as can be seen, wheat production is more likely to be expanded than contracted. The Philippines continue to import fairly substantial amounts of flour, but this market is not likely to expand materially in the future. In addition to these countries, India occasion- ally, as in the present season, imports considerable wheat. In other years, however, it is a substantial exporter. Taking all this into account, it is difficult to escape the conclusion that the Orient cannot be depended upon to expand wheat imports sufficiently to contribute significantly to a solution of the lack of balance between world export supplies and world import requirements. There remains, then, only Europe to be considered as a market for the world's surplus wheat. And in this consideration, it must not be forgotten that two of the important wheat surplus areas of the world, the Danube Basin and the Ukraine, are adjacent to the European deficit areas. Table 2. Net imports of wneat, including flour, by European countries, averages 1923-24 to 1927-28 and 1932-33 to 1936-37 Countries Average Average 1923-24 to 1927-28 1932-33 to 1936-37 1,000 bushels 1,000 bushels 228,800 224 , 400 69,600 8,400 80,200 18,500 52 , 900 10,000 75 , 900 74,400 Austria, Czechoslovakia, and Switzerland.. 53,700 29,200 Norway, Sweden, Estonia, Finland, and Latvia 22,900 12.700 25,900 17,400 1,700 2,000 611,600 397 , 000 The Secretariat of the Wheat Advisory Committee. EUROPEAN REQUIREMENTS In considering European wheat requirements and policies, it is necessary to examine the situation in the more important countries. Before doing so, however, it will be well to look at Europe as a whole, excluding for this purpose the Soviet Union. The 22 deficit wheat countries of Europe imported during the 1920 's an aver- age of 610 million bushels of wheat annually. In recent years, these countries have been importing around uoo million bushels, a reduction of over 200 million bushels, or about one-third. In the earlier period, the European surplus producers, excluding the Soviet Union, supplied the rest of Europe with about 30 million bushels annually; in recent years they have been supplying over uo million bushels a year. Therefore, net European requirements for the wheat of non-European exporting countries and the Soviet Union now amount to only about 360 million bushels against about 580 million bushels in the 1920 '3. 6 What have been the reasons for this decline in European wheat requirements? Has it been due to larger production or to smaller consumption? What part have trade barriers and other forms of governmental intervention played in this decline? In order to give significant answers to these questions, it is necessary to examine the situation country by country. It is proposed to consider in this way the United Kingdom, Italy, Germany, France, and several groups of the smaller European wheat importers. United Kingdom The United Kingdom is by far the leading wheat-importing country of the world. It accounts for a little less than 40 percent of total world import requirements, and a little more than half of total European requirements, at the present time. It has for many years been importing, on an average, a little over 200 million bushels annually - a few million bushels a year less now than in the 1920's, in spite of the fact that there are more mouths to feed. In the United Kingdom, therefore, though import requirements have declined only slightly, the demand for imported wheat has not expanded with the increase in population. Table 3. Acreage, production, yield per acre, net imports, and apparent consumption of wheat in the United Kingdom, averages 1923-24 to 1927-28 and 1932-33 to 1936-37 Years Acreage Produc- tion Yield per acre Net imports a/ Apparent consumption Percentage production is of consumption 1,000 1,000 1,000 1,000 acres bushel s Bushel s bushel s b u sh e 1 s Percent Average: 1923-24 to 1927-28 1,664 54,395 32.7 208 ,978 263,373 20.7 1932-33 to 1936-37 1,728 59,300 34. 3 207 ,522 266,822 22.2 a/ August-July marketing years. Flour Included. The Secretariat of the Wheat Advisory Committee and official sources. Up to 1932, the United Kingdom imported wheat free of duty from whatever source. In that year, as a part of Empire preference, it placed a duty equivalent to 6 cents a bushel on wheat from non-Empire sources. It is' not likely that this relatively small duty had any measurable effect on United Kingdom wheat consumption. At any rate, the duty has now been removed as a result of the recently completed trade agreement with the United States. We must look elsewhere, therefore, for the real explanation of the failure of British wheat imports to expand; and we shall find this explanation in the scheme for aiding the home producer. This scheme and its actual operation are briefly described below. In 1932, the United Kingdom Government passed the Wheat Marketing Act, which provides, in essence, a guaranteed price to producers on a specified production of wheat. Funds for making up the difference between what the grower receives on the market and the guaranteed price are obtained from a tax on all flour milled in the United Kingdom, from either domestic or imported wheat. When the scheme went into effect in 1932, the guaranteed price was equiva- lent to around $1.30 per bushel and the quantity on which this price was guaranteed was 50 million bushels. In the 5 years immediately preceding 1932, the average British crop was n7 million bushels. European Wheat Requirements 7 The guaranteed price has not been changed. But - and this is significant - the quantity of home, product ion on which this price is guaranteed was increased in July 1937 to 67 million bushels, a figure 43 percent higher than the average produc- tion in years immediately preceding the inauguration of the scheme. Actual production of wheat in the United Kingdom during the years from 1933 to 1937 averaged 62 million bushels, or about one-third higher than the average pro- duction just before the scheme was inaugurated ( 1927-1931) • Up to the present time, this increase in nome production has not caused any serious reduction in British wheat imports. Whether these will be affected in the future will depend largely on Government policy as to the quantity of production that will be subsidized; although it is obvious, in view of total agricultural resources in relation to population, that a very large proportion of British requirements for wheat will necessarily con- tinue to be imported. Italy Italy was formerly the largest importer of wheat in continental Europe. Net imports of wheat averaged about 80 million bushels annually from 1923-24 to 1927-28. In the 5 years ended with July 1937 they averaged only 18 million bushels, a decline of 78 percent. Table 4. Acreage, production, yield per acre, net imports, and apparent consumption of wheat in Italy, averages 1923-24 to 1927-28 and 1932-33 to 1936-37 Years Acreage Produc- tion Yield per acre Net imports Apparent consumption Percen. ge produc tion is of consumption 1,000 1,000 1,000 1,000 acres bushel s Bushel s bushel s bushel s Percent Average: 1923-24 to 1927-28 11,769 210,456 17.9 80,200 290,656 72.4 1932-33 to 1936-37 12,421 263,173 21.2 18,500 281,673 93.4 a/ August-July marketing years. Flour Included. The Secretariat of the Wheat Advisory Committee and official sources. The decline in Italian wheat requirements has been due both to increased do- mestic production and to decreased total consumption. In the first place, it may be noted that the wheat -producing area of Italy was increased only about 5 percent - a little more than a half million acres - between 1926 and 1936. On the other hand, average production increased from around 210 million bush- els in the 5 years ended Viith 1927 to 263 million bushels in recent years (1932- 1936), an increase of 25 percent. There has been, therefore, a marked rise in the average yield per acre. Incidentally, the Italian farmer has been given a real incentive to maintain or expand wheat production in the form of a guaranteed price amounting in 1938 to the equivalent of about $2.00 per bushel. So far as production is concerned, therefore, it appears that Italy has won the "Battle of Wheat" in years of average or better-than-average weather conditions. In years when weather conditions are unfavorable, Italy will have to depend to a substantial extent upon imports of wheat, either from Danubian countries or, if sup- plies are not available there, from overseas exporting countries. 8 Foreign Agriculture Another, and apparently more important , factor in the decline in Italian wheat imports lies on the side of consumption.. In recent years Italy has pursued a policy of compulsory mixing of substitute flours and meal with wheat flour. For instance, at present it is required that wheat flour be mixed with corn meal to the extent of 10 percent. It appears, as a result of these and other Government policies affect- ing the quality and price of wheat products, that Italian wheat consumption, on a per-capita basis, has declined by about 10 percent in the past 10 years. Even if an abandonment or relaxation of the policies that have led to reduced consumption were to take place, it is not likely that there would be any material change in the policy directed toward increased wheat production. Consequently, it is impossible to count upon Italy's becoming a customer for overseas wheat on the former scale. Germany Germany was formerly the second largest wheat-importing country in continen- tal Europe. Net wheat imports averaged about 70 million bushels annually during the twenties. In the 5 years ended with July 1937, they averaged 8 million bushels, a decline of 89 percent. During the past year, German production of wheat and rye together was sufficient for total requirements, although some wheat was imported, partly for special needs and partly for addition to stocks. ^ Table 5. Acreage, production, yield per acre, net imports, and apparent consumption of wheat in Germany, averages 1923-24 to 1927-28 and 1932-33 to 1936-37 Years Acreage Produc- tion Yield per ac re Net imports a/ Apparent consumption Percentage production is of consump tion 1,000 1,000 1,000 1,000 acres bushel s Bushel s bushel s bushel s Percent Average: ^/ 1923-24 to 1927-28 3,878 105,962 27.3 69,600 175,562 60.4 1932-33 to 1936-37 5,429 178,089 32.8 8,400 186,489 95.5 a./ August-July marketing years. Flour included. b/ It should be ncted that orriclal acreage and production figures for the two periods are not exactly compa- rable because of changes In boundaries and statistical methods. The Secretariat of the Wheat Advisory Committee and official sources. The explanation of the decline in German requirements for wheat is to be found both in increased production and in reduced consumption. On the production side, it is noteworthy that the wheat acreage of the country increased from about 4 million acres in 1926 to over 5 million acres in 1936. Appar- ently a good deal of this increase was at the expense of feed grains, such as oats, the acreage of which declined. Wheat production increased from an average of 106 million bushels in the 5 years ended with 1927 to 178 million bushels in the 5 years ended with 1936, while the 1938 crop is estimated at nearly 200 million bushels. 21 It should be understood that these remarks as to German requirements apply to the situation before the ab- sorption of Austria and Sudetenland. Their Inclusion within the German Customs Union adds to German require- ments, since they are both wheat-deficit areas; but It does not, of course, add to total European requirements. European Wheat Requirements 9 As in Italy, farmers in Germany have been encouraged to grow more wheat by the establishment of favorable guaranteed prices. In 1938, the German farmer was assured a price equivalent to more than $2.00 per bushel. On the side of consumption, t"he most important thing to note is that rye has always been an important alternative breadstuff in Germany. Furthermore, Germany has been historically a surplus producer of rye. Consequently, under a regime such as now exists in the country, it is quite feasible fpr the Government to bring about a shift to larger consumption of rye for human food. This has been done through re- quirements as to the mixing of rye flour and wheat flour. The admixture of corn meal and potato flour has also been employed to conserve bread grain. Another important aspect of the German situation that should be mentioned at this point relates to the increasingly close economic ties between Germany and the countries of the Danube Basin. The latter, as has been pointed out, constitute the surplus wheat -producing region of Europe. There has already been a definite tendency in the direction of encouragement by the German Government of increased production in that region of foodstuffs and raw materials for the German market. The situation with respect to the German wheat market may therefore be summa- rized somewhat as follows. In years when growing conditions are reasonably good, Germany can now produce the great bulk, if not all, of its requirements for bread grain, especially when account is taken of the possibility of requiring the substi- tution of rye for wheat. In years when weather conditions are not favorable, Germany will usually be able to make up wheat requirements through importation from the sur- plus producers in the Danube Basin or, perhaps, from Poland. It may be concluded, therefore, that the prospects of Germany's returning to the position it occupied during the 1920's as an importer of wheat from overseas^ countries are not at all bright. Probably the best that could reasonably be expected is that Germany would be willing to take - subject, of course, to fluctuations in domestic and Danubian supplies - a relatively small amount of high-quality overseas wheat for mixing purposes. France France is one of the largest wheat -producing countries in the world. Because of this fact, it has never been possible for overseas exporting countries to look upon France as an assured, regular outlet for substantial quantities of wheat. In pre-war years, France occasionally imported large amounts of wheat in seasons when weather conditions in that country were bad; but in some years it had small surpluses because of unusually good growing conditions. In the decade of the twenties, French wheat production averaged less than before the war; but in the latter half of this period production approached pre-war levels. During the 5 years ended with July 1928, net imports of wheat into France averaged abcut 53 million bushels a year. From 1932 to 1937, French net imports averaged 10 million bushels, and in the 1934-35 season exports considerably exceeded imports . The historic policy of the French Government with respect to wheat has been to maintain sufficient protection against imports to assure remunerative prices to the French producer. In recent years, with occasional substantial export surpluses, it has not been possible to maintain prices through the relatively simple method of restricting imports. Consequently, the French Government has taken over marketing LO Foreign Agriculture of wheat as a Government monopoly. Foreign trade in wheat is subject to direct governmental control, and French wheat producers are guaranteed a definite price, equivalent in the current season to an average of about $1.50 per bushel. So far as the future is concerned, it is not reasonable to anticipate a sub- stantial, regular outlet in France for overseas wheat. It is possible that French wheat acreage may decline. It is now about u million acres less than the pre-war average, although increased yields per acre have more than compensated for this re- duction. On the otner hand, the relatively high guaranteed price encourages farmers to maintain the acreage. In any case, it is not likely that France will want its wheat production significantly below domestic requirements. Table 6. Acreage, production, yield per acre, net imports, and apparent consumption of wheat in France, averages 1923-24 to 1927-28 and 1932-33 to 1936-37 Years Acreage Produc- tion Yield per acre Net imports a/ Apparent consumption Percentage production is of cons ump t i n 1,000 1,000 1,000 1, 000 acres bushel s Bushel s bushel s busnel s Percent Average: 1923-24 to 1927-28 13,440 278,997 20.8 52,900 331,897 84. 1 1932-33 to 1936-37 13,280 314,787 23.7 10 , 000 324 ,787 96.9 a/ August-July marketing years. Flour Included. The Secretariat of the Wheat Advisory Committee and official sources. Italy, Germany, and France together account for about 80 percent of the drop of 200 million bushels or more in European requirements. In none of them is there any reason to expect a substantial increase in wheat requirements except in years when weather conditions are extremely unfavorable; in other words, it is not pos- sible to count upon them in the future, as in the 1920*5, as regular customers for substantial quantities of wheat. Minor Importers So far as the minor European wheat-deficit countries are concerned (that is, excluding the United Kingdom, Italy, Germany, and France), it may be stated in gen- eral that each of them has been restricting imports of wheat and encouraging domes- tic production. The result has been that the requirements of these minor deficit European countries, taken as a group, have declined something like 45 or 50 mil- lion bushels a year. The smallest decline in imports has occurred in the Low Countries,, that is, Belgium, the Netherlands, and Denmark. It appears that in recent years these coun- tries have been supplying 37 percent of their requirements by domestic production, compared with 27 percent in the 1920's. In terms of iuantity, the decline in net imports has been around 1.5 million bushels a year. In northern Europe, that is, the Scandinavian Peninsula and the Baltic States (excluding Lithuania from the lat- ter, which is a surplus wheat producer) there has been a decline of about 10 million bushels a year in total net wheat imports. Domestic production in these countries is now supplying about 75 percent of wheat requirements, compared with 41 percent in the i920's. European Wheat Requirements 11 Even before the transfer of the Sudeten territory to Germany, Czechoslovakia had become virtually self-sufficient with respect to wheat, although it imported over 20 million bushels a "year during the 1920 's. With the loss of the Sudeten ter- ritory, which is predominantly industrial, it seems certain that Czechoslovakia will no longer be in the market for imported wheat. In fact it may, at least in years of favorable growLrg conditions, have a small surplus for export to Germany. In southern and southwestern Europe the deficit wheat producers are Portugal, Spain, and Greece. Even before the outbreak of the civil war in Spain, these coun- tries together had reduced their imports of wheat by approximately 8 . 5 million bushels a year, compared with imports in the iQ2o's. Because of increased wheat production, especially in Portugal and Greece, they have recently supplied 92 percent of their total requirements against 87 perce rt in the i920's. Considered as a group, there is probably a better prospect for restoring lost markets in these minor European countries than in the larger ones previously dis- cussed. At any rate, it is altogether possible that some of them at least, such as Belgium, the Netherlands, and the Scandinavian countries, may become just as impor- tant as importers of wheat in the future as they ever were in the past. This will depend, of course, primarily upon whether these countries are able to find markets for their own agricultural and industrial surpluses. But-even if these countries should return to their former position, which is surely the best that could be hoped for in the next few years, there would still be a great diminution in European re- quirements for overseas wheat. Table 7. Acreage, production, yield per acre, net imports, and apparent consumption of wheat in minor European countries, averages 1923-24 to 1927-28 and 1932-33 to 1936-37 Country and years Acreage Produc- tion Yield per ac re Net imports a/ App ar en t consumption Percentage production is of consumption 1,000 1,000 1,000 1,000 acres bushel s Bushel s bushel s bushels Percent Belgium, Denmark, and Netherlands - 1923-24 to 1927-28 713 28,109 39.4 75,900 104,009 27.0 1932-33 to 1936-37 1,025 43,687 42.6 74,400 118,087 37.0 Austria, Czechoslovakia, and Switzerland - 1923-24 to 1927-28 2,246 56,352 25. 1 53,700 110,052 51.2 1932-33 to 1936-37 2,996 77,875 26.0 29 , 200 107,075 72.7 Norway, Sweden, Finland, Estonia, and Latvia - 1923-24 to 1927-28.... 635 15,936 25. 1 22,900 38,836 41 .0 1932-33 to 1936-37 1,351 38,214 28.3 12,700 50,914 75. 1 Greece, Portugal, and Spain - 1923-24 to 1927-28 12,873 168,451 13.1 25,900 194,351 86.7 1932-33 to 1936-37 14,382 200,173 13.9 17,400 217,573 92.0 a/ August-July marketing years. Flour Included. The Secretariat of the *eat Advisory Committee and official sources. L2 Foreign Agriculture FACTORS AFFECTING EUROPEAN POLICIES These are the hard facts of the situation. It is clear that European wheat requirements have shown a marked decline. It also seems clear that this has been due mainly to governmental policy directed toward stimulating home production and restricting consumption and imports. It is important, therefore, to get some idea as to the motives back of these governmental policies. There are, it would seem, three principal explanations of these policies: (l) the desire to maintain returns to domestic producers at times when world prices have been extraordinarily low and, in this connection, to maintain as large a popu- lation as possible on the land; (2) the necessity, from the standpoint of balances of international payments in the individual countries, for a reduction in imports at a time when exports were falling; and (3) the desire for larger production from a mili- tary point of view. These three motives have played a greater or smaller part in determining the policies of individual countries. They have probably each played some part in each count ry . Assuming that these have been the principal factors underlying governmental policies that have led to restrictions on wheat imports and in many cases reductions in consumption, it becomes important to cane to some conclusion 21s to whether these factors are likely to continue to operate in the future. It is, in fact, largely on the basis of our conclusion with respect to this point that we must come to our gen- eral conclusion in regard to the future of European import requirements for overseas wheat . • Taking first the factor of maintaining prices to domestic producers, there would appear to be no logical reason for thinking that this factor will not continue to operate just as forcibly in the future as it has operated in the past. Govern- ments of the deficit European wheat-producing countries will undoubtedly be just as anxious to maintain prices to their producers as they have always been. This does not mean, of course, that wheat imports need to be entirely excluded in order to ac- complish this purpose. What it does mean is that, when world prices are extremely low (and world prices are determined by the relation between wcrld supplies and world demand), it may be expected that virtually all of the European deficit wheat- producing countries will maintain restrictions on imports in the form either of high tariffs or of quotas or mixing regulations, the effect of which will be to insulate the domestic producer from the impact of these low world prices. On the other hand, when world prices are relatively high, as they were during 1936 and 1 937 for instance, largely because of extremely short crops in North America, it is to be expected that import restrictions will be materially lessened in some of the wheat-importing countries. That is what actually happened in 1936 and 1937; but restrictions shot up again in 1938 with the fall in world prices. As to the second factor determining governmental policy, namely, the balances of in ternatiaial payments of individual countries, about all that can be said is that, if wheat-importing countries are successful in regaining and expanding their outlets for industrial and certain specialty agricultural products, they will be in a stronger position to import wheat and will be more inclined to reduce their own restrictions on wheat imports than they otherwise would be. On the other hand, it may be argued that, in view of the current rearmament race, increased foreign ex- change resulting from larger exports may be used for purchases other than wheat. A forecast on this point is extremely difficult. There are influences at work in the direction of more liberal trade policies, as is evidenced by the commercial policies European Wheat Requirements 13 of Canada and the United States. But this is not by any means a universal tendency. Probably the best that can be said now is that, so far as the next few years are concerned, it does not seem likely that the major continental European wheat-importing countries will be able to increase their exports in relation to their imports suf- ficiently to provide a sound and lasting basis for a resumption of imports of over- seas wheat. It is the third factor in the situation with which the wheat-exporting coun- tries have to be mainly concerned. This is the factor of military considerations as an explanation of restrictive wheat-import policies. It appears at this par- ticular moment that these considerations are very much in the forefront, and it is impossible to say when they will recede into the background as a factor influencing governmental policy. It can be said with assurance, however, that until these con- siderations do become less important there is very little prospect indeed for a suf- ficient relaxation in governmental policies influencing the importation of wheat to bring about a marked revival in the demand for overseas wheat on the part of some of the most important potential European wheat-importing countries. CONCLUSION The situation with regard to European wheat requirements, therefore, seems to boil down, to this. Wheat imports of the United Kingdom, the world's greatest im- porter, have declined only slightly in the last 10 years but such increase as may have occurred in wheat consumption has been supplied by larger domestic production. Wheat requirements of Italy and Germany, formerly the great wheat deficit countries of continental Europe, have declined by something like 150 million bushels in the course of the last decade, and there is little likelihood of any considerable part of these imports being restored in the near future. France has not been, histori- cally speaking, an important regular importer of wheat, and it is likely to be less important in the future than it has been in the past. Import requirements of other European countries have declined considerably, but they might return to their former high level if these countries could secure larger outlets for their own industrial and agricultural products. In general, the reduction in wheat imports in the varicus European countries has been due to expansion in production and reduction in consumption, influenced directly by governmental policies. Moreover, in their determination to keep out wheat imports, European governments have not relied solely on the relatively simple instrument of the tariff but have employed such potent weapons as quantitative re- strictions, mixing regulations, and outright governmental import monopolies. The prospect for a modification of these policies sufficient, to bring about a decline in production and an increase in consumption is not good. Furthermore, it should be noted that the adverse effect of these policies on wheat imports has been reinforced by two other influences: first, the progress of agricultural technique, which has facilitated increased wheat production in im- porting countries; and, second, the slowing down of the growth of population, which is making large-scale wheat imports less pressing than during the nineteenth century when the population of Europe was increasing rapidly. The stationary or declining population in Western Europe, predicted in the near future by many authorities, makes the outlook even more gloomy for overseas exporting countries. On the basis of this picture of European wheat imports, it is concluded that exporting countries cannot count upon a return to the level of the 1920's in the European or in the world import requirements for wheat. 11 Foreign Agriculture If this is the correct picture of the situation, it is important to consider it with respect to available present and future surplus supplies of wheat in export- ing countries. That subject does not fall within the scope of the present discus- sion, but it may not be out of place to suggest that the present wheat acreage of exporting countries will in years of ordinary weather conditions, such as 1938, pro- duce at least 250 million bushels more than importing countries are prepared to take. With maintenance of acreage in exporting countries anywhere near the level of 1938, the only thing that could prevent excessive production would be such droughts over extensive areas as occurred in North America in the period from 1933 to 1937. 15 THE ARGENTINE PEAR INDUSTRY . . . . . . By Paul 0. Nyhus* The Argentine pear industry has undergone a rapid expansion during the past decade, but low prices in recent years have discouraged new plantings. Production already exceeds domestic needs, and it is expected to increase further as young trees come into full bearing. The future of the industry is dependent on the development of export outlets and adequate refrigeration and storage facilities. The Argentine pear -growing industry is located mainly in the Rio Negro Valley and in the Province of Meildoza. In both districts the fruit is grown under irriga- tion. The total 1938 crop is estimated at approximately 2,700,000 boxes of about w pounds each, net weight. It is believed that in another 10 years as new trees come into full bearing the crop will be several times that figure. With the development of badly needed precooling and refrigeration facilities, Argentina could rank in a few years among the world's most important exporters of fresh pears by shipping to markets in the Northern Hemisphere during th€ winter months of the year. Indicative of the rapidity with which new plantings have taken place during the past few years is the fact that the number of trees now under cul- tivation is placed at 3,300,000 compared with 2,600,000 in 1932. Most of the. pears grown in Argentina at the present time are of the Williams (Bartlett) variety.' In 1937, approximately 87 percent of the pears grown in the Rio Negro Valley and about the same proportion in the Province of Mendoza were of that variety. The Williams is an all-purpose pear, suitable for consumption in the fresh state, as well as for canning and drying. Because of relatively higher prices of certain other varieties, however, Argentine fruit growers in recent years have been shifting from Williams to those varieties. Argentine pear exports have increased rapidly, for production has expanded more rapidly than domestic consumption. Exports in 1937 amounted to 565,000 boxes, compared with only 14,000 bcxes in 1931- The United Kingdom, Brazil, France, the United States, and Sweden take the bulk of the exports. Figure 1 shows the approximate location of commercial pear-producing .regions. Because of inadequate data, no attempt has been made to indicate by shading the ac- tual density of plantings. The shaded portions include areas in which other decidu- ous fruits are commercially produced. ♦American Agricultural Attache, Buenos Aires, Argentina. Foreign Agriculture Argentine Pears 17 Argentine exporters enjoy a seasonal advantage in the sale of pears in foreign markets. Exports take place largely during the months cf January, February, and March, when supplies in most Northern Hemisphere countries are at low levels. The pears are graded into Extra Fancy and Fancy, and experts are permitted only on the basis of certificates issued by the Ministry of Agriculture. Since the steadily expanding production will have to be marketed chiefly in foreign countries, Argentine distributors are availing themselves of every opportu- nity to develop new and larger export outlets. Shipping and refrigeration facilities are being provided, and special attention is being devoted to obtaining concessions with respect to tariffs, quotas, and exchange regulations in trade agreements with foreign countries. PRINCIPAL FRUIT-GROWING DISTRICTS There are three fruit-growing regions of commercial importance in Argentina. One, a southern district, is located in the Rio Negro Valley west of Bahia Blanca; another is the western region centering in the Province of Mendcza about 300 miles west of Euenos Aires; and the third is the Delta region, located about 30 miles west of Euenos Aires. Statistics of the tonnage of pears moved by the railways provide fairly com- plete data relating to recent and current production, since local consumption in the sparsely populated producing districts is very small and movement by truck from pro- ducing regions to coastal markets is insignificant. Table 1. Freigfit loadings of Argentine pears, by regions, 1932-1938 Rio Negro Valley Mendoza Region Delta Region Year Quari ti ty Percen tage of total Quantity Percen tage of total Quanti ty Percentage of total Total 1 ,000 1,000 1,000 1,000 boxes Percen t boxes Percent boxes Percent boxes 1932. . . 202 45. 5 164 36.9 78 17.6 444 1933. . . 288 42.9 304 45.4 78 11.7 670 1934. . . 402 45.0 414 46.3 78 8.7 894 1935. . . 674 57.5 412 35. 1 87 7.4 1, 173 1936 . . . 1,002 58.9 583 34.3 117 6.8 1,702 1937. . . 1,616 79.6 332 16.4 81 4.0 2,029 1938 a/ . 2,001 74.2 610 22.6 87 3.2 2,698 In boxes of approximately 44 pounds each, net weight, a/ Estimated. Compiled from records of traffic department of the Southern Pacific and Western Railways. Rio Negro Valley The Rio Negro Valley is by far the most important pear-growing region in Argentina at the present time. Production on a commercial basis in that area dates back to the completion by the Government of the present irrigation system in 1921. The new irrigation facilities were preceded by two private systems consisting of moles built out into the midstream of the Rio Negro to divert part of the current into irrigation channels. Although these devices were quite inadequate, alfalfa was grown successfully and it was early discovered that deciduous fruit trees did excep- tionally well. 18 Foreign Agriculture Recognizing the precarious nature of the existing private irrigation systems, the Argentine Government in 1910 decided to replace them by a more permanent project under the control of the National Department of Public Works. After delays during the World War, the modern project was completed in 1921. The work was done for the account of the Government partly by the Department of Public Works and partly by the Buenos Aires Great Southern Railway Company at a total cost of about $1 3 , ooo, 000 . As each section of the irrigation system was completed, it was put into serv- ice. In addition to the main dam and about 75 miles of main canal, the present Rio .Negro irrigation system includes about 330 miles of distribution and drainage canals and 513 masonry works, including falls, bridges, regulators, and aqueducts, serving a total irrigable area of about 150,000 acres. Although Rio Negro apples and pears had won a reputation for themselves on the Buenos Aires market as early as 1928, they were still unable to compete success- fully with fruit imported from New Zealand and North America, owing to poor grading and packing. Since there were no packing and marketing services or agencies to de- velop prospective markets, the railway company serving the Rio Negro Valley, which had taken a leading part in the development of the valley, decided to establish a subsidiary company to provide such services. This subsidiary came into existence in 1928 under the name of the Argentine Fruit Distributors, Limited. The company built four American-type fruit-packing houses at strategic points along the railway line, and experienced fruit packers from California were engaged to manage them. A fifth packing house was later added and all the original sheds enlarged. Box factories equipped with automatic machinery were also constructed. The three principal sheds are equipped with six double classifying machines, capable of cleaning, grading, and packing 10,000 bushel boxes per day. Other buyers and ex- porters have added similar packing sheds and equipment. A census taken by the Argentine Fruit Distributors in December 1935 revealed that there were 2,011 fruit growers with a total of 69,300 acres in cultivation in the Ri'o Negro Valley irrigation project. Districts within the valley varied greatly with respect to the relative acreages in fruit trees, grapes, and ether crops; but for the entire valley 11,200 acres were planted to fruit trees, 17,300 acres to wine grapes, and 40,800 acres to otner crops. The relatively large acreage of other crops, chiefly alfalfa, will be noted. This is due to the fact that in some districts the soil is especially gravelly, and alfalfa and other crops prove more profitable than fruit trees. Because of relatively good yields, it is stated that the returns from wine grapes are better in the Rio Negro Valley than in the older grape districts of San Juan and Mendoza- Most cf the fruit trees in the Ri'o Negro Valley are pear and apple trees. A survey made a few years ago indicated the following distribution of trees: Pear 1,684,000; apple 756,000; peach 91,000; quince 39,000; plum 30,000; cherry 9.000; apricot 1,000; and other fruit trees 1,000. This makes a total of 2,611,000 trees. Here, as in the Mendoza area, pears do very well and are free from Fear Blight. Be- cause of relatively better prices for apples, more apple than pear trees have been set out in recent years. With respect to the land resources of the valley, it is estimated that 148,000 acres are capable of being irrigated by the present irrigation system. By an exten- sion of the main canal, a large additional acreage could be irrigated at the lower end of the valley, but there is no prospect that such an extension will be made in the near future. In contrast with the problem of an adequate supply of water pre- vailing in some of the irrigation districts in the western and northwestern Provinces 21 All conversions are raade at current selling rate for sight drafts an New York.. Argentine Pears 19 of the country, a liberal supply of water is available for irrigation in the Rio Negro Valley. Some of the acreage capable of being irrigated, however, needs drain- age facilities. Moreover, some of the land in the potentially irrigable district will be difficult to prepare for irrigation because of topographical conditions. In general, most of the more desirable land in the existing irrigation dis- trict is already in use. With present irrigation and drainage facilities, it may be difficult to add more than 20 or 30 percent to the present cultivated areas. By the displacement of alfalfa and other crops, however, the area devoted to fruit trees could be extended to many times the present area, should returns from fruit produc- tion warrant such expansion. The latter factor is already slowing up the rate of expansion. It is said that colonization and new plantings continue; but, at the present prices of Williams pears and prospective lower prices, combined with pre- vailing land prices, there is no longer the interest in buying land and planting orchards in the Ri'o Negro Valley that existed 5 years ago. Prices for new land and for old alfalfa land in the center of the Rio Negro fruit district vary from 900 to 1,500 pesos per hectare (from $100 to $170 per acre). In the lower part of the valley, land can be bought for 600 pesos per hectare ($67 per acre) and, in a Government colonization project in the district near Neuquen for 100 pesos per hectare ($44 per acre) in 10-hectare ( 25-acre) lots. The latter price, however, does not include possible assessment for the construction of canals. Prior to 1931, when prices paid for pears were relatively high, investments made in land and improvements were high in relation to present prices of pears. As a result, some growers are now experiencing financial difficulties. Many of the growers who developed properties in the Rio Negro Valley started out with little or no capital. That region, however, has attracted many foreigners with capital, some of whom came directly from England to take up fruit lands. Communities of English and other foreign nationalities are now found throughout the valley. The rapidity with which the commercial production of pears in the Ri'o Negro Valley has developed is indicated by the fact that in 1938 over 74 percent of all freight loadings of pears in Argentina were made there compared with only about 46 percent in 1932. Table 1 gives freight leadings of pears in the Rio Negro Valley and all other producing regions of the country from 1932 to 1938. Mendoza Area The second most important pear-growing regiOD in Argentina is in the Province of Mendoza. The Mendoza fruit-growing area, in general, comprises three rather ex- tensive irrigation districts - Mendoza, San Juan, and San Rafael, and two small districts - Tunuyan and Colonia Alvear. All of these districts are in the Province of Mendoza except San Juan. The latter district is in the Pr evince of San Juan and is relatively unimportant in pear production. Approximately 902,000 acres are under irrigation in the Mendoza region, and practically all the land capable of 'being ir- rigated with the present dams and irrigation facilities is cultivated. According to surveys made in 1925 by an English irrigation engineer employed expressly for the purpose by the rai lway .company serving that area, modifications and additions to the present irrigation system could be made that would add 684,000 acres to the present irrigated area. There is small probability, however, that such an expansion will take place within the next 10 or 15 years. The Mendoza region is primarily a grape-growing region, both for wine and for table varieties. Even in the San Rafael area, where fruit trees are relatively more important than in other districts, the area of 18,300 acres in fruit trees in 1937 was less than half of the area in grapes and less than 10 percent of the cultivated 20 Foreign Agriculture area of the district. The Colonia Alvear district, located southeast of San Rafael, has made poor progress apparently because of an excessive amount of alkaline salts m the soil. Plans have been advanced to provide drainage facilities as a means of correcting this condition. Colonization efforts and fruit plantings there will prob- ably make little headway until this has been accomplished. In the Tunuyah district, to the southwest of Mendoza, the frost hazard is considerable. A survey made by the traffic department of the Buencs Aires-Pacific Railway Company in 1936-37 shaved that the total area under cultivation in the Mendoza re- gion that year amounted to 840,000 acres. Of that area, approximately 36 percent was devoted to grapes and only 7 percent to various tree fruits. The actual distri- bution of land according to use during the 1936-37 crop year in the Mendoza region as given by the railway survey is shown in table 2. Table 2. Land utilization in the Mendoza fruit-growing region, 1936-37 Crop Palmira Mendoza San Juan San Rafael Total Acres Acres Acres Acres Acres 56 ,497 114,007 53,048 36,699 260,251 9,162 7,161 20,460 3,887 40,670 13,326 13,791 10,746 18,285 56, 148 Al fal fa 55,032 89,265 84,273 110,889 339,459 8,562 13,506 1,203 17,987 41,258 1,426 15,592 1,468 4,440 22,926 1. 179 1,322 6,615 1,823 10,939 1 ,727 5,812 665 2, 123 10,327 3,556 11,248 23,264 20,035 58, 103 150,467 271 ,704 201,742 216, 168 840,081 Traffic department, Buenos Aires-Paclf lc Railway Company. The last official census of the number of fruit trees in the Province of Mendoza was taken in 1932. That census indicated that pear trees represented about 33 percent of the total. Here, as in the Rio Negro Valley, additional fruit trees have been set out since 1932, but the expansion has been moderate compared with that which has taken place in the Rio Negro district. High prices for apples have stimu- lated larger new plantings of apples than of pears. The San Rafael district was the most important producing center for tree fruits in the Province. Table 3 gives the total number of fruit trees in the San Rafael district and in all of Mendoza during ] 932- Table 3. Number of fruit trees in Mendoza Province, 1932 Kind San Rafael district Other districts Total Number N umb e r Number 359 , 000 570,000 929,000 286,000 630,000 916,000 90,000 330,000 420,000 129,000 128,000 257,000 29,000 84,000 113,000 40,000 22,000 62,000 17,000 60,000 77,000 Total 950 ,000 1,824,000 2,774,000 Official census. Argentine Pears 21 The traffic department of the Southern Pacific and Western Railways has esti- mated the 1938 pear crop of the Mendoza District at 610,000 boxes, compared with the short crop of only 332,000 boxes in 1937, when the fruit suffered great damage as a result of unfavorable climatic conditions. While the trend in production in Mendoza is upward, it will be noted in table 1 that a steadily declining proportion of the total Argentine crop is being supplied by that region. Delta District The Delta district of the Parang River, located about 30 miles from the city of Buenos Aires, is a leading source of fruit for the population of Buenos Aires; but the quality of the fruit from this district is poor. Most of the fruit consists of peaches, quinces, and plums, and the production of pears is relatively insignifi- cant. The number of boxes of pears loaded for shipment by rail from the Delta dis- trict during the past 7 years is given in table 1. PRODUCTION AND TRADE No official data are available on the actual number of new pear trees planted in Argentina during the past 5 or 6 years. It 15 known, however, that new plantings have been extensive, especially in the Rio Negro Valley. The census taken by the Government in 1932 indicated a total of 2,631,000 pear trees for the entire country. Unofficial estimates place the total number at the tresent time at 3,300,000. According to the 1932 census, the Rio Negro Valley had 1,429,000 pear trees. A second census, taken in 1935, showed 1,748,000 trees, an increase of about 22 per- cent in the 3 years. It is generally believed that the period of rapid expansion in most of the Rio Negro Valley region is past. The number of trees at the present time is placed at 1,800,000. In the Mendoza region, the number of pear trees in 1932 was 929,000, according to the official census of that year. It is unofficially estimated that the present number is 1,100,000, an increase of around 18 percent. Expansion of pear production in the Province of Mendoza has been moderate compared with developments in the Rio Negro Valley. In the Parana' Delta region, very little, if any, new planting has taken place in recent years. Production Trends The Argentine Fruit Distributors some years ago calculated the probable annual pear crop in the Rio Negro Valley from 1935 to 1945. Actual railway shipments fell short of the estimates in 1935 and 1936, but the discrepancy in 1937 and 1938 was small. These calculations are given in table 4. It will be noted that the estimate for 1940 is double the 1937 crop and that the estimated 1945 crop is more than three times that of 1937. Table 4. Estimates of pear production in the Rio Negro Valley, 1935-1945 Year Estimated production Year Estimated production Year Estimated production 1,000 boxes 1,000 boxes 1.000 boxes 983 1,366 1,829 2,390 3,045 3,725 4,440 5,136 5,703 6,200 6,587 1936 1944 1942 In boxes of 44 pounds, net weight. Estimates made by the Argentine Fruit Distributors, Limited. 22 Foreign Agriculture According to the statistics of railway movement by districts, the estimated production in 1938 amounted to 2,698,000 boxes compared with a commercial crop of 2,029,000 boxes in 1937 and of 444,000 boxes in 1932. Expansion has been rapid in both of the two main producing regions, but the Rio Negro Valley' has contributed most to the sharp increase. See table 1 giving railway shipments of pears, by re- gions, for the period 1932-1938. Varities The Williams variety is the leading pear grown in Argentina at the present time. In 1937, this variety constituted 87 percent of the total crop in the Rio Negro Valley and about the same proportion in Mendoza. Higher prices paid for Passe Crassanne, Aremberg, and Beurre Anjou, however, are causing a shift in plantings to these varieties. It is believed that by 1945 the production of Williams will have declined to about 50 percent of the crop. A December 1935 census in the Rio Negro Valley gave the distribution of pear trees by varieties at that time. This distribution, given in table 5, shows the predominant position of the Williams variety. Table 5. Pear varieties grown in the Rio Negro Valley, 1935 Variety Number of trees Variety Number of trees Al encon Franco Russe Amanl is Angoul eme Anj ou Aremberg Barry Bosc Bonne Louise Clapp's Favor Cornice Cura Diel Esperans Argentine Fruit Distributors, 19, 149 1, 588 1, 141 31, 369 104, 815 110, 000 3, 298 14, 791 4, 326 831 33, 503 3, 136 17, 206 300 Limited. 41,601 1 ,518 7,927 1,701 910 80,667 14, 172 190,230 956,910 18,266 24,911 64,208 1,748,474 Foreign Trade and Domestic Consumption Sharp increases in exports of pears have been associated with the rapid expan- sion in production. Exports in 1937 of 12,984 metric tons (565,000 boxes) compare with 318 metric tons (14,000 boxes) in 1931- The expansion of market < outlets in England, Brazil, France, the United States, and Sweden have been especially rapid, as indicated in table 6. Tne seasonal character of exports and the extent to which the export movement is largely confined to the months of January , February , and March is indicated in table 7 giving exports by months from 1931 to 1937- Domestic consumption has more than doubled since 1934 and in 1937 absorbed i,479.ooo boxes of the total production of 2,029,000 boxes. Trade sources are of the opinion that the increase in domestic consumption in the immediate future will be small and that further expansion in production will require larger outlets abroad. Argentine Pears 23 Prospective production in 1942 in the Rio Negro Valley alone, disregarding new plant- ings since 1935, is equivalent to an additional 3,500,000 boxes for export, compared with total Argentine exports of 565,000 boxes in 1937. TaMe 6. Exports of pears from Agrentina, by country of destination, 1933-1937 Country 1933 1934 1935 1936 1937 Boxes Boxes Boxes Boxes Boxes 20,793 16,574 65,120 160,515 166,518 31,320 49,460 88,653 97 , 005 132, 196 1,262 609 957 54,549 125,846 _ 609 3, 176 11,658 3, 176 1, 000 2,610 3,262 32, 190 2,871 12,441 63,466 1,436 24 , 404 47,850 6,090 566 5,655 10,614 130 435 8,526 3,436 3,958 348 2,480 1,305 1,479 1,044 4,524 7,308 392 2,392 1,522 304 174 478 566 130 914 87 44 87 44 1,479 55, 158 73,559 180,266 414,250 564 , 804 a/ Converted from metric tons to boxes on the basis of 43.5 boxes per ton. b/ Preliminary. c/ Largely French possessions. Complied from yearbooks of Argentine General Bureau of Statistics, 1933 to 1936; and Boletin Infomativo, Argentine Ministry of Agriculture, December 1937, for 1937. Table 7. Exports of pears from Argentina, by months, 1931-1937 Month 1931 1932 1933 1934 1935 1936 1937 & Boxes Boxes Boxes Boxes Boxes Boxes Boxes 1, 175 11,528 9,396 5,003 19,228 14,399 110, 186 4,872 35,539 18,531 22,489 87,000 210,800 293,233 1,392 8,961 13,833 25,273 33,538 108,749 70,602 3,610 3,567 5,786 13,876 22,621 56,550 40,847 1 , 175 1,871 6,395 3,915 13,093 18,488 18,618 1,262 435 522 1 ,610 1,523 3,828 10,614 131 348 218 2, 132 ' 87 1,000 174 261 348 870 783 87 44 174 261 218 87 43 87 43 348 218 87 217 43 43 218 261 131 43 43 174 43 43 43 13 ,833 61,988 55 , 158 73,559 180,266 414,250 546 , 230 a/ Converted from metric tons on the basis of 43.5 boxes to the ton. b/ Preliminary. 1931 to May 1935, National Bureau of Agricultural Economics and Statistics, Argentine Ministry of Agriculture; June 1935 to date, Argentine General Bureau of Statistics. 24 Foreign Agriculture In view of prospective increased production, distributors are availing them- selves of every opportunity to find new and larger markets abroad and are consider- ably encouraged by the favorable reception of Argentine pears in a number of foreign markets. Shipping and refrigeration facilities are being improved. Moreover, in the trade agreements that the Argentine Government has negotiated with a number of countries during the past year, concessions have been secured with respect to tar- iffs, quotas, and exchange regulations on Argentine pears. There was formerly a small import trade in pears, almost exclusively from the United States, during the period when domestic pears were out of season. Larger do- mestic production, retention of cold-storage stocks for a longer period, and import duties and exchange charges, equivalent to about 45 percent of the c.i.f. value of the pears, have brought about a continuous decline in imports. Statistics for im- ports of pears alone are not available prior to 1934, but imports totaled 21,185 boxes in 1934 and only 10,745 boxes in 1937. Table 8. Imports of pears into Argentina, by montns, 1934-1937 Month - f 1934 1935 1936 1937 Boxes Boxes Boxes Boxes 305 5,742 1,349 5, 133 3,437 740 740 6,307 6,438 8,178 4,698 3,698 9,570 43 5,307 21,185 19,445 10,310 10,745 a/ Converted rrom metric tons on the basis of 43.5 boxes to the ton. b/ No Imports January-July, inclusive. Boletih Informativo , Argentine Ministry of Agriculture. Grading, Packing, and Precooling Facilities The Argentine Ministry of Agriculture has set up off icial standards for "extra fancy" and "fancy" pears. Officials of the Ministry of Agriculture inspect the pack- ing and grading of fruit at the packing plants. Inspectors also examine shipments for condition and grade just prior to exportation abroad and, on the basis of this examination, issue or deny export permits. The quantities of the two grades of pears handled by one of the largest dealers in the Rio Negro Valley during 1935, 1936, and 1937 may be taken as an indication of the general run of fruit for that producing region. See table 9. Table 9. Grades of pears handled by a Rio Negro dealer, 1935-1937 1935 1936 1937 Grade Wll- Others Total Wil- Others Total Wil- Others Total 1 i ams liams 1 iams 1,000 1,000 1,000 1,000 1,000 1,000 1 ,000 1 ,000 1,000 box es boxes boxes boxes boxes boxes boxes boxes boxed Extra Fancy. 157 13 170 103 18 121 182 4 1 223 18 18 114 22 136 168 42 210 Culls 145 , 1 146 102 3 105 183 34 217 Total 302 32 334 319 43 362 533 117 650 Argentine Pears 25 Precooling facilities for use in cooling grapes for shipment abroad are avail- able at the present time at San Juan and Mendoza. Only one grower has a small re- frigeration space for precooling pears, With this minor exception, there are no facilities for the precooling or refrigeration of shipments of pears en route to Buenos Aires. The railway company serving the Mendoza grape district has refrigera- tor cars for the movement of table grapes shipped abroad; but the railway company serving the Rio Negro Valley does not operate refrigerator cars, and pear shipments make the 26-hour haul from the packing plants to the port of Buenos Aires in freight cars having only special ventilation. Upon arrival in Euenos Aires, the fruit is immediately put into cold storage to await shipment abroad or local consumption. The railway officials maintain that Argentine pears arrive in good condition in European markets under present methods of handling and that precooling and refrig- eration shipment would involve additional freight charges and correspondingly lower prices to growers. Until the 1938 season, all of the pears exported abroad were moved out of Buenos Aires in parcel shipments on the larger steamers having refrigeration space. A Danish shipping line recently added small refrigeration boats of 1,000- to 1,500- ton capacity to its South American service, and some full boatload shipments were made for the first time in 1938. One trial shipment was made from the port of Bahia Blanca. Shipment from this port would involve a possible economy of 35 percent in railway freight charges from the Rio Negro Valley, as well as a prompter placement of the fruit in the re- frigeration chambers of the ship. If European or other markets can absorb full boatload shipments, the movement of pears from Bahia Blanca may take on some volume. Argentine Government regulations provide that all pears and apples must be precooled down to a maximum temperature of 39.2 F. In view of the trial character of the shipment from Bahia Blanca and the absence of cold-storage facilities at that port, the shipment was not precooled. Cold-storage facilities, however, will undoubtedly be provided at Bahia Blanca if full boatload shipments prove economical and desir- able. In the Rio Negro Valley, the packing charge (inclusive of box, labels, paper, grading, and handling) is 1.65 pesos (about 45 cents) per box. The freight rate to Euenos Aires is 1 peso (27.5 cents) per box, and the ocean freight rate from Buenos Aires to England is 2s.3d. per box of 20 kilograms (44 pounds), equivalent to 2.02 pesos (54 cents) at current rates of exchange. Surplus Production and Declining Prices Prices for Williams pears have fallen off sharply since commercial production on a substantial scale was attained. It is stated that from 1921 to 1924 orchard prices of from 8 to 12 pesos per box for pears and apples could be secured in sup- plying a market in Buenos Aires eager for fresh domestic fruit of high quality. It was merely a matter of a few years, however, until the production of pears exceeded the needs of the domestic market, even at sharply lower prices. Greater and greater dependence on foreign outlets has tended to bring about lower average prices. Since 1929, representative prices have declined continuously from an average net to growers of 5.88 pesos per box for Williams Extra Fancy in 1929 to a low of 1-39 pesos per box in 1936. The average net price to growers in 1937 was 1.53 pe- sos per box for Extra Fancy and 97 centavos per box for Fancy. Prices for other varieties have declined also, but are substantially better than for Williams, as indicated in table 10. 26 Foreign Agriculture Table 10. Net prices for pears to r/o Negro growers, per box of 44 pounds, delivered at packing sheds, 1929-1937 Williams Passe Crassanne Ar emberg W-l ntcr n e 1 1 s p Extra Fancy — — Extra Fancy Ex t r a Fancy E X t V Q. Fancy Fancy Fan cy Fancy Pan cy Pesos Pesos Pe sos Pesos Pesos — Pesos Pg so s — 5 r 6SOS 1929 5.88 4. 17 7. 14 6.88 7.61 6.51 5.08 2.86 4.40 3.25 7.59 6.59 6.81 5.29 4.27 3.23 2.62 2.29 10. 93 8.59 4.84 0.64 2. 16 3.01 2.91 2.36 11.28 9.09 7.83 6.62 4.26 3.37 1.55 1.05 4.39 1. 31 7.20 4.34 2.92 1.86 2.59 5.20 5.48 6.05 4. 14 4.32 5.54 1.70 7. 13 5. 16 5.35 3.77 5.74 4.35 1.39 1.00 2.67 2. 38 3.56 3.29 5.72 4. 93 1937 1.53 0.97 1.57 0.52 2.35 2. 81 2.50 2.34 The expansion and returns from the pear indust ry in Argent ina have been checked by these low prices and prospective lower prices for Williams pears. It is contended that at the present prices for Williams pears many growers cannot operate without a loss but that Williams do so well in the Rio Negro and Mendoza regions that good growers can operate at a small profit. Offsetting to some extent the low prices for Williams are the good returns in general from apples and from some of the late- maturing varieties of pears. 27 SOIL CONSERVATION IN NEW SOUTH WALES, AUSTRALIA .... By Leo J. Schaben* With the enactment on October 13, IQ3S, of the Soil Con- servation Act of New South Wales, Australia, the way was cleared for vigorous action to arrest the spread of erosion and to con- serve soil resources in the farming and grazing lands of that State. It is expected that with the act in operation rapid prog- ress will be made m the task of maintaining soil productivity, preserving drainage and water-storage areas from damage, and pro- tecting rich alluvial flats against the ravages of river-bank eros 1 on. A wide variety of farm products are produced in Sew South Vales. The principal agricultural exports are wool, wheat, but- ter, fresh and dried fruits, frozen and preserved meats, timber, hides and skins, tallow, and tobacco. In adopting legislation to check soil erosion at this comparatively early stage of its development, New South Wales is profiting from the mistakes of other parts of the world, which, although far older in settle- ment, are only now awakening to the gravity of the damage wrought by soi I erosion. The recently enacted legislation for the conservation of soil resources and for the mitigation of erosion in the State of New South Wales is of particular inter- est at this time, since it constitutes an outstanding example of cooperation between landowners and the Government for the purpose of checking the ravages of erosion and protecting the productivity of the soil. It is the first legislation of its kind in the Commonwealth, and it is expected to inspire similar legislation in the other States. The Soil Conservation Service set up by the act has been granted far-reaching authority to initiate and carry through projects designed to conserve soil resources and mitigate erosion. One of the main features of the law, however, is tiiat it pro- vides for cooperation on the part of landowners in the realization of those ob- jectives. The Government has pointed out that it will be impossible to carry out anti-erosion work on every farm requiring it. It is intended to limit the main ac- tivities in agricultural and grazing lands to districts where requests for assistance originate and where urgent action is most necessary. Whatever work is done on pri- vate properties, according to an official statement, will be done in districts where the voluntary cooperation of the farmers is assured. Only when damage originating from an owner's land is causing deterioration of lands of an adjoining owner, or of existing national works, will there be any eleirent of compulsion. ♦Assistant Agricultural Economist, Foreign Agricultural Service. 28 Foreign Agriculture The act deals principally with the development and execution of plans relat- ing to the work that needs to be done in areas of erosion hazard and in connection with the storage, regulation, and conservation of the water supply, including irri- gation, prevention of inundation of land, and changing the courses of rivers. Ac- cordingly, it defines the areas of erosion hazard and sets up detailed procedure for the execution of erosion-control projects and works relating to the storage regulation and conservation of water supply. DIRECTOR AND POWERS OF THE SOIL CONSERVATION SERVICE The new law, known as the Soil Conservation Act, 1938, authorizes the Gover- nor of the State to appoint a Director of a Soil Conservation Service. He is to be responsible directly to the Minister, presumably the Minister for Public Works, who was largely responsible for the introduction and adoption of the act. The Director, subject to the control of the Minister, will exercise and discharge the various pow- ers, authorities, duties, and functions conferred and imposed upon him by the act. Among these are the following: (1) To conduct experimental and research work with a view to conserving soil resources and protecting the drainage areas of the State; (2) to direct special investigations relating to soil conservation and ero- sion mitigation; (3) to conduct demonstrations of methods for soil conservation and erosion mitigation; and (4) to enter any land and make such surveys, place such marks, and carry out such investigations thereon (including the taking of specimens of soil? as he may deem necessary. It also authorizes the Director of the Soil Conservation Service (1) to pre- pare projects for the purpose of soil conservation and erosion mitigation in various drainage areas and areas of erosion hazard; (2) to enter into such agreements with all or any of the respective owners, occupiers, or mortgagees of the lands proposed to be dealt with under a project as may be necessary to insure speedy completion; and (3) to supervise and carry into effect all soil-conservation, erosion-mitigation, water-conservation, irrigation, and drainage projects that have been approved by the Minister. AREAS SUBJECT TO ACTIVITIES All parts of the State officially listed as areas of erosion hazard automat- ically become subject to the activities of the Soil Conservation Service and there- by become regions in which soil-conservation and related projects may be applied. The act itself definitely specifies that part of the State of New South Wales which forms the catchment area of the Snowy River and its tributaries as an erosion-hazard area. In addition, it gives . the Minister the authority to list any other part of the State as an erosion-hazard area whenever, in his opinion, the tract in question "is subject to erosion or is liable or likely to become subject to erosion." Landowners, however, are given a wide margin of protection. Before addi- tional tracts of land may be officially listed as being within an area of erosion hazard, the Minister must publicize his intentions to that effect in newspapers cir- culating in the locality in which the tracts are located. Such notification must clearly define the tracts in question by reference to a map. Moreover, it must set a date on which objections may be filed to the inclusion of the tracts in the pro- posed erosion-hazard area. A copy of the notification must be served upon all owners, occupiers, and mortgagees of the lands affected. They then have the right to file objections. The Minister is obliged to give careful consideration to each objection before he New South Wales 29 announces his decision. If any of the owners, occupiers, or mortgagees are dissatis- fied with the decision, an appeal may be filed with the Land and Valuation Court which has jurisdiction to hear and determine the case. In considering an appeal against the proposed inclusion of lands in areas of erosion hazard, the Land and Valuation Court will take into consideration whether or not the specific tract is actually subject to, or is likely to become subject to, erosion and whether or not any part of the land should be included. If no objection to the proposal has been lodged, or as soon as objections have been disposed of by the Land and Valuation Court, the Minister submits the proposal to the Governor with such alterations as may be necessary to give effect to the de- terminations of the court. The Governor is then authorized to pronounce the tract of land defined in the proposals an area of erosion hazard. EXECUTION OF WORKS Before any scheme of operation for the purpose of soil conservation or erosion mitigation may be begun, the Director of the Soil Conservation Service is obliged to forward complete details of the proposed project to the Minister, indicating the lands to be dealt with and the nature and class of operations to be carried out on them. When approval is granted, the proposed scheme of operations is to be referred to as a proj ect. The act definitely provides for cooperation on the part of landowners in all areas where soil-conservation or related projects are to be initiated. With that end in view, it authorizes the Director to enter into such agreements with all or any of the respective owners, occupiers, or mortgagees of the lands proposed to be dealt with as may be necessary to insure a speedy completion of the project. Whether any measure of compulsion will become necessary in enforcing compli- ance with approved soil-conservation and erosion-mitigation projects apparently will depend largely on the landowners themselves. Once a specified tract of land has been listed as being within an area of erosion hazard, the Governor may, on the rec- ommendation of the Minister, authorize the Director of the Soil Conservation Service to enter upon the land and execute such works as may be necessary for the purpose of giving effect to the project instituted. The law also provides, however, that the Minister is not to make such a rec- ommendation (i) unless he is satisfied that the execution of the work is necessary to avoid damage to some other land within the area; (2) unless the owner, occupier, or mortgagee of the land specified in the recommendation has neglected or refused to enter an agreement to insure the carrying into effect of the project; and (3) unless the Minister has given notice that he intends to make the recommendation and has, in the notice, appointed dates within which objections may be lodged. Objections to the initiation of a project must be filed with the Minister, who is to refer them to the Catchment Areas Protection Board, set up by the act to consider the same. Appeals from the findings of the board may be made to the Land and Valuation Court. The Minister must give consideration to the report of the board or the court before he may recommend that the Governor authorize the Soil Conserva- tion Service to go ahead with tne project. Moreover, before work may be started, the Minister must serve notice on the owner, occupier, or mortgagee concerned of in- tention to execute such work. 30 Foreign Agriculture Approved soil-conservation and erosion-mitigation projects are to be carried out jointly with the cooperation of the respective owners, occupiers, or mortgagees of the lands, the various Government Departments concerned, and the various statu- tory corporations operating in the State. Among the latter are the several water, sewerage, and drainage boards; the various commissions for railways, main roads and road transport, and tramways; the State Reclamation Trust; the State Maritime Serv- ice Board; the Conservation and Irrigation Commission; the State Forestry Commis- sion; and the county, municipal and shire councils. The act authorizes the Minister to make use of the service of the officers and employees of any Government Depart- ment and of any statutory corporation. FINANCING PROJECTS UNDER THE ACT The act does not specify any fixed proportion of the costs to be borne either by the State or by the owners of the land on which work is done. It merely provides that, while the Minister may meet the costs and expenses incurred in carrying proj- ects into effect from moneys provided by Parliament, he may also call upon the owners of the land to contribute toward meeting those costs. In view of the detailed pro- visions of the act dealing with the procedure to be followed in calling upon land- owners to contribute toward meeting the costs, it would appear that a substantial part of the burden is to be shifted to the landowners themselves. In order to enable owners of land who have entered agreements with the Soil Conservation Service to carry out their obligations under such agreements, the law provides that the Minister may make advances out of funds provided by Parliament. These advances are to be made subject to such covenants, conditions, and provisions, and upon such security and rate of interest, as the Minister may think fit. The act also provides, however, that whenever any work is actually done in areas subject, or likely to become subject, to erosion, the Minister may determine the contribution or share of the total cost to be borne by the owner of the land concerned. Before actually fixing such assessments, the Minister is advised to satisfy himself that such procedure is just and equitable, tfhen in his opinion it is justi- fiable, he must notify the owner, specifying the amount of his contribution or pay- ment and the manner and time in which it is to be made. Should the owner of the land object, he may appeal to the Land and Valuation Court, whose decision is final. In arriving at a decision as to the proportion, if any, of the costs to be borne by the landowner, the court is ordered to take into account the total cost of the work and the area affected; the present and prospective amounts by which the value of the land of which the appellant is the owner or mortgagee will be enhanced or maintained by reason of the work; and the depreciation that would be likely to occur in the present value of the land had the work not been executed. The amount specified in the original notification, or that subsequently de- termined by the Land and Valuation Court, may be paid by the owner in equal annual installments over a period of not less than 10 years if it does not exceed £50 (ap- proximately $245', and over a period of not less than 15 years if it exceeds £50. The rate of interest is to be determined by the Minister. The notification must specify the date upon which the amount, or the first and subsequent installments, shall be paid. Every charge that becomes payable by a landowner under the Soil Conservation Act and any costs awarded to the Minister in proceedings for the recovery of that amount are to be registered as charges upon the land due the Crown. The debt is to New South Wales 31 be paid by the owner in priority to all sales, conveyances, transfers, mortgages, charges, liens, and incumbrances made after the date such charges were registered. PROCLAIMED WORK IN CATCHMENT AREAS The new law also provides that the Governor may, by proclamation, declare any work or proposed work for the storage, regulation, or conservation of the water sup- ply in the various catchment areas of the State to fall within the provisions of the Soil Conservation Act. This part of the act applies specifically to works undertaken in that part of the State forming (1) the catchment area of the Murrumbidgee River and its tribu- taries draining into the Burrinjuck Storage Reservoir; (2) that part of the State forming the catchment area of the Indi and Murray Rivers and their tributaries drain- ing into the Hume Reservoir; and (3) that part of the State forming the catchment areas of the Abercrombie and Crookwell Rivers and their tributaries, together with that part of the catchment area of the Lachlan River and its tributaries draining into the Wyongala Dam Storage Reservoir. Whenever the Minister is satisfied that anything done or proposed, on or in relation to any land within a specified catchment area, has caused or is likely to cause damage to or interference with the utility of any proclaimed work, he may serve notice on the owners of the land in question to abstain from doing these acts and to cooperate with the Government in mitigating the damage. Should the owner, occupier, or mortgagee of the land in question have any ob- jection to the requirements of such notice, he may file a protest with the Catchment Areas Protection Board. In event of an unfavorable ruling, he may appeal to the Land Valuation Court, whose decision is final. As in the case of approved projects initiated under the section of the act dealing with areas of erosion hazard, the Minister is authorized to meet the costs involved from moneys provided by Parliament. He is likewise authorized, however, to place assessments on the owner of the land in question if he is satisfied that such procedure is just and equitable. Such payments similarly become registered charges on the land, and are payable in annual installments as provided for in connection with works instituted in areas of erosion hazard. GENERAL PROVISIONS OF THE ACT Several of the general provisions of the Soil Conservation Act are of suffi- cient importance to warrant brief mention. First among these is the authority granted the Minister to set up advisory committees, to consider and to make recommendations on such matters in relation to soil conservation or erosion mitigation as may be re- ferred to it. The Minister and the Director of the Soil Conservation Service are to be chairman and vice chairman, respectively, of any such committees. The duty of the committees will be to consider and make recommendations on such matters pertain- ing to soil conservation and erosion mitigation as may be referred to them by the Minister. Another interesting feature of the act is the authority given the Governor to purchase or appropriate land, provided such purchase or appropriation is for an au- thorized work to be constructed under the supervision of the Minister of Public Works. Such land is to be vested in his Majesty and may be leased by the Minister to any person at such rent and subject to such covenants and conditions as the Min- ister may determine. The term of any lease may not exceed 5 years. 32 Foreign Agriculture A third provision of the act is the authority granted the Governor on the com- pletion of any work carried out in pursuance of the act to vest, upon the recommen- dation of the Minister, its care, control, and maintenance in any one of the various statutory corporations of the State. The Governor may also vest in the statutory corporation the whole or any part of the land acquired for the purposes of the work. Finally, the Governor may, on the joint recommendation of the Minister and the Secretary of Lands, make regulations prohibiting or controlling the destruction of timber on any lands held under any form of lease or license relating to the dis- position of lands of the Crown. In addition, he may make regulations prohibiting the lighting of fires in any area of erosion hazard or in any catchment area con- stituted under the terms of the act. In conclusion, the act amends the Crown Lands Consolidation Act, 1913; the Closer Settlement Act, 1904., as amended by subsequent act; the Returned Soldiers Settlement Act, 19 16 , as amended by subsequent acts; and the Forestry Act, 1916-1935- Th ese various acts are amended so as to eliminate all conflict with the Soil Con- servation Act, 1938. 33 ARGENTINE GRAIN ELEVATOR FROGRAM * To further the interests of grain producers, the Argentine Government has sought in recent years not only to bring about im- mediate recovery through the establishment of minimum prices, but also to effect a long-range program that seeks to improve the production and market ing of grains. Included in the latter is the construction of a general network of State-owned rural and terminal elevators. These are designed to expand the grain- storage capacity of the nation from the present level of 415 million bushels to a total of 461 million bushels by 2942. The construction of a modern grain-elevator system has been a live issue in Argentina for several years. The importance of Argentina as a world producer and ex- porter of grains, the paucity of grain-storage facilities, the fact that surplus and carry-over in some recent years have taxed to the limit the existing grain-storage facilities, and the desirability of maintaining a high quality of grain in order to meet competition in the export market are some of the more important considerations advanced to show the need for improved and larger storage facilities. As for the first point, official statistics indicate that Argentina is the world's foremost producer and exporter of linseed, the largest exporter of corn, and the second largest exporter of wheat. Linseed production amounts to an average of 70 million bushels per year, almost 85 percent of which is exported. The corn output of the country has averaged 325 million bushels per year in the past dec- ade, with exports around 80 percent of the total. The annual wheat crop of recent years has averaged 321 million bushels, and approximately 55 percent of it is sold abroad. In the light of Argentina's importance as a world supplier of grains, facili- ties for handling and storing grains have been far from adequate. Growers have been the chief group to suffer from this condition. Not only at farms, but also at coun- try shipping points and at terminal and export centers, the grain-elevator capacity of Argentina has apparently been inadequate in recent years. Farms are practically devoid of adequate grain-storage facilities. As a con- sequence, growers must often sell their crops to local buyers soon after they are harvested. In the case of corn, sale takes place soon after the drying process, which is from May to July; and the buyer usually shells and transports the corn to market in bags. As regards wheat, the farmer's crop is often hauled to a local railway to be loaded directly on cars, or is stored in sheds and warehouses owned by the railways. ♦Based on a report from Acting Agricultural Attache' C. L. Luedtke at Buenos Aires. 34 Foreign Agriculture Frequently the grower sells his grain to a local storekeeper from whom he has obtained credit. The latter takes care of storing the grain, cleaning and grading it, and ultimately selling it to a grain dealer. Such transactions have a tendency to lower the grower's income and cause him to lose all incentive to improve the quality of his crops. The storage facilities at country shipping points have not, as a rule, been designed to store grain for more than relatively short periods of time. They are consequently taxed to capacity when shipments to consuming markets and export cen- ters are at a low ebb. Moreover, in years of bumper crops the sheds and elevators at these country shipping points become so overcrowded as to necessitate the con- struction of temporary platforms. On these wooden platforms, suspended a few inches from the ground, the sacks of grain are piled up to await shipment, with only a tar- paulin spread over them for protection. Fig. I. Sacked grain stored under tarpaulin cover at railroad siding. From the country shipping points in the interior to the large consuming mar- kets and export centers, the greater part of the grain is transported in bags by rail. In the past 5 years, however, there has been a substantial increase in the grain hauled by motor truck. This increase is particularly noticeable at the port of Queque'n in the southern part of the Province of Buenos Aires, which, unlike other ports, is not favored with railway lines in all directions. Recent changes in the rates charged by motor trucks for hauling have materially widened the competitive limits for trucks compared with hauls by railway. The theoretical limits of compe- tition have been fixed at 92 miles for wheat, 94 miles for oats, and 130 miles for linseed - a substantial increase since 1933. The great bulk of the export shipments of grains are made from the ports of Rosario, Buenos Aires, and Bahia Blanca. From no to 50 percent of corn exports go out of the port of Rosario and from 35 to 40 percent out of the port of Buenos Aires- As for wheat, Rosario is the point of shipment for about 30 percent, Eahia Blanca for 20 percent, and Buenos Aires for around 20 percent of the exports. Argentine Elevators 35 At these ports, the grain is either stored in bags until emptied into the ships' holds or in bulk in the limited terminal-elevator space available. In years of large crops, or when export trade is dull, congestion takes place at terminal elevators and export warehouses. This has been detrimental to owners of warehouse facilities and finance companies, whose capital remains tied up for long periods of time. Fig. 2. Terminal elevator at Bahla Blanca of a capacity of 3,656,000 bushels. This Is Illustrative of the new terminal elevators now under construction. Because of the foregoing circumstances, the recent depression emphasized more than ever the need for a more adequate grain-elevator system in Argentina. Concrete action to improve the situation was taken in September 1933 with the enactment by the Argentine Congress of the Grain Elevator Law. This law authorized the construc- tion, under governmental control and supervision, of a series of grain elevators throughout the growing and distributing districts of Argentina. To carry out this end, the law called for expenditures of 100 million pesos (about $32,000,000) to be raised by floating a bond issue. To administer the law, the President was authorized to appoint, with the consent of the Senate, a commission of seven members, known as the National Bureau of Grain Elevators and consisting of representatives of the Gov- ernment, agricultural interests, railway companies, the Bank of the Nation, and the Grain Exchange. In general, the National Bureau of Grain Elevators was empowered to exercise control over the country's elevator system, to determine the manner of operating these elevators in the interest of the public, and to authorize the construction of new local and terminal elevators to be operated by the Government as a public serv- ice. The grain law of September 1935 incidentally changed some of the foregoing set-up. This law was designed primarily to improve the general conditions of pro- duction and marketing and to foster grain exports. It gave broad powers to the Federal Government over all functnons incident to the production and marketing of grains. It affected the grain-elevator program in one very important respect. The 36 Foreign Agriculture former National Bureau of Grain Elevators was replaced by the National Grain and Elevator Commission, and the latter was empowered to administer both the Grain Ele- vator Law of 1933 and the new grain law. The National Grain and Elevator Commission was given control over both public and private elevators. The permanent control of the nation's grain elevators was effected on the first of January, 1938, in accordance with a public announcement of the National Grain and Elevator Commission. A permanent staff of assistants was appointed by the Commission to carry out the provisions of the law and to further the elevator- construction program. Under construction at present are four new terminal elevators and one extension. The cost of the work now in progress is being defrayed from an allotment of 50 million pesos from the exchange profits arising from the foreign- exchange operations of the Argentine Government. Whether the funds from these op- erations will continue to pay for the elevator program is not certain. Fig. 3. New Terminal Elevator now under construction at the port of Buenos Aires. Capacity 148,500 tons, or 5,455,000 bushels. What will the present program mean to Argentina's grain-storage facilities? Not considering the facilities now under construction, there is available in Argen- tina a grain-storage capacity of less than 415 million bushels. Of this total, ter- minal elevators and railway sheds at ports account for over 78 million bushels and country elevators and shipping-point sheds for slightly more than 336 million bush- els. The former consist of (1) 10 terminal elevators of a total capacity of about 42 million bushels, plus (2) several railway sheds, located at the ports, with a capacity of approximately 36 million bushels. The latter consist of (1) 253 country elevators and 98 grain warehouses with a capacity of nearly 19 million bushels and (2) numerous railway sheds at country shipping points iiaving a capacity of over 317 million bushels. The country storage capacity is over four times as great as the terminal capacity. Moreover, it is apparent that the great bulk of storage facili- ties consist of railway sheds at country shipping points, most of which, as has been indicated, are in poor physical condition and are quite inadequate to meet current needs. Argentine Elevators 37 Present construction is confined solely to terminal elevators. The four ter- minal elevators now under construction and the one extension will add over 14 mil- lion bushels to the existing storage facilities. The location of these elevators and their capacity is as follows: Location Capacity Bushels New Port (Buenos Aires) 5,455,890 Villa Constitucion 2,020,700 South Rosario 2,755,500 Queque'n 1,748,824 Ingeniero White, addition (Bahi'a Blanca) 2,204,400 Total 14,185,314 The time allowed for the completion of these elevators ranges from 22 to 40 months, as from January 1938. Several of the elevators, including the one at Queque'n, are expected to be ready earlier. In addition to the foregoing, there is proposed the construction of 9 termi- nal elevators, 1 terminal-elevator extension, and 321 country elevators and grain warehouses with a total capacity of almost 33 million bushels. With the completion of this vast program, Argentina is expected to have a total grain-storage capacity of well over 461 million bushels. The present capacity, as well as that under con- struction and proposed, is summarized in table 1. Table 1. Argentine grain-storage capacity, present and proposed Class Present Under Proposed Total construction 1,000 1,000 1,000 1,000 bushels bushel s bushels bushels Terminal storage: 42,038 14,185 9,848 66,071 36,405 36,405 Country storage: Country elevators and grain 18,958 22 , 828 41,786 Railway sheds at country 317, 147 317,147 414,548 14,185 32 , 676 461,409 ./ Compiled from data submitted to the United States Igrlcultnral Attache' by the National Grain and Elevator Commission at Buenos Aires. Whether these facilities, when available, will suffice to meet- the needs of the Argentine grain trade is open to question. It may be pointed out, however, that the terminal storage capacity will then exceed 102 million bushels. This compares with average annual exports of grain from Argentina of 520 million bushels, accord- ing to the 1933-1937 figures. The great bulk of this grain goes through the termi- nal elevators and out of the shipping ports during the first 6 months of the year. As for the country storage facilities, there is no doubt that the addition, in the form of modern country elevators, of a storage capacity of 42 million bushels will constitute a very material improvement. 38 Foreign Agriculture An interesting development anticipated from the use of elevators for the han- dling and storage of grains and linseed is the eventual displacement of the present system of shipment in bags, particularly between the country elevators and the ter- minal elevators at the ports. To what extent this snift from bags to bulk handling will take place cannot now be estimated. It will not be a complete shift, since grains will probably continue to be hauled to the terminal elevators by motor trucks, which, as has been indicated, are being used to an increasing extent. That this factor is recognized by the Government is indicated by the fact that the new terminal elevators under construction, and those proposed, are equipped with platforms and other facilities to enable them to receive grain arriving by motor truck. RECENT DEVELOPMENTS IN FOREIGN AGRICULTURAL POLICY 39 ARTIFICIAL FIBERS FROM COAL CONTEMPLATED IN GERMANY Experiments recently conducted at the Technische flochschule in Berlin have demonstrated the possibility of producing cellulose from brown coal, of which Germany has very large reserves, according to a report received in the Foreign Agricultural Service from its Berlin office. The significance of the development lies in the fact that, if costs of production are not prohibitive, it will furnish another raw material for the production of cellulose from which paper and synthetic fibers can be produced. Since the initiation of the program of self-sufficiency, Germany has attempted the production of artificial fibers on a large scale, using mostly wood and straw as raw materials. The utilization of locally available raw materials for this purpose has served to curtail greatly the importation of cotton, wool, silk, and other natu- ral fibers. Germany's brown-coal reserves represent the result of forces that during ge- ological ages converted vast forests of coniferous trees into deposits of coal. An appreciable percentage of the deposits is said to consist of lignite, from which a good grade of cellulose, especially desirable for paper manufacture, can be produced. The new process is reported as yielding from 15 to 25 percent cellulose, compared with about 40 percent from wood. Under the assumption that the brown coal mined in Germany will yield, on an average, about 4 percent lignite, it is estimated that some 7 million tons of lignite could be made available annually for that purpose. On the basis of a 15- percent yield in cellulose, it is estimated that these 7 million tons of lignite would make available more than 1 million tons of cellulose per annum. There is as yet, however, no information as to the probable cost of produc- tion, though it is pointed out that, compared with wood, lignite is very low in price. Although the production costs of artificial fibers in Germany have been reduced in recent years, they are still high compared with prices of cotton and other natural fibers. Moreover, an additional unfavorable factor has been the fact that the amount of timber cut for cellulose manufacture has exceeded the new growth. TURKEY ESTABLISHES OFFICE OF PRODUCTS OF THE SOIL By a Law of July 3, 1938, the Turkish Government established an official agency called the Office of the Products of the Soil to be entrusted with the organi- zation, development, and control of the production and sale of cereals and opium in Turkey. The new agency, which began operating at Istanbul on September 8, 1938, is under the control of the Ministry of Economy. It has taken over and will extend the functions of the Bank of Agriculture regarding the production, purchase, and price control of wheat and loans to farmers, as well as the work of the Narcotics Monopoly. The primary reason for the creation of the new office is said to be to improve the foreign market for Turkish cereals through standardization and price control. 40 Foreign Agriculture The principal functions outlined for the new office are (l) protection and regulation of the grain market through purchases, price fixing, import and export monopoly, and measures to foster sales abroad; and (2) control of the manufacture, exportation, and importation of narcotics. The domestic trade in raw opium, how- ever, is to remain free. The capital stock of the office is 17 million Turkish pounds (approximately $13,700,000), but the Government will lend its assistance in case of need. More- over, the office may, with the consent of the Council of Ministers, float bonds, with or without interest, and contract loans up to 15 million Turkish pounds (about $12,000 ,000) . It may also establish agencies abroad. Since undertaking control of the price of Turkish wheat in 1932, the activi- ties of the Turkish Government and the Bank of Agriculture, by providing a stable and profitable market for the Turkish farmer, have resulted in greatly increased wheat acreage. Furthermore, the yield per acre has been substantially increased by the use of better seed and better methods of cultivation promoted by the Government. As a result, Turkey, a former importer, is now exporting wheat. Facilities for the storing, grading, and export of grain have also been provided. Consequently, the Office of the Products of the Soil, in entering on its duties, finds a good part of its work well begun. VENEZUELA CONTEMPLATES GREATER ENCOURAGEMENT TO AGRICULTURE There is a growing feeling in Venezuela that the social and economic well- being of the people demand an immediate concentration on the development of the nation's agricultural resources, according to a report received in the Foreign Agri- cultural Service from Livingston Satterthwaite , American vice consul at Caracas. The principal agricultural exports of Venezuela at the present time are cof- fee, cacao, live cattle, and hides and skins. A considerable number of other prod- ucts are also grown, but only for domestic consumption. Among these are sugar, rice, cotton, tobacco, corn, potatoes, wheat, vegetable oilseeds, and fruits. In most cases, these crops must be supplemented by imports. The Government of Venezuela believes that the nation can produce its entire requirements of all farm products if modern methods are adopted and production costs are lowered. Up to the present time, aid to agriculture has been confined to a sys- tem of export bounties for the principal agricultural products and to a general in- crease in the agricultural import duties to compensate for the increase in the value of the bolivar. The new policy now under contemplation provides for subsidization of a wider range of agricultural enterprises from the proceeds of the oil industry so that farming may be firmly established by the time the oil resources are exhausted. Im- migration of agriculturists is likewise to be encouraged. Special attention is to be devoted to increasing the number of small land- owners. The Government feels that the social and economic well-being of the country depends on a prosperous and contented farm population based as far as possible on a system of small landholdings . Heretofore, high wages paid by the oil companies have made ownership of small holdings relatively unprofitable. Recent Developments 41 The principal obstacle to immediate progress in increasing agricultural pro- duction in Venezuela is competition in the labor market caused by a 3-year public works program and the high wages being paid in the oil industry. It is believed, however, that as soon as the public works program nears completion a large number of the laborers can be shifted into agricultural enterprises. In the meantime, the Government is sending students abroad to study agronomy, veterinary science, forestry, hydraulic engineering, irrigation, and allied sub- jects. It is hoped that these students, on returning to Venezuela, will teach in agricultural schools or become employees of the Ministry of Agriculture. A number of experimental farms have been established. These are designed to serve as models of what can be done along agricultural lines when modern methods are adopted. NORTHERN IRELAND ASSISTS FLAX GROWERS A steady decrease in the acreage sown to flax, threats of farmers to cease growing flax unless aided by the Government, and need of assuring domestic supplies of flax in the event of war have all contributed to the recent decision of the Gov- ernment of Northern Ireland to appropriate $250,000 annually for 3 years for the purpose of encouraging the flax-growing industry, according to a report received in the Foreign Agricultural Service from Ernest L. Ives, American consul general at Belfast. The money is to be used for the introduction of modern equipment in linen mills, for the establishment of improved methods of handling flax, and for the en- couragement of improved methods of production. A committee consisting of repre- sentatives of flax spinners and growers will administer the fund. It is believed that the committee will give its immediate attention to the use of pedigreed seed, to solving difficulties resulting from a shortage of labor in the flax-growing regions, to encouraging the use of flax-pulling machines, and to the establishment of a system of central retting. Attention will also be given to the mechanical decortication of flax. The area devoted to flax in Northern Ireland has declined from the 1910-1914 average of 45.000 acres to 19,000 acres in recent years. In 1918, approximately 143.000 acres were sown to flax, and the crop that year amounted to 15,703 tons. The Government of Northern Ireland is of the opinion that the industry can be re- established on a self-supporting basis in 3 years, particularly if modern methods asp adopted. DOMINICAN REPUBLIC REGULATES RICE PRODUCTION AND TRADE The Government of the Dominican Republic has recently announced that its policy will be to adopt every means practical in order to expand the production of such crops as will aid Dominican agriculture to become less dependent on foreign sources of supply for essential foods, according to a report received in the Foreign Agricnltural Service from Eugene M. Hinkle, the American Consul at Ciudad Trujillo, Dominican Republic. 42 Foreign Agriculture In line with that policy, a decree issued by the President of the Republic on November 7, 1938, provides for regulating the production, preparation, and marketing of rice. The decree prohibits (1) the cutting of stems that are not entirely rip- ened; (2) the storing of unthreshed rice for more than 3 days; (3) the threshing of rice with clubs; (4.) the storing of undried rice; (5) the drying of rice in piles or in such a way that drying is imperfect; (6) the drying of rice on the ground; (7? the selling of mixed rice in the hull; (8) the mixing of dirty, mouldy, or damaged rice with clean rice; and (9) the threshing of mixed varieties of rice. The decree also provides that the basic unit to be used in buying and selling paddy rice is to be 100 kilos (220 pounds) net. The sale and purchase of rice that is not dry and free from all foreign matter is prohibited entirely. Moreover, the threshing, selling, and purchase of threshed or paddy rice may be done only by those who have secured licenses from the Department of State for Agriculture, Industry, and Labor. The new law also establishes 12 varieties of rice to be recognized in all trading operations and authorizes the Department of State for Agriculture, Industry, and Labor to determine the varieties that may be cultivated in the various producing areas of the Republic. In that connection, the planting of seeds from mixed varie- ties or from varieties not specifically recommended by the Government is prohibited. When threshed and ready for sale, rice must comply with the following condi- tions: 1 1) It must not have foreign odors or be mouldy or wet; (2) it must be packed in new bags containing 100 pounds gross, with each bag marked according to variety, producing firm, and other specifications requisite to identifying the variety, qual- ity, and grade of the product. The General Inspectors of Produce, the Inspectors of Produce, the agricul- tural Instructors, the Chiefs and Officers of the National Police, and the Forest Guards are charged with the responsibility of enforcing the new law. Penalties are provided for infractions of any orders issued by the Department of State for Agri- culture, Industry, and Labor relating to the cultivation, preparation, and marketing of rice.