TEXTS OF TREATIES AND AGREEMENTS

1

INTERNATIONAL WHEAT AGREEMENT 1933 1

The Governments of Germany, Austria, Belgium, Bulgaria, France, the United Kingdom of Great Britain and Northern Ireland, Greece, Hungary, Irish Free State, Italy, Poland, Roumania, Spain, Sweden, Czechoslovakia, Switzerland, The Union of Socialist Soviet Republics, and Yugoslavia, having accepted the invitation extended to them by the Secretary-General of the Monetary and Economic Conference on behalf of the Governments of Argentina, Australia, Canada and the United States of America, to take part in a Conference to consider the measures which might be taken in concert to adjust the supply of wheat to effective world demand and eliminate the abnormal surpluses which have been depressing the wheat market and to bring about a rise and stabilization of prices at a level remunerative to the farmers and fair to the consumers of breadstuffs, have agreed as follows::-

ARTICLE 1.

The Governments of Argentine, Australia, Canada and the United States of America agree that the exports of wheat from their several countries during the crop year August 1, 1933 to July 31st, 1934 shall be adjusted, taking into consideration the exports of other countries by the acceptance of export maxima fixed on the assumption that world import demand for wheat which will amount during this period to 560,000,000 bushels.

ARTICLE 2.

They further agree to limit their exports of wheat during the crop year August 1st, 1934 to July 31st, 1935 to maximum figures 15% less in the case of each country than the average out-turn on the average acreage sown during the period 1931-1933 inclusive after deducting normal domestic requirements.

The difference between the effective world demand for wheat in the crop year 1934–5 and the quantity of new wheat from the 1934 crop

'Text printed from the Final Act of the Conference of Wheat Exporting and Importing Countries. Authenticated copies not yet received by the Department of State.

See Bulletin No. 47, August 1933, p. 10.

available for export will be shared between Canada and the United States of America as a supplementary export allocation with a view to the proportionate reduction of their respective carry-overs.

ARTICLE 3.

The Governments of Bulgaria, Hungary, Roumania and Yugoslavia agree that their combined exports of wheat during the crop year August 1st, 1933 to July 31st, 1934 will not exceed fifty million bushels. This undertaking is made on the understanding that the aggregate may be increased to a maximum of fifty four million bushels if the Danubian countries find that such a supplementary quota is required for the movement of the exportable surplus of the 1933 crop.

ARTICLE 4.

They further agree that their combined exports of wheat during the crop year 1934-35 will not exceed a total of fifty million bushels and recognise that the acceptance of this export allocation will not allow of any extension of the acreage sown to wheat.

ARTICLE 5.

The Government of the Union of Socialist Soviet Republics, while unable to give any undertaking in regard to production of wheat, agree to limit their exports for the crop year 1933-34 to a figure which will be arrived at upon the completion of negotiations with the Governments of the Overseas Wheat exporting countries. They also agree that the question of their export of wheat during the crop year 1934-35 shall be the subject of further negotiations with the wheat exporting countries represented upon the Advisory Committee.

ARTICLE 6.

The Governments of the wheat importing countries in signing this instrument:

(I) Agree henceforth not to encourage any extension of the area sown to wheat and not to take any governmental measures, the effect of which would be to increase the domestic production of wheat.

(II) Agree to adopt every possible measure to increase the consumption of wheat and are prepared to bring about the progressive removal of measures which tend to lower the quality of breadstuffs and thereby decrease the human consumption of wheat.

(III) Agree that a substantial improvement in the price of wheat should have as its consequence a lowering of customs tariffs, and are prepared to begin such adjustment of customs tariffs when the international price of wheat reaches and maintains for a specified

period an average price to be fixed. It is understood that the rate of duty necessary to assure remunerative prices may vary for different countries, but will not be sufficiently high to encourage their farmers to expand wheat acreage.

Appendix A contains the agreed definitions relating to the technical points mentioned in this paragraph.

(IV) Agree that in order to restore more normal conditions in world trade in wheat the reduction of customs tariffs would have to be accompanied by modification of the general regime of quantitative restriction of wheat imports and accept in principle the desirability of such a modification. The exporting countries for their part agree that it may not be possible to make substantial progress in these modifications in 1933-34, but the importing countries are prepared to make effective alterations in 1934/35 if world prices have taken a definitely upward turn from the average price of the first 6 months of the calendar year 1933. The objective of these relaxations of the various forms of quantitative restrictions will be to restore a more normal balance between total consumption and imports, and thereby to increase the volume of international trade in wheat. It is understood that this undertaking is consistent with maintaining the home market for domestic wheat grown on an area no greater than at present. It is obvious that fluctuations in the quantity and quality of the wheat harvest resulting from weather conditions may bring about wide variations in the ratio of imports to total consumption from season to season.

The obligations of the importing countries under this agreement are to be interpreted in the light of the following declaration:

It is recognised that measures affecting the area of wheat grown and the degree of protection adopted are primarily dependent upon domestic conditions within each country, and that any change in these measures must often require the sanction of the legislature.

The intention of this agreement is nevertheless that the importing countries will not take advantage of a voluntary reduction of exports on the part of the exporting countries, by developing their domestic policies in such a way as to frustrate the efforts which the exporting countries are making, in the common interest, to restore the price of wheat to a remunerative level.

ARTICLE 7.

The Countries participating in the Conference agree to set up a Wheat Advisory Committee to watch over the working and application of this Agreement. The functions, organization and financial basis of this Committee are set out in Appendix B.

Done at London, the twentyfifth day of August, one thousand nine hundred and thirtythree in a single copy which shall be deposited in the archives of the Secretariat of the League of Nations and of which authenticated copies shall be delivered to all members

of the League of Nations and non-member states represented at the Conference of Wheat Exporting and Importing Countries.

APPENDIX A.

(1) "International price of wheat" as mentioned in Article 6, paragraph (111) of the draft agreement, shall be understood to mean a duty free gold price c.i.f. on a world market.

This price shall be calculated according to the method followed by the Food Research Institute of Stanford University, California, (explained in Vol. 4 No. 8 of "Wheat Studies "). It is the average price of all parcels of imported wheat of all grades sold during each week in all the ports of Great Britain.

(2) The Secretariat of the Wheat Advisory Committee set up by the Conference shall undertake the regular communication of indices of prices calculated as above to all Governments adhering to the Agreement.

(3) The minimum average gold price calculated as indicated above to be maintained for a period of sixteen weeks before it will be necessary for importing countries to adjust their Tariffs shall be 12 gold francs per quintal (63.02 gold cents per bushel).

(4) The period referred to in Article 6 paragraph (iii) of the Agreement, during which the average quotation for wheat is to be maintained before it will be necessary for importing countries to adjust their Tariffs shall be sixteen weeks.

(5) Each country will decide upon its tariff adjustment in accordance with the principles enunciated in Article 6 paragraph (iii) of the draft agreement, and every considerable and lasting change in wheat prices shall be followed by an adjustment of Tariffs pro- . portionate to such change.

APPENDIX B. Report of the Sub-Committee on the Constitution of a Wheat Advisory Committee.

A Sub-Committee composed of representatives of Australia, Belgium, France, Germany, Greece, Hungary, Italy, Switzerland, the United Kingdom, and the United States, met on August 22nd to consider whether any and, if so, what organisation should be set up in connection with the prospective Wheat Agreements. Mr. McDougall (Australia) was elected Chairman.

The present Report contains a summary of the views exchanged in the Sub-Committee and the recommendations submitted by it to the

Conference regarding the functions, composition and financial basis of the suggested Advisory Wheat Committee.

It is clear that the proposed body can only be temporary in character, as the agreements under which it may be set up are intended to deal with the immediate difficulties of the situation. No question arises of establishing any permanent Committee entrusted with the task of supervising the production of and trade in wheat; it is simply proposed to set up a Committee to watch over the working and application of the agreements which may be arrived at. The Committee would be primarily advisory in character and would provide an opportunity for the representatives of Governments, fortified by the best available information, to review the way in which the several agreements were functioning. It would only take decisions in cases defined in the agreements.

The Committee's duties should be confined to the tasks outlined above, and should not extend to matters connected with the compilation of statistics, except as provided in Appendix A.

With the object of avoiding any overlapping the Advisory Committee should work in close cooperation with the Economic Organisation of the League and the International Institute of Agriculture.

As the work of the proposed Committee would be concerned with business rather than policy it should be small. It was recognised that the chief exporting countries, viz:-Argentina, Australia, Canada and the United States, should be separately represented, and that the Danubian Countries should be entitled to a representative, as would the U.S.S.R. It was regarded as essential that importing countries should be represented as well as exporting countries.

It was at first suggested that the importing countries might be represented by two or three members, to be named by the Economic Committee of the League of Nations. But it appeared from the discussion in the Sub-Committee that it would be preferable that the Committee should contain an equal number of representatives of importing and exporting countries. Subject to this it was agreed that the Committee should be given power to enlarge its membership if circumstances appeared to render such a course desirable.

Importing States to be represented might be selected according to one of two methods; either the importing countries participating in the Conference might make their selection while the Conference is still sitting, or the choice might be left to the Economic Committee of the League. It was felt that a decision on this matter should be left to the importing countries.

In any case the members of the Committee should be appointed as representatives of States, and not in their personal capacity.