Chapter 534: Good News

  Chapter 522 Good News

International food prices plummeted, and Austria’s domestic food prices were similarly hit, with food prices following suit.

Austria’s local food prices have always been lower than the international market, and this time they have finally come into line with the international standard.

Not only the price of food is falling again, other agricultural products prices are also following the fall. Capitalists have been trying to drag the market, but in front of the huge supply is still in vain.

With the turmoil in the international grain market, a large amount of raw grain has been dumped into the market, which has also impacted the export of finished grain.

Taking flour exports as an example, not only did the price drop by nine percent compared to the same period last year, even the total amount of exports shrank by four percent.

This was the aftermath of the Vienna government dumping old grains into Britain, and the British capitalists who got cheap raw materials worked hard to produce and crowded out the original market.

There was no way around it; flour could not be stored for long periods. The only way to disrupt the Anglo-Russian grain trade was to make an impact with raw grain.

Falling prices and shrinking exports made life difficult for companies engaged in the export of agricultural products, especially in the low-tech processing industry.

In the Austrian agricultural product processing industry, a huge industrial chain has also been formed. The number of industrial workers is more than three million, and the number of enterprises engaged in flour processing alone is more than 800,000 people.

This also involves tens of millions of farmers in the back, the grain processing industry is hit, will inevitably affect the new grain purchase.

Vienna Palace, Franz put down the information in his hands, picked up a cup of tea, light smoke rose, fragrant.

“It is necessary to stabilize the domestic market as soon as possible, the international raw grain trading price plummeted, the finished grain trading price will not take long to also plummet.

The capitalists won’t be able to hold out for long. In front of interests, not many people can remain rational, and the finished grain market won’t be stabilized for long.

The international market is beyond our control, so we don’t need to worry about temporary gains and losses, but we must stabilize the local and colonial markets.

Domestic food consumption is growing at a rate of nearly two percent, so as long as we can hold out for two or three years, when the wave of bankruptcies of farmers in European countries breaks out, we will be able to get through the crisis.

Still, the government must adopt a more active policy and not wait for the market to regulate itself. We don’t have that much time to waste, or the advantages we’ve accumulated in the early stages will be wasted.”

The main reason for increasing consumption is population growth, followed by economic development people’s incomes increase, and consumption increases with it.

Franz’s earlier proposal to absorb immigrants from European countries was actually a means of increasing food consumption.

Of course, the main purpose of absorbing immigrants was still for labor. The area of Austria’s colonies was already very large, and a large number of people were needed to develop these places.

Even for the most highly valued continent of Africa, after so many years of hard work on immigration, the total population of Austrian Africa had only just barely broken ten million.

This number was far from enough, and other colonies were even worse, as the population was so small that even the most basic development could not be done.

Minister of Agriculture Holes stood up, took out a statement from a folder, and walked up to hand it to Franz.

“Your Majesty, the Ministry of Agriculture proposes to raise the import tariffs on agricultural products to avoid the impact of foreign agricultural products on the local market; at the same time, it implements the minimum purchase price protection for grain and enforces the recommended guideline price for the domestic price of finished food products.

For the finished grain exporters whose interests have been damaged, the Ministry of Agriculture suggests that for the export portion, they be given a tax rebate subsidy to make up for some of their losses.

These are specific measures, and there are corresponding supporting programs. After the implementation of the plan, the sales price of local agricultural products will be stabilized in the shortest possible time.”

Raising the import tariffs on agricultural products was aimed at the Russians. In recent years, the Russian Empire’s food exports have only decreased, not completely disappeared.

Only this part of the grain did not directly enter the international raw grain market, but was sold to Austrian grain processing enterprises, and after the processing was completed, it was then sold on the international market, which also included the return sale back to the Russian Empire.

Austria was able to occupy as much as 70 percent of the international agricultural export market, which is not without the contribution of the Russians.

Now the Russian production capacity outbreak, Austria has been unable to eat, coupled with these years the countries crazy to increase food production, the international market oversupply, the Ministry of Agriculture naturally prioritize the protection of the interests of the country’s nobles, farmers.

The minimum grain purchase protection price is also one of the measures to protect the interests of farmers. Including the back of the local finished grain sales guide price, is also a part of it.

Simply put, it means that the government sets a retail price range for finished grains, and companies can only set prices within that range.

Before that, the Vienna Government had a maximum sales limit for agricultural products, and now a minimum limit has been added.

“Free market economy”, unfortunately Austria has a market economy, but not a free market economy. It is not the first or second time that the government has meddled in the market.

Of course, if it is not related to the international livelihood of the industry, the Vienna government is never interfere, for example: handicrafts, luxury goods, that are very free.

After a first glance, Franz nodded and shook his head.

“The latter plan is good, but raise the import tariffs on agricultural products can not be implemented for the time being. If we raise the tariffs, the Russians will surely take countermeasures and raise the tariffs on Austrian industrial and commercial products.

It is enough that this storm is confined to agriculture, and the consequences of spreading it to other industries will be more difficult to control.

We could limit the enforcement of the minimum purchase price of grain to the local, new grain of the year, and the rebate subsidies to companies to products made from local grain.

In order to avoid enterprises from fraudulently obtaining subsidies, once they apply to receive the tax rebate subsidy, they are prohibited from purchasing foreign agricultural products for six months.”

Franz remembers that one of the major reasons why Germany and Russia flipped out in the original time was because of the tariffs on agricultural products. Of course the situation is different now, and the Russians don’t have the backbone to flip-flop with Austria.

It just doesn’t do any good to aggravate the conflict, even though the market in the Russian Empire isn’t great because of the poor economic development, it’s still an important sales market for Austrian industrial and commercial products.

Moreover, the Russian-Austrian alliance has not collapsed, the trade agreement signed by the two countries is still valid. Unless the contract is broken, or raise tariffs is a joke.

Within the scope of the agreement, it is clearly stipulated that each increase in tariffs shall not exceed five percent of the original rate, and the same commodity can only be adjusted once in three years.

The Russian-Austrian tariff on agricultural trade was four percent, and a five percent increase on that rate would be 4.2 percent. With such a small increase, Franz might as well not have adjusted it.

The fact that the Tsar’s government raised the tax on Austrian industrial and commercial products several times did not change the fact that Austrian goods filled the shelves of Russian stores speaks volumes.

Within the bounds of the treaty between the two sides, there was not a single commodity on which the rate of duty could exceed ten percent, and most of them were only a few points.

It was easy to cross over, and that was to break the treaty. How could Franz voluntarily break such a treaty, which he had managed with great difficulty to persuade the Russians to sign?

In this respect, the Minister of Agriculture’s view of the big picture still left something to be desired. But this little problem, Franz very generous tolerance, technocrats can not ask too much.

Other abilities Hölls showed average, but in the field of specialization is very good. In his presidency of the Ministry of Agriculture these years, Austrian agriculture has qualitatively improved.

Optimization of the structure of the agricultural industry, the promotion of new agricultural technologies, the improvement of the agricultural industry chain and so on, are all done under his auspices.

Now Austria’s agricultural overcapacity has a part to play in Holls. Of course, this cannot be blamed on him. It is too difficult to change farmers’ planting habits when they can still make money.

This agricultural crisis in the original time and space lasted for more than twenty years, pushing one farmer after another to break their production before they were able to regain their balance, and the difficulty involved could be imagined.

Growing cash crops is also not a matter of words, but also of being able to guarantee a return. Unfortunately, due to the opacity of market information, no one can make this guarantee.

Austria is not a planned economy, farmers are what they want to plant, what they plant. If there is a shortage on the market this year, there is a risk that next year it will rot in the ground and no one will want it.

In contrast, grain is still a solid product. Maybe the return might be a bit lower, but not so much that it’s blood money.

After pausing for a few moments of effort to digest Franz’s words, Colonial Minister Stephen took out a document and handed it to Franz.

“Your Majesty, gold mines have been frequently discovered in the South African region in recent times, and these discovered gold mines are quite astonishing regardless of their quality, or reserves.

This is a report submitted by the Governor of South Africa, Viscount Fikeni, and the preliminary judgment is that this is a gold mine group that is even larger than West Africa, and the reserves are likely to exceed those of the United States.”

This is good news, Austria lost the battle for monetary hegemony, and the lack of gold native gold was a major factor.

How rich the South African gold reserves, Franz naturally knows it all. Knowing is knowing, but what is said, things are not explained clearly.

Austria’s religious atmosphere is already very thick, Franz does not want to give the church to continue to create momentum. Reborn for so many years, he didn’t show any cracks, relying on caution.

Anyway, the gold is buried in the ground and can’t run away. South Africa are occupied, these gold mines will be discovered sooner or later, and in the end will still flow into Austria.

In fact, Austria’s gold edge is also very good, almost every colony has gold. It wasn’t specifically chosen by Franz, it was entirely reality that drew Austria’s expansion in that direction.

When initially expanding the African colonies, Franz did not expect to have today’s foundation. If it is not the European countries do not pay attention to the African continent, how can cheap Austria.

Expansion to the South Seas is a complete accident, unexpected success; Central American colonies exist only to interfere in the Civil War, can have today’s scale, the same beyond Franz’s plan.

Before the action, Franz did not know that those small countries in Central America, so scum.

Originally he only intended to borrow a landing place, the result of accidentally from the United States to lure a group of German immigrants over, directly on the opposite side of the host.

Of course, this argument is expected to be unconvincing to those few small countries in power. People a country only a few tens of thousands of white people, the army from are not more than a regiment, with what to resist Austria?

Alaska, not to mention, can be regarded as the Russians hard stuffed over. This is true if you ignore Franz’s secret PR.

Austria’s development to today’s point, in addition to effort, the component of luck is also very important. Franz could only sigh that reality was full of legends.

Picking up the documents and flipping through them, there were no surprises. The historical mission of the two republics, the Transvaal and the Orange Free State, had come to an end, and could now return to Austria’s bosom.

There was nothing wrong with that, the local populace had turned into supporters of Austria. The republicans probably might have gone to God, what exactly was going on, the top of the report didn’t say and Franz didn’t know.

“When you’re ready, let’s stage a farce and get these two republics dissolved! Since we’re going to develop the South African region, we can’t keep them in the way any longer.”

Franz was being facetious and wouldn’t do anything to directly annex a sovereign state. If the Transvaal and the Orange Free State were dissolved, and the local populations returned to Austria’s embrace, then nothing would be a problem.

This was a problem that Franz believed Viscount Fikeni could handle. After such a long time, the local powerhouses, if they hadn’t gone to meet God, must all be their own people.

Even if there was a mess, it wasn’t a problem. This year, the African colonies were very chaotic, and it was normal for any accidents to happen.

……

(End of chapter)