NOVPUBThe changes in the grain futures market directly affected the price of grains, as capitalists unanimously raised prices.
This price increase was limited to transaction prices; the purchase price of grains remained largely unchanged. It takes time for the influence to move from the downstream market to the upstream market.
Raising the transaction prices of grain was essentially about making a fortune. Since last year, the long-term slump in grain prices had severely affected everyone’s interests.
An improvement in grain prices did not have substantial significance; the issue of excess production capacity had not been fundamentally resolved. It was merely that capitalists wanted to take the opportunity to make a quick profit to offset their losses during the agricultural crisis.
Franz did not feel optimistic. If the ones managing the market were grain capitalists, then maintaining high and stable grain prices was most in line with their interests for their own gain.
Unfortunately, among Europe’s three major grain futures markets, even though Austrian grain capitalists were relatively strong and had some say, the markets in England and France were dominated by financial capital.
Even Austrian grain capitalists did not have the strength to manipulate the market on their own, not even with the combined capital of related agricultural product processing industries.
The same went for England and France, where, unless the entire real economy’s capital banded together, the futures market would always be the territory of financial capital.
Quick profits were always the best pursuit of capital. Settling down to conduct business wasn’t the goal of financial capital, which meant the grain market could collapse a second time at any moment.
Now everyone was working together to drive up the price of grains. Once the price rose enough and had attracted a sufficient number of speculators to take over, doomsday would arrive.
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At Vienna Palace, Franz summoned Minister of Agriculture Hols.
"Grain prices are recovering, but the problem of overcapacity remains unresolved. The Ministry of Agriculture’s task will continue to be reducing production.
Don’t worry about there being insufficient grain; even in the event of emergency situations, we possess enough strategic reserves for emergencies."
The government cannot casually interfere in the market, and the futures market—this international capital betting game—is not something the Austrian Government can intervene in unless the governments of England, France, and Austria intervene in the market at the same time. Otherwise, it would only cause side effects and lead to greater losses.
Affected by the agricultural crisis, Austria also faced grain overstocks. The government’s minimum protection price policy quickly purchased a large batch of grains.
The Vienna Government itself is a major grain consumer and isn’t worried about storing too much grain. Government agencies, schools, and the military—together they account for several million people who need to eat.
Influenced by Franz, the government had long been accustomed to storing grain. Apart from satisfying its needs, it usually bought in when grain prices were low and sold when they were high.
Of course, this was only in normal times. After the full outbreak of the agricultural crisis, the Vienna Government didn’t dare to continue buying freely. Continuing to do so would indeed risk bankruptcy.
Minister of Agriculture Hols: "Your Majesty, we’re planning an agricultural summit, inviting major capitalists and large farm owners from the agricultural field in Europe to participate. By uniting everyone’s efforts, we can work together to stabilize grain prices."
Franz was taken aback but then understood the rationale. Such moves were standard operations, as the top agricultural product exporting nation in the world, Austria couldn’t possibly be passive in the face of an agricultural crisis, right?
It’s important to note that before the agricultural crisis erupted, Austria held the pricing power in international agricultural product trade.
The Russians didn’t play by the rules and started bundle loan sales with the British, breaking Austria’s monopoly on pricing power, which led to a steep decline in grain prices.
After this wave, capitalists naturally realized the terrible consequences of this rule-less competition, and regrouping became almost inevitable.
The Ministry of Agriculture’s plan for this project was probably also undetachable from the influence of capital. It could be the aristocracy involved in agricultural production or capitalists in related fields who might have been the movers behind the scenes.
Knowing this was one thing, but Franz had no intention of delving further. These occurrences were inevitable. There were numerous ways for capital to influence government decisions, and often times, the people involved didn’t even realize they had been swayed.
"It sounds promising, but how will it be enforced? Even if a lot of achievements are reached at the agricultural summit, how effective can they be without binding power?
If this issue isn’t solved, it would be better to find a way to increase tariffs on raw grain trade, adding to the costs of competitors.
Interact more with the large farm owners; I believe they would share this interest. Encourage them to mobilize the broader farmer populace to pressure the government together."
This idea was quite crafty, particularly detrimental to countries with lagging industries. Perhaps, ultimately, it might turn into levying tariffs on all agricultural products.
However, Franz was not at all concerned that the affected would simply be the primary processing enterprises with lower profits. While there would be some impact on Austria in the short term, in the long run, it would aid in further promoting industrial upgrading.
One can’t expect to mill grains for a lifetime, right? Those enterprises with little technical content and unwilling to progress were bound to get squeezed out of profitability.
If new products with higher added value weren’t developed, such low-tech, stagnant processing enterprises wouldn’t survive long in this harsh world.
All these were merely surface issues; without other kinds of benefits, this would be a tactic of harming oneself as much as the enemy, and Franz would certainly not resort to it.
Rising grain prices would most affect industry, as inflation forced businesses to pay higher wages, or the workers wouldn’t be able to survive.
This was Franz’s ultimate goal. Although such impacts might not be apparent in the short term, as tariffs on agricultural product imports increased over time, the consequences would emerge.
The exorbitant cost of labor would turn labor-intensive enterprises unprofitable. For greater profits, capitalists would inevitably invest their funds into the more lucrative financial sector.
In the original timeline, it was the French who first couldn’t hold up. After the Franco-Prussian War, without government suppression of capital, France sped down the irreversible path of the Usury Empire.
The British were quick to follow suit, crippling their own military capabilities. Otherwise, during World War II, the German Air Force wouldn’t have been able to wreak havoc over the skies of the British Isles, not to mention relying on submarines to blockade sea transport.
Faced with the uncomprehending Minister of Agriculture, Franz offered no explanation. Such obscure tactics were not something that could be clarified in a few words. Should any details leak out and put other nations on guard, it would be rather unfavorable.
It would be inconsequential once the events transpired. The government could lower tariffs and see if the domestic farmers would agree.
Even if enforced by force, could they really expect capitalists, who had tasted the sweetness in the financial sector, to look back?
Those who hadn’t tasted the sweetness needn’t even be considered; unlike the tangible economy, losing everything in finance was a common occurrence.
Profits were exorbitant, and the losses were real silver. Wealth was but a number; a billionaire today could be on the rooftop tomorrow. Such events happened periodically in the financial centers of London, Paris, and Vienna.
Underhanded tactics aside, production still had to be reduced. Opening the window and looking up at the sky, Franz added, "These can be done covertly, there’s no need to let everyone know.
The focus of the Agriculture Department should still be on finding ways to reduce grain production capacity and promote the planting of cash crops. The government can encourage enterprises and farmers to sign planting contracts to put their minds at ease.
In some regions, the agricultural cooperatives set up by the nobility are also a viable method. Unified planting on a larger scale strengthens their position in negotiations with enterprises.
The government can promote the establishment of similar semi-official agencies, or purely civilian ones. Let the public decide whether to participate, and let them elect their own management."
Agricultural cooperatives are not a new thing; across many areas of Europe, such mutually beneficial organizations already exist.
It was only after the abolition of serfdom and the land revolution that they truly developed in Austria. The initial goal wasn’t mutual aid; rather, the nobility wanted to maintain local influence, so they established these organizations.
Even now, they are not open to just anyone. The vestiges of feudalism are everywhere, and only vassals of the cooperatives or former serfs are allowed to join, rejecting others.
Especially after the onset of the Austrian colonial era, when nobles swiftly raised private armies through this model, practically all the Fief Aristocrats realized the importance of "agricultural cooperatives" and promptly took action.
Indeed, such private armies, known through and through, proved much more reliable than hired mercenaries.
The African Continent is no easy land, especially after wealth is acquired. Betrayal and treachery are daily occurrences, and there are widespread tales of mercenaries killing their employers.
Perhaps due to loyalty, or because one can run away from the monastery but not from the church, Franz had not heard of any nobility being overthrown by their private armies.
Loyalty isn’t free; to demand someone risk their life, there has to be compensation. Winning hearts during normal times is essential.
For example: during the grain purchasing season, nobles leading the cooperatives would negotiate with merchants, or directly organize the transport and sale of grain to avoid being undercut.
Or take for instance: promoting agricultural cultivation techniques, mediating civilian disputes, and occasionally moonlighting as emergency lenders.
The old nobility did better in this respect, having long been full, cleansed, and bothered to risk their reputation lightly.
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Luckily this is the European Continent; otherwise, with these fellows’ practices, they would have lost their heads long ago.
Franz had even considered whether to kick out these feudal remnants, but then, remembering he was one himself, he chose to turn a blind eye.
If it’s about winning hearts, so be it. Since it’s all happening within their domains without unwarranted interference or thoughts of rebellion, Franz preferred not to meddle.
With these individuals overseeing localities, they could maintain peace and order; at the very least, mountain thieves, bandits, and members of the Revolutionary Party were taken in exchange for military honors.
Indeed, capturing members of the Revolutionary Party in Austria was considered a military merit, and Franz left no stone unturned in combating these rebellious elements.
Harboring or sheltering members of the Revolutionary Party, then sorry, no matter who it was, they couldn’t expect an easy time; it was merely a question of how one would die.
Ex-post facto was still fresh; the aristocrat exiles consigned to the Arctic Ocean had the most say. Of course, if technology advanced a few centuries later and could revive those frozen in ice, perhaps they’d have the chance to accuse Franz of his tyranny.
In addition to the organized ones, there were naturally the unorganized. Since these organizations had positive effects, Franz naturally didn’t mind promoting them.
Adjusting the agricultural structure was too difficult to persuade the vast majority of farmers. Forcible implementation by the government would only make things worse.
Preventing farmers from growing grain, they had to be told what else to plant, right? Franz really couldn’t trust bureaucrats with this kind of thing.
Bureaucrats could slap their butts and make decisions off the top of their heads, then walk away; afterward, whether the cash crops planted could be sold, nobody would know.
This consequence is more severe than surplus grain production. If the grain can’t be sold, at least it can be kept for self-consumption, ensuring the farmers won’t go hungry.
If cash crops can’t be sold, they can only rot in the fields. Enduring a complete loss for one year is bearable, but if it continues for several years, the dreadful consequence makes Franz shudder.
Minister of Agriculture Hols didn’t oppose the establishment of agricultural cooperatives; there had been numerous successful cases which indeed benefitted agricultural production, and it was just a matter of replicating those successes.
After some reflection, Minister of Agriculture Hols replied, "Yes, Your Majesty."
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