LOCAL MARKETS

Ashburton Guardian, Volume 55, Issue 291, 21 September 1935, Page 3

LOCAL MARKETS

THE DAIRY INDUSTRY.

POOLING SYSTEM ADOPTED.

NO PRICE-FIXING SCHEME.

(Per Press Association.)

WELLINGTON, September 20.

With but one dissentient voice, the Dairy Board’s Dominion conference adopted comprehensive proposals put forward by the board for controlling the sale of dairy produce lpcally, and for preventing a continuance of the uneconomic and chaotic conditions which have been a feature of marketing in New Zealand for years. Under the board’s local marketing scheme, distributors in New Zealand will act solely as agents of the board, under whose jurisdiction all produce will be handled. The selling of inferior brands of butter, which has been a feature in the price-cutting tactics of recent years, will be stopped, and only two grades of butter will be sold —finest quality creamery and whey butter. The present multiplicity of brands will be eliminated, and consumers will receive nothing but best quality. Seeondi-grade butter and cheese will be exported' unddr the board’s jurisdiction and put through special manufacturing channels in England which will prevent them coming into competition with New Zealand’s finest grade produce. Provision will be made for a, supply of bulk butter in New Zealand for genuine manufacturing requirements, but otherwise the -sale of bulk butter will be eliminated.

It is an open secret that for some considerable time past whey butter and mixed good and inferior butter has been sold in a misleading way in New Zealand, but under the new scheme this practice will become impossible. The board has no intention of endeavouring to fix the price at which retailers in New Zealand shall sell their butter..

The adoption of this comprehensive plan, following the almost unanimous adoption of the board’s recommendations regarding the group marketing of produce to be sold overseas, makes the conference itnique irr the history, of the industry. On no previous occasion has such a degree of unanimity been reached by the industry upon two major marketing problems, and at the conclusion of the debate several striking tributes were paid? to the board, first for the soundness of the scheme, and second for the manner in which its deputy-chairman, Mr C. P. Agar, had presented the proposals.

Industry Divided. Up till now the industry has been divided on the local marketing question as to whether there should be one national pool, or separate pools tor the • North and South Islands. ln<? South Island in the past always fought strenuously for two pools, and has, m fact, indicate that it would not agree to any scheme that did provide tor separate pools. When the industry went to Parliament some tune back for legislative authority to nandle local marketing, it agreed to two separate P °At the outset of the discussion it appeared as if the pool question might

divide the conference, but eventually a compromise satisfactory to bo i North and South Island delegates was reached. This compromise was made possible by an opinion which the Dairy Board had obtained fr6m the Executive Commission of Agric-ultuie prior to the conference, the effect ol which was that, in its opinion, theie should! lie two pools unless general agreement could be reached by an alternative. The alternative suggested by tne Commission mw: .“Ascertain for oacn

vea r the respective percentages oi butter production for each Island, an allow to each Island separately the relative percentage of the pool accumulations effected if such accumulations do not exceed Id per lb. , , “For example, if the South Island local consumption is 56 per cent, of the total South Island manufacture and the North Island local consumption is 11 per cent, of the total North Island manufacture, and the accumulations are Id per lb, South Island factories till receive .564 per lb on the,r tow. manufacture, and North Island fac Tories will receive .lid per lb on tpeir total manufacture. If the accuinnations are less than Id per lb the South Island factories will receive ob per cent, and the North Island factories 11 per cent, of the fraction oi one penny represented by the accumulation If accumulation exceed Id per lb the first Id per lb will be disposed of' in the manner above set out, and the surplus will be divided on a Dominion basis, i.e., it will be apportioned to all factories m the Dominion in ratio to their total production. Merits of Scheme. “The merit of the alternative system we have suggested is that it enables the South Island to obtain a reasonable allowance to compensate it tor its higher costs of production, ancl at the same time it enables the North Island to receive bn a Dominion basis its full share of excess accumulations (accumulations above Id per lb) that can be said to be the direct resort ot the adoption of a rationalised scheme of local marketing of butter. Mr Agar, who presented the scheme to the conference on behalf of the Board, said that although he had 25 years’ experience of local marketing, until he visited various centres in New Zealand with the Board he had never dreamt of the chaos which existed. It

was a shame, and it would be criminal to allow it to continue. The Board was unwilling *o accept responsibility for any scheme other than the one it was certain would be successful, and it was satisfied that nothing short of control by the Board would meet the position. The scheme was similar in some respects to the group maiketing scheme the conference had adopted the day before, for under it some of the present agents would be appointed as employees of the Board to handle butter and cheese on the local market on behalf of the Board. After the case had been outlined

fully and many questions nnsueied the*conference voted in favour of the scheme by 59 votes to one.