MEAT POOL.

Auckland Star, Volume LII, Issue 303, 21 December 1921, Page 9

MEAT POOL.

HOUSE FAVOURS PROPOSAL ' XTTRTHER IMPORTANT FACTS. CONTROL RIGHT THROUGH. (By Telegraph. -Parliamentary Reporter.) WELLINGTON, Tuesday. The niP.it pooling proposals were dis- ' cus?eJ in the Ilou.se to-day, opinions ' generally being favourable, although . gome resentment was shown over the 'failure to consult any Opposition member? until the Government decided to announce the general 'outline of the proposals. The d'Hcnwion was opened by Mr. T. M. Wilford, Leader of the Opposition. who snid that a good deal of information had been sought by members recardinsr the conditions under which Xew Zealand meat was marketed, for fhM w a s the most important question hefore the country. The Premier . had indicated his desire not to make a party question of the matter, but he lias not taken the Opposition side into his eminence as was done before the moratorium proposal* were introduced., However, he hoped he was a bigger man than to treat the proposal* as a party irmttrr beenuse of the method of introdwtion. There was nnthir.g more important than the necessity of securing! • a !>nm!nio7i scheme for marketing New j 'Zealand produce. ITp was prepared to help fhr Premier to the full extent of hi-; nbility, but he wished the Government to jive the House a great deal uinrr mfrrmntinn thin \vu available nt presert before it ;:.-k"d Parliament to approve tTie scheme. The first point he wished to know about was the duration of th" scheme. Would it be for ten yeaer-? Mr. Ma=-cy: .A* Ions; as necessary. Mr. Wilford: That a'.?o is indefinite. Mr. Wilford also wUhed to know if it was to be district pooling or shipping pooling, afeo whether payment ■•vrnnM he made on the hook or Otherwise What would be done in regard to well-known brands which had established themselves in the Heme market? How would the - pooling affect proprietary concerns ' which bought in New Zealand and had. an extensive distribution system? Then ~ who was the man to run the pool? He ■ w 'j thnnjrht the Premier far too busy to EjJ* attend to the matter. It could be done on similar lines to the Bank of New !■"■', Zealand, which was run by experts ■:'■.,-having knowledge of their business, U: iavinc associated with them representatives, of the Government. It wae inevitable that the Government would have to back the scheme financially. There wae also the question of insurance to be considered. Then the local consumer ought to be considered, and no higher charge should be made for local meat than the London parity, lees charges. Would there be any protection for farmers who sold on the hoof? He hoped that public abattoirs would not . be interfered with. He urged the Premier to consult representative men from every district. The scheme ■should not be dictated by the large landowners, but stock companies and all interests associated with producers should be consulted. He wished to know if it vrae proposed to have cool stores in England from which retailers could draw supplies, or whether the meat would be ■' placed in the hands of the usual wholesale agents. He wished the scheire ivell with all his heart, but it must be •tackled in the most thorough fashion. If it became successful it would give a tremendous lift to New Zealand. A NON-PARTY SCHEME. Mr. D. Jones, chairman of the committee which has considered the pooling scheme, expressed gratification at recognition by the Opposition Leader of the fact that the scheme was a nonparty one. "* Members: What about that committee? Mr. Jones: It was a purely unofficial committee from our side of the House to advise the Prime Minister. It comprised Messrs. McLeod, Glenn, • Hawken, A. Hamilton, Bitchener, and ■ myself. "Members: They arc all from one side. Mr. Jones: Yes, 'but the Government's policy always comes from the Government side of the House, and any recommendations we make go to the Prime Minister. If he adopts them he was the right to choose those who advise him. Mr. Jones went on to declare that the present position of the meat industry was so unsatisfactory that it could not continue. The scheme provided for continuance throughout 1022. and for such further period as would be determined. Owing to the fall in meat last year farmers commenced to consign on their own account, and the result was that to-day they had the spectacle of a multitude of weak holders endeavouring to place their meat. The scheme would give producers a say in fixing the price instead of defeating this object through the operations of the very farmers whom it was desired to benefit. Advances to farmers for meat on the books would foe one of the details to be settled. Brands would not cause much difficulty, because there were recognised qualities associated with these brands. It would be essential to grade up to a high stanr dard. Proprietary companies would not 'he prevented from freezing. It was necesaarv to have the goodwill of the •whole of the producers, therefore they lad the right to be consulted. MERCANTILE FIRMS' ATTITUDE. Mercantile firms, continued Mr. Jones, had met the committee, and if their attitude SO far was any indication, then they were going to get the wholehearted support of that interest. Mercan- ■ tile farms were anxious to pool the meat of their clients this season, and would be glad to co-operate with the committee, because they recognised pooling was an advantage. As to -whether stock companies should be consulted in connection with the advances made to their clients, it must be recognised that where a farmer had certain obligations to firms which had made advances to him ordinary trading conditions which had prevailed for years must operate. Insurance was a matter which had been dealt with under commandeer conditions, and this -would easily fall into line with the new scheme. THE CONSUMER. Mr. Jones readily admitted that the interests of the local consumer had to be consulted. The scheme would not stop any public auction of stock on the hoof for local consumption, and he did not think the consumer in New Zealand need have any worry. If there was any ground for complaint the consumer, through his butcher, could be dealt' with in the same way as during the shortage of meat when the commandeer was operating, when the local butcher could take supplies at commandeer prices. The primary producer was in a worse position that the wage-earner, and a year ago when State subsidies were

paid to cheapen bread and butter producers were obliged to pay Arbitration Court awards, yet they had no control over the price of their produce. He ■believed they would have the support of the common sense workers, who recognised that if the farmer went down they went down with him. He did not anticipate strong opposition from the freezing companies. They would recognise that they must take a broad view and join hands to save a great industry. It was fortunate that the machinery of' the Imperial Supplies Department was still existing, and he had sufficient confidence m mercantile firms and their London agents to believe it would be infinitely easier for one organisation to market New Zealand produce than for a thousand farmers to work against each other. Supplies could be controlled from this end, and this would 'be valuable, particularly r.cxt season, when the position would be worse. Another advantage of pooling would be that they could keep off the market supplies of heavy mutton which were likely to go forward even witihin the next few weeks. If they placed on the Home market supplies of heavy meat for which there was no demand this would depress prices, and make it impossible to secure a profitable market for the next twelve months. They could hold heavy meat in New Zealand, and at 5/ a head it wouM not be a heavy financial proposition to hold it until the market improved at the other end. Lamb would have to go forward, and he was strongly of opinion that in view of the drought in the Old Country and the consumption going on at the present rate that there would 'be a great lamb market next year. If they were going to sell their meat at the lowest price to-day, and if any rise in price for lanib took place next year the whole of that rise would go into the hands of exporters, and not into the hands of the producers. There was never such a favourable opportunity of considering such a proposal. Values were down to bedrock, and it was a golden opportunity to eliminate the farmer competing against himself and others in London: it would do away witih the multiplicity of markets a.«d improve the dispatch of shipping. THE FINANCIAL SIDE. He realised that finance was the prime factor. The committee, after discussing this question with the banking authorities, believed that a system of finance could be arranged. There had been a system of Government guarantee of fruit shipments, the grower being guaranteed a penny per lb, which i enable the banks to make advances against shipments. There was nothing safer in the world than the system of Government guarantee in connection with such a commodity as meat, and money could be obtained at a cheaper rate "in England than in New ZealandHe believed that a similar scheme of control to that which eperated in, connection with the 'Government's association with the Bank of New Zealand would be suitable for the operation of the meat pool. The Government «•« a partner in every farm in New Zealand: it could not afford to let the producer down, and thus a system of Government guarantee was absolutely justified. He was pleased that the Premier had taken up the scheme. It wae a proposal of great magnitude, introduced at a time when heroic measures were needed. If the producers .adopted the scheme it would place the industry in the hands of the producers, where it ought to be, and he had sufficient confidence in the business capacity of farmers to believe it could be carried through to a successful issue. THE SECRET PRELIMINARIES. Bitter complaint was made by Mr. Witty that members of hie side of the House had not been taken into the confidence of the Government and participated in the preliminary deliberations on the scheme. Why, he asked, was the matter not discussed before the Agricultural and Stock Committee. 'Mr. Nosworthy: Because it was a Government policy measure. Mr. Witty: Weil, why do you -wish us not to diecuss the proposal adversely but to assist in getting it through if it is one of policy. If the idea was not carried out must not the Government allew other.companies to come in and buy. ■A voice: Are you in favour of the big trust coming in? Mr. Witty: "We are making ourselves a big trust." He agreed that multiplicity of branding wae prejudical to export, but forecasted parochial feeling in connection with the universal grading scheme. He asked what was to become of the offal. I>f only the carcase was being pooled the producer would still be at the mercy of the freezing companies. In hie last few minutes he objected again to the party conclaves in which the Opposition had been ignored. Mr. Massey: Would you come to a party caucus if I asked you? SIGNIFICANT FIGURES. Mr. McLeod said that the responsibility for the failure or success of the propoeal rested with the Government. It was a difficult position, because it was ridiculous to assume that one could easily interfere with institutions which had been gradually built up over a long period. Producers were in a very difficult position to-day. He knew of properties carrying £8000 to £9000 Government valuation absolutely free of mortgage which only produced sufficient to pay land tax, local taxation, and a few hands, leaving nothing for return on capital. The alternative to a pool was to open the door to the outeide speculator and the trust. Disaster faced the producers unless they could .get improved prices for their produce. He was sure that 20,000 mcO workers could be employed on the land if prewar prices could be obtained. To take the best export product we possessed which was lamb, the London receipts from the export of 100,000,0001b would total £3,125,000, but the cast of freezing and getting to London was £1,300,000, leaving to the producer .£1,825,000, or roughly 55 per cent. The position was much worse with inferior qualities. It was estimated that on an export of 100,000,0001b of inferior meat the London value would be £1,650,000. but charges would be £1,200,000, leaving only £450,000 to the producer. SOCIALISM FROM REFORM. Mr. 'A. T. Ngata contended that the procedure adopted by the Government was a perfectly legitimate one and the scheme an excellent one. There was a good precedent in the Bank of New Zeafand legislation, and he felt when the Premier outlined his proposals that at last he could see light in the problem of marketing our meat. However, Jie questioned the genuine nature of the motive behind the proposals. They had emanated from the most Conservative eide of the House. What a great pressure must have been brought on the rank and file of the Reform party to approve such a big scheme of State interference. Was it an emergency measure, to be kicked over in good times? Were they really going to

make an honest attempt to control meat from the time it left the producer in New Zealand till the time the consumer received it? The rough draft of the scheme stopped short when the meat reached London. Wae it proposed to retail meat at Home? Control the whole way through was the only satisfactory method. The Labour party would probably contend that this would eliminate the middleman. Mr. Parry: We are going to ask that. Mr. Ngata: "Well, it its not going to; the middleman is being handled with kid gloves." His own view was that the only way was to make it a compulsory pooling. All the logical effects of compulsory pooling were to eliminate the middlemen. The people who financed farmers and controlled the eale, the merchant and hanks would all want their "cut" out of the pool. He did not think the scheme would succeed a<3 it ought to without the co-operation of the Australian states. New Zealand was too small to move the world. Mr. Massey: We are the biggest cxportere of mutton. Mr. Ngata contended that the more co-operation that could be obtained in regulating not only meat but wool, butter, and cheese the better it would be for the Dominion. He asked how long would intervene between the advance on meat that went into the pool and the final settlement. s^ Mr. Massey replied that he did not think it would be long, and that an advance up to 00 per cent could probably be made. He added that no dTfticulty would be experienced in the disposal of the meat. The people of New Zealand had employed 20 firms, who had kept their connection right through the war, therefore the Meat Board would have no difficulty. In conclusion, he hoped the scheme would become a permanent one, when it should have wholehearted eupport. Mr. Holland described the proposal a« the utter breakdown of private capital ism and a drift towards socialism, an economic inevitability. He had to regard it from the aepect of the primary producers, his interpretation of which wa/3 the wage earners. The pool could only be regarded as a etopgap, not a solution of a serious problem, but the T-abour party would eupport it because it would assist a section to tide over disaster which threatened the primary producers and incidentally other workers. If it was propoeed to set up a board to control the scheme, Labour would demand that the employees had a representative on it, elected by themselves. Another demand wou'.d be that the pool should not enhance the price of meat to the New Zealand consumer. PREMIER'S COMMENT.

After reading to the House details of the meat pool scheme as far as they had been arranged, Sir. Massey r%marked that during the discussion a good suggestion had been nrade by the member for Gisborne that a reserve fund should be created. He thought it would be reasonable to set aside, say, 21 per cent, which would soon run into a considerable sum. This would be available for use in the event of any serious loss. The freezing companies would charge the board a consolidated charge for slaughtering, bagging and all expenses

to place free on board, then handing the ' documents to the Board of Control. FINANCIAL ARRANGEMENT. ! There is no question, continued Mr. Massey, that the advance to be made is the most important part of the whole scheme. I do not anticipate serious difficulty in-arranging finance. I would not mislead the House by saying that | arrangements have been definitely made, ' but the negotiations have commenced. The time may come "when it may be necessary to make use of cool storage in this country to keep back part of our export of meat, supplying the British market with quantities as required. That is the time when we shall require strong and substantial finance, because the producer of meat cannot afford to go on without receiving money on account, and we shall be called on in future to provide a very large sum. T am encouraged to that we shall be able to arrange ail the finance we require, either in this country or out of it. I cannot- give further details of this. ' at present. ! STOCK AGENTS. The Premier went on to suggest that the scheme ought not to affect stock and station agents, except for the good, i These firms had able men associated with them, and the Government would . be glad to have their assistance and the ' 'benefit of their experience, because in those firms were some of the ablest men in the country so far as that class of business was concerned. He had been ! asked how would the proprietary freezing concern* be affected. They would ' have to go into the scheme. The legiti- 1 mate business of a freezing company ' was to slaughter for the public, it was not part of their business to speculate in meat, and if the scheme came i into operation there would not be much speculation. There might be some loss on the operation of the scheme, tat it would in any event be small. The result of our experience with the commandeer would enable loss to be avoided. There should, however, be something in the way of a reserve fund to meot any sudden demand which might come along. The administrative cost under the Imperial commandeer was 4Ad per 1001b. Mr. Lysnar: The producer pays 3 per cent now; it will cost them less under the new scheme. Mr. Massey, in conclusion, declared: "We have put our hands to the plough, and there must be no turning back."' DETAILS OF THE SCIIEMS. BOARD OP CONTROL'S POWKRK. (By Telp-rni.h Pross Association.* WKLUNIfiTOX. Tuesday. Details in connection with the proposed pool for the marketing of men.t were given in the House of Representatives to-night 'by the Prime Minister as follows: — A Board of Control to 'be established in Xcw Zealand, consisting of, say, a representative of the various interests involved: (a) To direct and control all export sales and the shipment of New Zealand frozen meat of the 1921-1f»22 season's output, and for sui-h period thereafter as shall be determined.

(•b) To take control of all meat derived • from stoc-k slaughtered for export as Isoon as it is placed in the freezing chambers in good and meehantable order and condition and graded as required by the board, which may from time to time, as it considers desirat>ie, decide as to any class o r classes of such meat which it will not accept as suitable for export. ! (c) The board from time to time to assess the net value of meat Helivered to the store at the works, the Government, through the board, to advance to the owner a percentage, to be agreed ■upon, of such net value with recourse , against the person to whom such advance is made, and in addition to advance su'eh sums as will cover charges for slaughtering, freezing, 'bagging, railage, freight, insurance, exchange, and all overseas storage and selling charges, takinrr as security store warrants, bills of lading, or other documents of title, all 'by-products to remain the uncontrolled property of the owner of the stock slaughtered for export, who may ! make such arrangements as he thinks ! fit with the freezing companies or others in regard to the same. (d) The board to make sales of meat f.o.b. or c.i.f., or to consign meat for isale overseas at its discretion according to -what it considers to be in the best interests of the producers. ' (c) To negotiate freight contracts and ,freight arrangements for the overseas carriage of frozen meat, no contract to •be entered into until approved by the ! Government. I (f) For the purpose of handling the board's bi.'siness in the United Kingdom jan associated board with manager, shall 'be appointed in London, the London board to be in all matters directly responsible to the board in New Zealand, I wit" a provision that all its accounts will be subject to audit by an auditor or auditors appointed by the New Zealand Government through the Iligh Commissioner. ! (?) Actual cost of management and administration, including , salaries of members of both boards to 'be paid out of tile business. J (h) All meat placed in each class in ■ the schedule shall btj pooled in si.eh parcels as the 'board may determine from time to time, and the net proceeds of the sale of each parcel shall be divided pro rata among the owners, whose meat is included in such parcel. J (i) Freezing companies to make a consolidated charge, to be agreed upon, to cover all working costs up to placing the meat f.o.b. ocean steamer, and handing 'over to the board bills of lading and I other necessary documents such consolidated charge to become payable at the time of shipment. (j) All accounts of the board to be I subject to tl.o inspection and audit of I tlie New Zealand Controller and Audi-