SHIPMENT OF DAIRY PRODUCE.

Auckland Star, Volume LVI, Issue 185, 7 August 1925, Page 4

SHIPMENT OF DAIRY PRODUCE.

STJBSIDIAR TO MEAT. AN OBNOXIOUS CLAUSE. HOW IT AFFECTS THE FARMERS. In an interview with Mr. Cobbe, of Feilding, a director of one of ahe largest co-operative dairy companies 5u Zealand, some interesting facts and figures on the slipping of dairy produce were obtained by our representative. When the Dairy Produce Export Control Bill was before the House, clause 14, which prevented the proposed Dairy Board making a shipping contract without the consent of the Meat Board, attracted the attention of prominent dairymen, but Mr. Grounds and those Then associated with Mm failed to note ihe hidden dangers concealed in this apparently innocent clause. To-day the dairy farmers of New Zealand "have experienced those dangers, and to date this clause has cost them a large sum of money, and will continue to cause a lose while it remains in the bill. A few months ago a representative of a large English shipping firm was in New Zealand, and submitted the following offer to the Dairy Control Board: — (1) The company was prepared to provide a special service of steamers to carry dairy produce only, loading at four ports, with regular fortnightly arrivals, and was prepared to offer suitable guarantees to delivcT within three days of set dates. (2) The company was prepared to put on fast steamers equal to mail boats for speed, and eubmitted evidence that its present service of meat 'boats to the Argentine beat the mail boats out and Home again. (3) The company wanted a contract with a minimum of five years and the right of renewal for a further period, freight rates to be subject to adjustment at fixed intervals. It does not take a vivid imagination to picture what increased returns this service would have given to New Zealand dairy farm ere this season, when we remember that frequently four Home boats arrived in London in 36 hours with huge quantities of dairy produce, to meet a falling and over-stocked market, caused through these boats being allowed to arrive together. The Dairy Control Board is doing its best to prevent these periodical gluts, but while clause 14 stands in th bill no action of the board can be fully effective. Before discussing the effect of clause 14 on the dairying industry, it is neeeEsary to clearly define the status of the produce handled by the Meat and Dairy Control Boards. In the case of meat, quite 80 per cent of it is the property of large overseas meat firms the moment it enters any freezing works in New Zealand, and the farmer has no further interest in its disposal or shipping. His interest in his stock ceases when the buyer takes delivery, and the buyer in possibly the majority of deals in this country represents some overseas firm, whose principals may be shareholders in shipping companiee, and in some cases actually the proprietors of shipping lines trading to the colonies. Dairy produce is in quite a different category and practically the whole of our butter and cheese is the property of tie actnal producers until it is ,sold on the Home market. Yet clause 14 in effect gives the meat exporter, through the medium of the Meat Board, the right to say when dairy produce shall be shipped, how it shall be shipped, and when and in what quantities it shall arrive in England. Dairy producers naturally ask why was this offer, on behalf of a shipping firm, turned down, and the answer is because the Meat Board refused its assent under the authority granted it by clause 13. The second question arises why was inserted, and the answer must be that it was put in at the request of these meat export firms who own or finance many coastal freezing works and who wanted their meat picked up at the expense of the dairying industry. To achieve this they arranged through their shipping connections that the freight rate to England was to be a flat rate, that is the freight rate was to be the same from an inaccessible dangerous coastal port as from a main port. It is an interesting process to dissect this flat rate and to follow out its effect on those who send their product by rail or road to main ports. The Wellington Harbour Board took out the figures relating to six Home steamers; and found that they spent an average of CI days on our coasts and that it cost £300 per day for interest, depreciation, wages, maintenance, port charges, etc., or a total cost for each ship of £18,300 while on the New Zealand coast. The ships bad an average cargo capacity of 7000 tons, and as the total running costs of each ship for 01 days was £15,300 it follows that it' cost £2 12/3* per ton to collect aiid put in the ships' holds. Now experience shows that it is possible to fill a 7000-ton cargo steamer at the main ports in 20 days or at a total cost of £0000, or 17/1 per ton. It has also been found that it costs 20/ per ton to concentrate cargo at main ports per medium of coastal boats, so if we assume that the whole 7000 tons* for each ship came by coastal boat to the main port the total cost would be £0100. In actual practice, however, about "500 tons of the cargo of a 7000-ton steamer comes by rail or road to main ports, and as it costs 17/1 per ton (ship's charges), to put oil board, the total Cost is £2090; If the other 3500 tons came by coastal boat it would cost £4550 (ship's charges), or a total cost of £7540 to load "7000 tons of mixed produce concentrated on the main New Zealand ports by rail, Toad, or coastal boat. Now we see how the shipping companies arrive at the fiat rate charge. Instead of basing oversea.s freight charges for our dairy produce, which is generally loaded at main ports at a cost of 17/ per ton or a coastal boat rate of £1 1/Gi per ton, it bases the freight rate on £2 12/33 per toil rate, which fate was incurred throujjh having to steam hundreds of miles to pick up Home export firms' meat at isolated coastal • freezing works. To put it .another way, dairy produce freight rates were based on a 01-day ship cost, of £15.300 instead of a 20-day ship cost of £7,540, being main port charges plus coastal charges, on all cargo concentrated by coastal boats. We shipped .131,851.t0ns of butter and cheese for the; 1024-25 season, so the loss through the insertion" of clause 13, which enables the shipping companies to oharce a fiat rate and prevents concentration at main ports, is so great that it warrants the attention of every dairy factory in New Zealand,