THE FREEZING INDUSTRY.

Auckland Star, Issue 291, 9 December 1925, Page 18

THE FREEZING INDUSTRY.

IN PARLOUS STATE. A REAL DANGER. (By AVRO.). The history of co-operative, freezing companies in New Zealand is a history dotted with, failures, »nd unlese producers generally are more loyal to their own concerns in the future than they have been in the past, othei companies are going-'to find themselves in exactly the same position as those which have "had to close their doors, While it is true that, in some cases undercapitalisation in the first instance has been responsible for the ultimate failure, it is equally true that in the majority of cases, the real failure lay "in the lack of support given by -the farmers themselves. . It is hard. to understand the apathy, of farmers in supporting the works which they have built out of theii own capital, but there are . repeated instances throughout New Zealand where ' farmers - t have built up-to-date concerns'and then promptly commenced selling their stock to the first buyer who came along and 'offered them a fraction of a penny per pound more than they could get through their own works, One would naturally think that in ordei that their capital should earn dividends or even be protected, they would support the works, but they do not do so. A Difficult Position. - There is no doubt that the present position is a difficult one and that thej.t are now a number of co-operative freezing works dotted about the Nortl Island which are in an exceedingly awkward, financial position. Some arc able to. hang on, .but it is only a mattei of time when many will go by th« board unless greater support is afforded At every annual meeting of co-operative concerns, the necessity for loyalty. ,if stressed by the directors, and recent!} the shareholders have been taken fullj into the confidence of the directors and shown that unless returns improve the eventual position of the company will b< in the bankruptcy court. Gradually th« proprietary concerns are becoming stronger, while the co-operatives -are weakening, and there is a very real danger to the whole of the farming community. The whole solution of the problem is simple enough, and fan'be provided in the one word loyalty, the meaning of which appears to be unknown to at least a section of the fanners. North Island Works. A brief survey of some of the works in the North Island discloses an interesting position, and shows how very real the danger is. In 1923 the Poverty Bay Farmers' Meat Company suspended operations, and the works, later the subject of the Royal Commission, passed to Vesteys. - The history of those negotiations needs no comment in this article, and it will suffice -to/say that the works are no longer owned by the farmers. It may be contended that it was not disloyalty that ruined these works, but really the purchase of the Admiral Codrington, and there is some truth in the contention. On the other

hand there was also a considerable amount of disloyalty, and many farmers who held shares in the company consistently froze in other works. The chairman of directors of the Wairoa Farmers' Meat Company, Mr. J. S. "Jessep, speaking at the annual meeting this year, sounded a very grave warning note when he said that the works were .not receiving sufficient support from the farmers, and that the end of the matter might be that the works -would have to go under in the course of a few years if better support were • not accorded. Mr. Jessep, as a member of- the Meat Board, should have an'inside knowledge of the position of co-operative freezing companies in the Dominion, and he 'said that the position was now- bo . bad that it simply amounted to the fact that the farmers were in no case receiving interest on the money invested in the freezing industry. That position could not obtain indefinitely, and he could see danger ahead unless shareholders generally were going to support their own works. The Whakatane freezing works are being closed down this season solely because they are not receiving the support needed to keep them on a paying basis, and there is little likelihood of them being re-opened unless they are purchased by a fresh company or by a proprietary concern. The only remaining cq-operative company in the district, the Gisborne Sheepfarmers', while in no immediate danger, is also finding that the shareholders are I not giving the necessary support, and [this year is paying a dividend only on . the'"preference" shares. Some years ago the directors realised the danger of I apathy on the part of shareholders, and by adopting a cautious policy in time have saved the position. In the annual report to the meeting which will be held in the near future, the necessity for greater support is set out, and the directors point out that shareholders would have received much more had they been loyal throughout the season. Whet Will Happen. .Two or three years ago, when tin. majority of the farmers were financially embarrassed-, and every penny couuted j there was some reason for their support of the concerns other than their own but now, when they are once again on a sound basis,, it is impossible to understand the. short-sighted policy which they adopt It has.often been contended that the farmer ia hot a business man, and there"musf be sortie truth in the contention when men will risk their capital in a concern, and then make no attempt to make it earn dividends, or even to protect it. The freezing industry is in a very grave position,at present, and the best brains of the country are being directed to the work of finding a solution of the industry's many difficulties. Competition is becoming more.keen each year, killing rates are" being lowered in direct competition with co-operative concerns, and generally a determined attack is beinw made in an endeavour to capture the New Zealand market. If farmers will realise this fact they will have gone a long way towards assisting the industry out of its difficulties, for they will then lend a wholehearted support, which if given in time can yet save it from the ruin which it is now facing.