ECONOMIC BATTLE

Auckland Star, Volume LXIV, Issue 147, 24 June 1933, Page 10

ECONOMIC BATTLE

THE DAIRY INDUSTRY. HOW NEW ZEALAND WILL WIN ADDRESS BY DR. MARSDEN. "Let us face the position. We are involved in an economic war, in every respect as serious to our country as the (ireat War of 1914-IS," said the secretary of the Department of Scientific and Industrial Research, Dr. E. Marsden, in an address to the National Dairy Conference in Hamilton on "The Future of the Dairy Industry."' "We are at present in a lull of battle awaiting possible tlevelopments of the World Economic Conference. I am afraid we may be apt to expect too much immediate -result from that conference, though we realise that its two main hopes—lowering of trade barriers and stability of finance are vital to the world's and therefore to our own wel-| fare. I

"There are two great principles in warfare, however, that are particularly applicable to our industry; the first is '.'Je prepared,' and the second 'A vigorous offensive is the best defensive.' Our greatest economic enemies for supremacy in Britain's dairy market arc Denmark and Australia and the margarine interests. The application of the principle of 'He prepared' involved that ive set our house in order, fix np all our organisation, equipment and reserves, and watch the enemy's movements so as to anticipate the attack in all its newer developments. We must have everything working smoothly, efficiently and flexibly.

"Superior Ammunition." ''With regard to the next principle of warfare, 'A vigorous offensive is the host defensive,' let us light the enemy by superior ammunition. Let the farmer produce the best raw material for the shells, ami the factory make the best products from that material. Let us deliver butter better than that of either Denmark or Australia; let us more than ever cultivate the good will of the British people, who occupy the battleground; let us deliver cheese superior to that of Canada or any other producer, and let (lie guns which market these products be such as to land them wlh'l'o they can be most effective as regards price and of a kind suitable to the ground or target at which the shells are aimed. If, on any stage of the battle, it is thought best to compromise by (,uota contracts, in any particular market, or in any other way, let us remember that according to our lighting strength and strategic position will the terms of compromise bo made. For us, the position is such that there is little room for sentiment. The economic light is more vital to New Zealand than to cither Denmark or Australia; these countries have probably better alternative resources and national industrial organisations than wo have, and the issue is less vital to them." Learning From Rivals. Dr. Marsden then made reference to the position of New Zealand's chief competitors. "Fortunately," •he said, "we have 110 reason to ascribe their success to unfair methods, but it is possibly advisablo to copy sonic of the good features of their organisations as are applicable to our conditions." The success of Danish agriculture was primarily due to the excellent system of education. Their research institutions were 011 a far more extensive scale than ours, and. research was free to pursue a long-range policy for improvement. In Australia there was probably a larger realisation of the importance of well-designed and controlled equipment in dairy factories, because the Australians had a more highly developed manufacturing sens). So far as he could ascertain, the soil of the Australian dairy districts was more fertile than ours.

The future of the Australian dairying industry would bo determined largely by our own efforts to preserve our own industry. At present we were slightly in the lead on quality and had more experience. British Farming. "Our third rivals are the farmers in Britain themselves, and the situation as regards a quota cannot bo turned aside movely by stating that we do not like it," Dr. Marsden said. "Already openly in Britain we are tohl that we must not so use the Ottawa agreements as to destroy home production. Already in Britain the wonderful research conducted sincc the war is beginning to bear fruit and larger (areas are now shown to bo possible of utilisation for grasslands for increased dairying. The average yield per cow in Britain is increasing. An increasing number of people in Britain are beginning to feel that the safe, and for the present time the only practicable, method of advance is for each country to survey its resources, social and political as well as economic, to determine in the light

of that survey what it must produce for itself and what it must import from others, and to follow up that determination by arrangements for supplementary exchanges or* 'quota contracts.' It is averred that so far from being an obstacle to the success of tlio World Conference such methods might well serve as a model. "It is worth while realising that the general adoption in Britain of improved indigenous strains of grasses and clovers would double or treble her carrying capacity. Moreover, a similar increase would follow from the elimination of cattle diseases. "It can, however, probably truly be said that in New Zealand, we are in a better position to adapt all these iinm'pvements towards a reduction of costs than in any other country. Moreover, our incidence of certain disease?' is less, for climatic reasons. All that is required is that we should seize and develop each opportunity. Purchasing Power and Margarine. Dealing with general factors, Dr. Marsden said the outstanding cause of present low prices was the national policies pursued by certain European countries. It was also probable that the industrial population had lost more than half of its 1929 purchasing power. It will thus be realised how important it is that the World Economic Conference must lead the .way to improved conditions, otherwise our dairy industry is in jeopardy. It is, of course, easy to be pessimistic, but before turning to the optimistic side it is better to faeo possi- | bilities, so that we may guard against | them.

"Let us consider for a moment the margarine position. There are large numbers of working-class families in the industrial centres to whom butter I at 1/ per lb is at present almost prohibitively expensive, and for these people margarine fills a proper consumer need, and it will be difficult for Britain and certain other Continental countries to decide, as a matter of policy, the proper balance of privileges between the margarine and dairy industries. Recent developments have shown that N margarine can bo made more nearly the equal of butter than ever before. The powerful margarine interests must be wholeheartedly behind artificial methods of rising prices of '"utter in England and restriction of supply, because their selling position is thereby improved. Likewise, the landowners in Britain have much to gain from tariffs and quota, for most farms are tenanted." Good Will of Britain. "These considerations indicate the absolute necessity of cultivating and keeping the good will of Britain. I need not dilate on the methods by which these can be brought about, but it is not improbable that during the last few years we may have lost some of. this good will. It is time we so faced our difficulties as to provoke their admiration. Jt may be that if we found some way of increased immigration, with suitable employment thereof, we would get more direct consumer contacts and centres of good will influence, at the same time gradually increasing our local j market."

Hopeful Aspects. Turning to the more hopeful aspects, Dr. jMarsdcn said that in the last five years there were few, if any, directions in which the industry had not advanced. Our troubles were really due to world depression and under-consumption, a phasQ which must surely pass. The farmers' knowledge of their own problems and methods ol overcoming those problems had increased, there had been decided improvements in manufacture, the quality of milk was improving, and conditions during transport of produce were better than ever. "There is no reason why we should not be hopeful, and make the coming year one to be remembered in the history of the industry. . . . We must, while consolidating our position, so place ourselves as to be able to take advantage of every new opening, whether it be new products or new markets. . . . We may, if conditions improve, escape the British quota. If not, we shall require new markets. In any case, wo must continuously improve j our product."