DAIRY INDUSTRY PROBLEMS

Press, Volume LXXII, Issue 21972, 22 December 1936, Page 18

DAIRY INDUSTRY PROBLEMS

MEETING OF PENINSULA COMPANIES AMALGAMATION SUGGESTED BY SIR FRANCIS FRAZER A personal suggestion, that the best solution that could be found for the problem of rationalising the dairy industry in North Canterbury was the amalgamation of co-operative interests in the district and the acquiring by those interests of proprietary factories, was made by the Hon. Sir Francis Frazer, chairman of the Executive Commission of Agriculture, at a meeting, of representatives of cheese factory companies in Banks Peninsula held at Duvauchelle yesterday. As an alternative Sir Francis suggested the exchanging of supplies from remote districts between the companies operating collection services in those districts.

Some weeks ago the Banks Peninsula Dairy Companies' Association sent a deputation to the Minister for Agriculture (the Hon. W. Lee Martin), and because of the promise he made then the commission visited the district yesterday. The spokesmen for the companies, all of which were represented, were Messrs F. G. Armstrong, chairman of the association, F. G. Harris, Okain's Bay, and T. Mould, Wairewa. Position of Industry Mr Armstrong expressed the appreciation of the gathering for the visit of the commission. The position of the dairying industry on the Peninsula was different from that obtaining in the North Island, he said. On the Peninsula it was more or less of a side-line, and it was therefore impossible to expect that manufacturing costs would be in line with those in the North Island.* Any action prejudicially affecting the dairying interests would upset the social amenities of the district, such as stores, garages, and smithies, for the dairy company in each baV was the foundation and centre around which the community was built. He referred also to the drift of population from the country to the larger towns. Transport costs were not the only consideration. The value of the< social services to which he had referred must be considered and weighed in assessing the problems as a whole. j Amalgamation Impossible The impossibility of amalgamating the different companies owing to the hilly nature of the district was mentioned by Mr Mould. Each valley and bay must see to its own services. It was very desirable that milk and cream should be manufactured into butter or cheese in as fresh a state as possible. Their slogan should be quality, for it was well known that the Peninsula had natural advantages for the making of cheese of the very highest quality. He submitted further that the overlapping of cream collection services should not be permitted to continue and suggested that the commission should put a stop to canvassing by butter companies for supplies. Some Peninsula companies were quite economic and others could become so if they were given a clear field. It was not reasonable that suppliers should receive the last farthing for butter-fat at the risk of losing their social services. Referendum Suggested Mr Harris asked if it would be possible to take a referendum of suppliers on the Peninsula with a view to ascertaining if the majority wished to retain the milk and cream of the Peninsula for manufacture into butter and cheese in the district in which they were produced, He suggested possible methods of cream collection which would eliminate the present overlapping of services, and made a plea for the continuance of the small cheese factories. He said that it had been rumoured that it was the aim of the commission to eliminate small cheese factories in Canterbury. He also raised the question of a controlled v price for butter and cheese on the local market and urged the adoption of a system of grading of butter and cheese for local consumption. Chairman's Reply Dealing with the last point raised, Sir Francis Frazer said it was not the intention of the commission or the Government to eliminate any cheese factories in Canterbury. It was recognised that the Peninsula pastures were excellent for cheese milk and that Peninsula cheese generally was of very high quality. What the commission had said was that if owing to loss of supplies a small cheese company found itself unable to carry on economically the commission would endeavour to assist it to obtain a reasonable price for its goodwill from a butter factory company. The commission had no power to zone cheese factories as against butter factories. It could only zone one butter factory from another butter factory, and the same thing applied'to cheese factories. He recognised that dairy farmers conducted farming operations on different lines and that it was more convenient for one farmer to supply cream for butter making and for another, farmer to supply whole milk for cheese making. The Government was anxious to maintain the continuance and stability of the cheese-making industry in the Dominion and had, in fixing guaranteed prices for butter and cheese, allowed a margin of ljd on butter-fat in favour of cheese milk suppliers. This margin could be shown by a reasonably efficient and economic cheese factory. Canvassing by Companies

He thought the suggestion that canvassing for suppliers by butter factory companies be prohibited would be ineffective for such a prohibition could be evaded by all manner of indirect means. He suggested rather that cheese companies themselves should canvass suppliers in their own districts and point out to suppliers the advantages of retaining cheese factories and the social services possible while the cheese factories were in existence. Canterbury presented peculiar problems in the rationalisation of cream collection services owing partly to the grouping of a number of co-operative and proprietary factories in and near Christchurch. Personally he thought the best solution was amalgamation in the way mentioned. Zoning would then automatically settle itself. He instanced what had been done in this direction in other parts of the Dominion.

If such a scheme could not be brought into being in North Canterbury, Sir Francis continued, the commission would endeavour to arrange exchanges of supplies among companies operating collection services in remote parts of the district. For instance, if the majority of cream suppliers on the Peninsula desired their cream to go to one particular company in Christchurch all cream suppliers on the Peninsula could be zoned to that particular company and a corresponding transfer to another company could be made from another outlying locality. The commission had not lost sight of the necessity of eliminating overlapping in Canterbury and had taken preliminary steps to investigate the position and hoped next year to be able to deal with the problem in an effective manner. Replying to Mr Harris's suggestion for a referendum he said there was no power to take a referendum and in any event he thought that under modern manufacturing conditions it would not be an economic proposition to establish a butter factory on the Peninsula to deal with the relatively small volume of cream offering. In the opinion of the commission, it would be wiser to concentrate on cheese manufacture for which the Peninsula had a deserved reputation. The commission was anxious that production and manufacture should be carried on with the aim of securing quality, economy, and efficiency. Under the zoning system these three could be attained