MARKETING OF MEAT

Press, Volume LXXXIX, Issue 27065, 13 June 1953, Page 2

MARKETING OF MEAT

BULK BUYING AND SELLING POSITION OUTLINED BY MR JOHN ANDREW The problems of the organised marketing of products, especially meat, were outlined by the Dominion president (Mr John Andrew) when headdressed delegates at the eighth annual conference of Mid-Canterbury Federated Farmers in Ashburton yesterday. “The question of bulk selling is a very difficult and complex one. Without knowing what Britain is going to do, no decision can really be made on what New Zealand can do, and everything must be conjecture. Britain’s decision will have a very great influence on the line of action we ourselves propose to take. Britain has said that she proposed to relinquish bulk purchase as soon as practicable. If and when she does this there are three things she can do,” said Mr Andrew. “She can hand the business back to the trade and operate a deficiency payment scheme as is proposed by the Meat Traders’ Association; she can hand the business back to the meat trade, and regulate it by exchange control; or she can set up a stock marketing board (which would be virtually an import board) as proposed by the National Farmers’ Union,” he said. The deficiency payment scheme would mean there was a guaranteed price for meat, and that all stock was classified, the difference between its price on the open market and the guaranteed price being paid to the farmer as a deficiency payment. Under the Stock Marketing Board scheme, duties would be imposed onimported meat, and would be used to nay out a higher price to the United Kingdom producer. “The third method we all know about—regulation by exchange control/’ said Mr Andrew. “We in New Zealand are experts in it.

One thing we can be certain of: th< United Kingdom will not depart fron the policy of protection for her owi farming which she has operated fo so long. New Zealand’s Attitude

“What do we wish to do in New Zealand? Do we wish to continue with bulk selling, and if so, how? If not, do we wish to continue here with bulk purchase by the Meat Board or some similar agency, and let them sell the “ eat to traders throughout the world? It is quite clear that if it is ever desired to make use of the pool funds, as they are commonly called, for maintaining prices, then it would be difficult to do this without complete control of the meat industry here. It would appear that control should apply only m the case of meat itself, and not to by-products.

“The big difficulties I see in any bulk purchase scheme or bulk selling scheme are in relating the demand to supply. With bulk selling this becomes a public business and not a quiet adaptation such as applies in deals between trader and trader. If the National Farmers’ Union scheme of a fat stock control board is adopted it will be fairly obvious that in order to keep any strength in our bargaining it will be necessary to have bulk purchase and sale by a New Zealand authority. “Before very long, and in the light of Britain’s decision, we will have to make up our minds what we want and what we are going to do, but if we wish to sell all w§ can produce, we shall have to do two things: gain expert knowledge of markets and prospective demand, and look at our cost structure. .If we can produce our exports cheaply enough, then we have little to fear from the future, provided we keep up the quality of our produce. On the other hand it would be foolish indeed for everyone in this country not to be taking a real interest in what is happening in the United Kingdom and the possible developments,” Mr Andrew concluded.

District President’s Comment Criticism of the bulk buying and selling of meat between governments was also voiced by the district president (Mr P. C. Curd). “This is the worst possible system of handling meat, but too many regard departure from the system as being difficult, while a few tolerate it under the illusion of stability,” he said. “Under this system the producer does not know what the consumer wants, or what price he is prepared to pay. Neither does the consumer know where to make his choice; indeed. he has none. Controls or manipulations, however small or however desirable they may, seem at the time they are applied, can have repercussions far beyond any expectations. Allow a trader to play his true part, sensing the requirements of a consumer and presenting them to a producer, and under competition the three are happy,” said Mr Curd. Stability of Prices Much mention is made of stability, or stable prices, in the belief that stable prices mean stability,” Mr Curd continued. “No impression could be more false. Crop yields will always vary and all attempts to have a level price while yield and demand vary nave been futile, in some cases disastrous, and the consumer who must pay dearly, directly or indirectly for scarce commodities is denied his right 0 ? p f ? od when is abundant. Under bulk buying and selling prices are fixed for a season or less, or may be altered at any time. That sort of stability can be obtained more effectively by individual contracts. Price movement under this system can be very pronounced, too sluggish and quite unstable. The farmer must always expect price fluctuations. His pest stability lies in orderly marketmg of quality products in the right ?h ac « a ? U e , nght tLme ' and this is J ? b ,or t ? e statutory boards. The Wheat price has been the steadest and the worst, and the grower has lost his market to a dearer competitor, concluded Mr Curd.