Development Of Dairy Marketing Outlined

Press, Volume XC, Issue 27407, 21 July 1954, Page 8

Development Of Dairy Marketing Outlined

■ ♦ An outline of the development of ’ :airy marketing in New Zealand and he functions and composition of the present marketing system were given > ’>y the assistant secretary of the New > Sealand Dairy Products Marketing Commission (Mr C. Patrick) in an ’ ddress to the Canterbury branch of ' ; he Economic Society of New Zea- ■ {and and Australia, on Monday eveni w • Mr Patrick began with the period ' «n early New Zealand history when | *>utter was produced on farms for , .oral sale, but even then there was trend to factory manufacture. “The • » tarring point was in 1882 with rerlgeration.” he said. “Shipping com- : »anies provided the necessary ships ' j nd with the introduction of Governnent grading and cool stores, production soon responded with a big ; jtcrease in the number of factories.” • ■ One of the main trends of this ? 'formative period” was the develop- : Jnent of co-operation which was suited to dairy production land which was : !neouraged by the Government, Mr •’htrick said. In the nineties the . Ofepartment of Agriculture was set . *ip with the introduction of grading ■ .»f dairy produce. “The industry by *orld War I had become a unified ?he —predominantly a factory system. . J co-operative system and an export 'ystem; and it was operated with official grading. f “The war interrupted this developnent but the early 1920‘s were years if continuous expansion. By 1923 New Zealand was the biggest exporter of • fairy produce in the world and has since then. In 1923 the New Sealand Dairy Produce Control Board ■ -a marketing organisation—was set ip to cope with a price slump and it . -lecided to take over complete con•«L But when that scheme broke r 3own the-board reverted to limited ■ control,” he sad. ’ * Discussing the depression of the > % jarly 1930'5, Mr Patrick said the dairy narket was in a drastic state causing ; Be Dairy Industry Commission to be ■ rat up in 1934 in response to an »wbvfous demand. It reached the conclusion that “immediate action must ’oe taken to stabilise the position dairy farmers.” The first result was reorganisation of the “first Dairy Soard ” with greater Government rep- , --esentation and greater backing from > ? he industry. Guaranteed Prices “In 1936 the Government Market- ' -ing Scheme was put into operation with guaranteed prices,” said Mr .Patrick. “There were two stages to this—first, the farmer sold all his butter and cheese each month at a jprice calculated to give him a certain standard of living; second, the marketing authority held itself willing to buy all the butter and cheese offered to it

and by taking the profits and Losses in- . curred, acted as a shock absorber between the Government and the farmer. The Marketing Department took the place of the second Dairy Board and a third Dairy Board took over the functions of the latter as a mouthpiece for the farmer. By the guaranteed price scheme the dairy ( farmers gained in many ways—mainly in security. “In the second stage of the dairy marketing system, the Marketing Department put into effect, absolute control and the system then instituted of productivity standards and price structure has lasted to the present,” Mr Patrick said. Dealing with the post-war years, he said the present Dairy Products Marketing Commission with three Government membm, three farmer members, and a chairman oppointed by agreement, was instituted in. 1947 with the unanimous approval of the dairy industry. Its functions were much the same as those of the Marketing Department before World War ll—to acquire and market butter and cheese for export; to determine prices paid; to control the export of milk powders, caseins and other such products; to report to the Minister of Agriculture; and to study market trends overseas and the movements in prices likely to affect the industry in New Zealand. The third Dairy Board was reorganised in 1949 and was now a strong body acting as a liaison between the producers and the commission. “The commission exported a total of 239.900,090 tons in its first year of a value of £74,000,000; in the 1952-53 season it exported 310,000 tons valued at £74,000.000,” Mr Patrick said. “And the trend is still towards expansion. Outside the bulk purchase contract with Britain, which ends shortly, the commission has exploited other markets, selling produce in 60 d/fferent territories last season, including Russia, to which 9000 tons of butter were sent —the biggest ever to any country apart from Britain.” Referring to the end of bulk purchasing _ by Britain, Mr Patrick said the eommrssion would presumably carry on along the same lines as the organisation before the war. It would sell through agents overseas, the main difference from bulk purchasing being that payment would not be received until the reduce was sold there. Also, a difference from selling before toe war will be that one of the panel of agents in Britain will be owned by the commission, that is Empire Dairies, which was bought last year.” he saicL tl?e war if handled about oneuhird of our butter and cheese in Britain- That has given us a foothold. “Because bulk purchasing has ended, - that aoes not mean that the commisi sion should come to an end. It has - evolved through the years in response t eluded* 110 opinion ’” Patrick con-