The Press WEDNESDAY, SEPTEMBER 1, 1954 Dairy Industry And Free Market

Press, Volume XC, Issue 27443, 1 September 1954, Page 10

The Press WEDNESDAY, SEPTEMBER 1, 1954 Dairy Industry And Free Market

Any stick with which to beat the Government may be better than none. Even so, it is not easy to account for the Opposition’s persistent criticism of the decision to abandon the bulk purchase contract for butter and cheese a year before the termination date, because the Government had very little to do with the decision and most of those directly affected approve it. For what it is worth/however, Labour politicians are determined to represent it as an example of the Government’s rash renunciation of the controls so dear to the Socialist heart; and if at the same time they can stir up fear of a free economy and distrust of open markets, so much the better.

The decision so bitterly attacked in the House of Representatives a few days ago was not a Government decision. It was taken by the New Zealand Dairy Products Marketing Commission after consultation with producers’ representatives in New Zealand and representatives of the distributing trade in Britain; the Government merely concurred. Nor is the wisdom of the decision called into question by saying, as Mr Nash did, that had the contract not been cancelled, “ a better price would be “ available today ”. The price in the short run is of little importance; what matters is the price over a period. Speaking at the annual meeting of the New Zealand Co-operative Dairy Company, Ltd. (the largest manufacturer and exporter of dairy produce in New Zealand), the chairman, Mr A. Hayward, said no-one could tell for certain what the comparative results would be until 12 months of free trading had passed. Mr Hayward emphasised a much more relevant consideration overlooked by Mr Nash. Mr Hayward, who was among the leaders of the dairy industry who went to England to discuss the termination of the bulk contract, told the shareholders of his company that if the proper marketing of the Dominion’s butter had been delayed by the continuation of the contract with the Ministry of Food, the margarine interests would have had a big start in the free competitive market that is now the only market in the United Kingdom. Mr Nash claimed that the interests of the consumer in Britain and of the New Zealand producer would be best served by contracts with the British Government. But the Min-

istry ol Food, as Mr Hayward said, is elosing down and is now in its dying stage: its staff could not be

expected to be as efficient as in recent years because its marketing experts have left it or are about to leave. The interests of the consumer in Britain lie, Mr Hayward believes, in the flexibility of an open market. As an example, he said that it would not be possible to give the people of Cardiff the salted butter they preferred or the exact brand of cheese they preferred if supplies were allocated by the Ministry of Food. Mr Nash’s deputy, Mr Skinner, rode the Opposition’s hpbbyhorse hard when he criticised the “ reversion ” to marketing through “ private chan“nels”. . But these are now the accepted channels through which the produce of all countries will reach the British markets. New Zealand would be foolish not to use them. The alternative—direct New Zea-land-controlled channels to retailers —would be costly and might invite damaging competition from the established trade.

The Opposition is living in th< past. It has not yet realised that whether New Zealand likes it oi not, the world’s markets, including the British market, are now fret and highly competitive. Nothing demonstrates more plainly the Op position’s refusal to look facts in the face than the plaintive inquiry frj-i Mr Skinner as to the steps the Government proposed to take “tc “ safeguard the producers agains: “ further adverse trends The onlj safeguards the Government car provide directly are those it already provide* in ensuring that th< quality of the country’s dairy pro-

ducts is kept consistently high. The best and surest safeguards will be found by the industry itself promoting its own efficiency. The transition period for the dairy-industry may prove difficult, and the difficulties must be faced realistically. So much has been acknowledged by several of the industry’s leaders, by Ministers, and by government officials—notably by the DirectorGeneral of Agriculture in his department’s annual report. But it is neither realistic nor helpful to pretend that the difficulties are of the Government’s making. Essentially, they were created by the ending of rationing in Britain (and who in New Zealand can object to that?) and the consequent abandonment of bulk buying and distribution by the Ministry of Food. Faced with the need to change now or after a year, the leaders of the dairy industry sought the best advice, calculated future trends as far as they could be foreseen, and decided to abandon the dubious shelter of the bulk purchase contract for its final year and to begin immediately to meet competition in a free market. If the Opposition believes that decision to be wrong, its quarrel is with the dairy industry and its leaders, not with the Government.