Meat Board And Co-operatives

Press, Volume XCIX, Issue 29130, 16 February 1960, Page 14

Meat Board And Co-operatives

Details of the financial assistance given last year to two co-operative freezing companies by the Meat Producers’ Board were given in an article on the Farm and Station page of “ The “Press” on Saturday. As Meat Board funds were concerned the transactions were of interest to the thousands of meat producers who have contributed to the funds over the years, but the source of the information was not the Meat Board but the two co-operatives. In fact, the Meat Board had refused to give the information to a producer who had asked for it Mr G. K. Friend, secretary of the South Island company, Primary Producers’ Co-operative Society, Ltd., said the Meat Board had guaranteed the society’s overdraft (to a limit of £800,000) but the society had not borrowed directly from the board. Those meat producers who have not shared in the above-schedule pay-outs of the co-operatives should realise they are shouldering a contingent liability on behalf of the cooperatives. Mr W. F. Leonard, secretary of Producers Meats (North Island), Ltd., says that his society received, in addition to a similar guarantee of its overdraft, a loan of £200,000 from the board. Only £55,000 of this loan bears interest, the balance being interest-free. The net loss of interest to the board, according to Mr Leonard, is £3425; but as in April, 1959, the market yield on long-term Government stock was slightly higher than 4 7-8 per cent., £ 200,000 would have earned not less than £9750 per annum, compared with £2475 in the Producers Meats “investment”.

The loss of income by the Meat Board is therefore £7275 per annum. This loss of income by the board, however, is unimportant compared with three other issues raised by the granting of a loan and of bank guarantees. The eight members of the Meat Board include two men who are also directors of a co-operative freezing works, and the seven members of the electoral committee which elects the board include three directors of Producers Meats. At least two members of the Meat Board were therefore interested parties when Producers Meats’ application for a loan was approved last April. Did they refrain from voting, or from discussing the application? The rank and file of meat producers are not told; this is “the private business of “ people or firms with whom “ the Meat Board has dealings ”. This raises the second issue: the secrecy of the transactions. The third is the principle of making a loan (or guaranteeing a bank overdraft) to one section of a competitive industry. Was this in the interests of the meat producers as a whole? Mr Leonard says the Dominion Meat and Wool Section of Federated Farmers unanimously approved the lo'an. If the meat and wool section was informed, why should the Meat Board subsequently refuse the same information to an individual? If a public company in competition with the co-operative societies applied for a loan, would the meat and wool section support its application? These are matters which might well be discussed at farmers’ meetings at all levels—not just at Dominion council level.