EXPANDED POWERS FOR MEAT EXPORT COMPANY ADVOCATED

Press, Volume CI, Issue 29851, 18 June 1962, Page 15

EXPANDED POWERS FOR MEAT EXPORT COMPANY ADVOCATED

It was desirable that the powers of the Meat Export Development Company should be expanded to include the development of all new markets for meat, and that it be made mandatory for all meat freezing companies to join it, Professor B. P. Philpott. professor of agricultural economics at Lincoln College, told the Ruakura farmers' conference last week. Professor Philpott said that ihe collective national effort for development should be concentrated through this agency, which should still, however,'use the energies and abilities of private firms, though on its own terms, as far as general policy in new market development was concerned. Bearing in mind labour difficulties and high wages costs in some of the country’s agricultural processing and handling industries. Professor Philpott said it was surprising that market costs were as low as they were. This had to be attributed to the efficiency and good organisation of meat works, dairy factories and wool stores. One of the big elements of cost involved was that of bearing the risks of prices going down. The profits earned by individual marketing firms were the reward for bearing these risks and it was therefore necessary not to be too critical of these profits. In fact in the meat industry, for example, a profitable situation should be preferred, for it was only out of profits that the necessary

expansion in killing facilities could occur. But in the desperate situation of needing new markets, Professor Philpott said, what was profitable for the nation might not be profitable for the individual firm, so that sole reliance on private enterprise might not be satisfactory. It was this conflict of interest, when it occurred, which seemed to justify measures aimed at more centralised marketing. Professor Philpott described the system operating in the dairy industry in New Zealand as the most efficient and progressive marketing arrangements that could be envisaged. A meat marketing board, he said, could even out fluctuations in the meat schedule, pay differentials for different types and grades of meat for which a long term market was envisaged (for example to encourage beef Production for all world markets or good quality mutton for Asian markets) and it could more effectively even out the flow of meat to Britain to get higher returns. But it was in the development of new markets that the case for cen’ralised board control seemed stronger, as it was here that things needed to be done which might not be profitable to private firms but would be profitable to the nation—world-wide market surveys and promotional activities, building of storage facilities in tuider-developed counfries and a willingness

in the long-term interest to sell in new markets for a return which might be somewhat less than was being received in Britain.

“We already have the basic centralised organisation for development of new markets in the Meat Export Development Company,” said Professor Philpott, “but its powers are very largely restricted at present to the United States market. Moreover not all the ment firms have subscribed for shares in the company, though significantly enough all the New Zealand-owned companies, whose interests are to a larger degree coincidental with those of the nation, are members.”