BUTTER CLAIM “NOT JUSTIFIED”

Press, Volume CII, Issue 30172, 2 July 1963, Page 12

BUTTER CLAIM “NOT JUSTIFIED”

Farmer Slates Board’s Administration

(Ngso Zealand Prow Association) WELLINGTON, July 1. A dairy fanner, Mr A. J. Ingram, made a scathing attack on the Dairy Board’s administration when he .appeared today before the commission inquiring into local butterfat prices. Mr Ingram admitted he was one of the few dairy farmers in New Zealand to oppose the board’s claim for a 4jd a lb increase in the price of butterfat sold for New Zealand consumption.

“This application by the board discloses an extremely short-sighted attitude towards a very valuable market,” he said. Mr Ingram admitted under cross-examination by counsel for the Dairy Board, Mr L. M. Papps, that his views were influenced by the environment of his own farm, which, he said, was on excellent country. But, he added, he had fairly wide experience of dairy farming in other areas.

Mr Ingram alleged:— (1) New Zealanders consumed lower-quality butter —the best quality was exported. (2) Some of the board’s evidence was "tailored” to suit its case. (3) An agreement between the Government and the dairy industry in 1952 that existing reserves of £24 million were sufficient to meet all contingencies in the foreseeable future was “an enduring monument to the short-sighted attitude of the industry in financial matters.” (4) In 1959-60, with a surplus of £l4 million after losing £35 million in two seasons, the Dairy Board "took up a firm position astride a fence” and the dairy conference voted overwhelmingly to pay out the money in spite of a few leading figures who counselled caution. (5) In September, 1960, the dairy companies received 4.3995 d a lb and £7 million of reserves were dissipated. “In its long and chequered history, the industry, in my opinion, has never made a more thoroughly irresponsible decision, and one more likely to undermine public confidence in its capacity to run its own affairs.” Mr Ingram described evidence given by the deputychairman of the Dairy Board, Mr R. A. Candy, in various places as “out of date” and “astray,” and said the board had been “most dilatory” in making public its views on improved farm efficiency largely off-setting increased costs since 1957. He Submitted that the British market was flooded with dumped and/or subsidised butter before 1939, and that it had been a permanent feature of the market.

The Dairy Board had lived with this for many years and had deliberately followed a local market policy directly contrary to its present application.

Dairy farmers, he claimed, had a heavy responsibility for the £8,400,000 overdraft in the Dairy Industry Reserve Account. He submitted further that the financial affairs of the industry had been badly handled in the last 10 years and that the dairy farmers could hardly expect the taxpayer to come to their rescue.

Mr Ingram referred to submissions by the Dairy Board that it took two men to milk 66 cows and do required farm work as “grossly overestimated.” and produced a table prepared by a firm of Morrinsville accountants to support his statement. There could be no justification for retaining present restrictions on the manufacture of table margarine if the Dairy Board claim was granted, he asserted. If the commission accepted the industry’s claim, it would open up the field for a wide range of similar claims, including meat and wool producers. “The present application would provide assistance to the wrong people in the wrong places in the wrong manner at the wrong time,” Mr Ingram told the inquiry Concluding, he claimed that the financial losses of the industry* in 1957-58 were due to:—

(1) Errors of judgment in estimating the capacity of European dairy farmers to recover after the war. (2) Premature dissipation of reserves before the real threat to dairy markets from overseas competitors had developed. (3) Preoccupation with a cost-of-production standard that was inflated and distorted by failure to allow for increases in farm effi-

ciency between 1934 and 1954. Mr Ingram conceded that some sectors of the dairy industry were in need of financial assistance, and that this assistance should be given high priority.