One Meat Export Body Opposed

Press, Volume CV, Issue 31018, 25 March 1966, Page 17

One Meat Export Body Opposed

There were considerable disadvantages in the suggestion that New Zealand meat exports should be sold by a centralised authority or meat marketing board, Mr P. T. Norman said in Wellington.

Mr Norman, general manager of Thomas Borthwick and Sons, one of New Zealand’s largest meat exporters, was commenting on the claim by Professor B. P. Philpott of Lincoln College that “advantages would accrue from Producer board marketing.” “Professor Philpott cites the Dairy Marketing Board as the type of authority which could be the model for a monopoly body to market meat,” Mr Norman said. “There is very little basis for comparison between the Dairy Board and the meat industry, which are engaged in the marketing of vastly different products with different market potential. COMPLEX INDUSTRY “Unlike the dairying industry, which has a relatively narrow range of products to market, the meat industry is far more complex with over 300 different varieties of meat cuts to supply to thousands of buyers all over the world who have varying specifications, in addition to

wool, pelts, hides and a wide range of other by-products. “We certainly do not criticise the Dairy Board or its marketing policies. The board has a difficult task to market products, such as butter, and its main market Britain, is over supplied with it.

“But we cannot accept Professor Philpott’s suggestion that a similar marketing authority could do a better job of marketing than individual exporting companies vigorously competing for the top price,” Mr Norman said. “The strength of the meat trade lies in the fact that many decisions on forecasts of demand and prices are made by numerous exporters who cannot all be wrong simultaneously. However, if a single marketing authority makes a wrong decision in forecasting demand and price, the entire industry is affected adversely. SPECTACULAR GROWTH “Handing over of meat marketing responsibility to a monopoly authority could result in unrealistic and costly market development projects.” The losses incurred by these projects might be spread over the entire meat export income, concealing the problem area and resulting in generally lower farm export income. Mr Nonnan said that under the present free enterprise

system of meat marketing, the industry had shown spectacular growth in the last decade. Volume of meat production had risen tremendously from 380,000 tons in 1955 to about 515,000 tons in 1965.

During this period value of production had increased from £59 million to £lO9 million and meat industry byproducts now returned to New Zealand £3O million annually, making the industry the country’s largest earner of export income. “In the light of these facts, it is difficult to see what advantages are to be gained from the Professor’s desire to alter a successful marketing system.” DISADVANTAGES

Mr Norman said other disadvantages of a statutory monopoly marketing authority were that it could deprive farmers of their present choice of selling livestock on their own account, through a co-operative or privatelyowned company at schedule prices, at a head or at auction; could eventually extend to control of farm production; could remove the incentive provided by competition among exporters to obtain the best overseas prices. It could also result in the loss of a valuable world-wide network of offices and agencies established by existing exporters through centralisation, which had resulted in

the building of a huge bureaucracy: mean the loss of exporters’ experience in finding, developing and stabilising markets, and could result in control of the industry by a monopoly which had no experience in meat marketing.