Black future for meat industry — Mr Falloon

Press, 30 June 1982, Page 16

Black future for meat industry — Mr Falloon

PA Masterton A "black future" is in store for the meat industry unless changes are made, says the Associate. Minister of Finance (Mr Falloon). While praising the performance of the dairy industry, Mr Falloon has warned that New Zealand cannot afford to continue to subsidise agriculture ‘‘because of others’ inefficiency." Addressing ' .a dairy farmers conference in Masterton. he said: "If changes do not occur then the future is indeed black. Surely the militants realise this." Mr Falloon attacked the building of unnecessary facilities in meat works. At the new Oringi plant, foremen "were not to eat in the same cafeteria as staff... a microphone had to' be installed so that union officials could address members.”

“No wonder prejudices build up in that type of environment. If that is typical of meat works in New Zealand, then we are heading back into the class struggle," said Mr Falloon. There had been little industrial trouble in the dairy industry, compared to the

meat industry. The major factor was the’ relationship of managers and directors with unions.

"We should be wary of becoming too big. and management too remote, as so often has happened in our industrial society here and overseas," he said.

"The dairy industry’s management determined’ a long time ago that common sense would prevail, that people would not lose their jobs when the seasonal peak of, milk production fell off, that staff would be kept in useful employment, and that they would adopt new technology and try to diversify their production base," he said. "Perhaps the strength of the Dairy Board is that it has not intervened where companies have wished to develop. They have made that marketing decision themselves.

“In the meat industry we had regulation and licensing for 40 or so years. It prevented those who wished to adapt to new technology from doing so, unless they were lucky enough to own an existing operation.

"It allowed them to pass on their costs to the farmer, almost regardless of the ef-

feet, knowing that the Government would be forced to help the export earner who determined the wealth of the country," he said. From 1974-7 S to 1980-81. killing and processing charges for lamb rose an average 22.4 per cent per annum. The inflation figure, on the same comparison, was 14.4 per cent, said Mr Falloon. "So an increasing share of the marketplace produce has gone to the processing arm. From 1977-81. processing costs for cheese rose about 50 per cent, while for lamb the costs rose 100 per cent." “How had the dairy industry, which had a great deal of centralised control, achieved the change to new ' technology with a much- ■ readier acceptance than in the meat industry?" he asked. The proponents of deregulation would argue that the change was only attainable where there was' a freer and more competitive structure, he said. But “in the first instance. I suppose it comes back to survival. The dairy industry saw the writing on the wall with the restrictions of the E.E.C. In the meat industry,

where change has been resisted. some plants have closed.” he said. “But in this industry the many plants that have closed have been replaced by modern. sophisticated operations. The old Ones have become mushroom factories, restaurants. or even places where people store hay. "Because of de-regulation only a few new meat industry' plants are being developed — still with their endemic labour problems.” Mr Falloon said that the fact that the dairy industry was investing $7OO million in development and diversification projects seemed to have escaped news media attention.