DAIRY PRODUCE CONTROL

Dominion, Volume 18, Issue 151, 23 March 1925, Page 10

DAIRY PRODUCE CONTROL

FACTS OF POSITION REVIEWED

EARLY ASSURANCES IGNORED

REGULATION OF SUPPLIES The article below is the first of a series reviewing the facts of the position relating to dairy produce control. In the present article attention is directed to the circumstances surrounding the granting by Parliameut to the Dairy Produce Control Board of the very sweeping powers now proposed to be put into operation.

There appears to be some peril of the controversy over the proposal of the Dairy Board to assume absolute control of the marketing of the butter and cheese produced in the Dominion drifting into a political and . personal wrangle between the contending parties, and of the real issues at stake, which concern the general public scarcely less than they do the dairy farmers themselves, being obscured by a camouflage of hasty assumptions and. vague assertions. In these circumstances, the facts of the situation, and their meaning and significance arc of general interest. In Event of Emergency. The main opposition to both the Meat Control Bill and the Dairy Produce Control Bill upon their appearance in Parliament was directed against the clauses giving the boards which were to administer the measures power to assume absolute control of all the meat or dairy produce, as the case might be, in the countrv, and to market it as they thought fit without any regard to the wishes or the obligations of the producers. Strong protests were made against these clauses, members of Parliament and others declaring that their enforcement would inflict a grave wrong upon many producers, and upon a number of other people who had helped to build up the industries, and finally- assurances were given by Ministers ill both cases that only in the event of exceptional circumstances arising would the proposed marketing powers be exercised. The Meat Control Act came into operation in February, 1922, and shortly afterwards the board to administer it was set up with the powers of compulsion.

The Two Boards. The Meat Board, however, has never exercised its powers of compulsory marketing. It has directed its efforts, with marked success, to the enforcement of strict grading, the improve, rnent of the methods of handling, the reduction of freights and insurance, the maintenance of regular supplies, the extension of markets, the effective advertiitng of New Zealand products, and the general protection of shippers’ interests,' and the encouragement of buvers’ good-will and confidence. By these means, and without disturbing the ordinary trade channels, it has saved the producers in charges alone a sum estimated at well over a million sterling during the last two years and, what is even of more consequence to the producers and the country, has assisted to stablise the London market and established remunerative markets in other centres. The Dairv Produce Control Bill completed its passage through Parliament in August, 1923, Ministers having given assurances in respect to the compulsory clauses already mentioned, and after being confirmed on a reference to the 56,000 factorv suppliers by 22,284 votes to 9255, 31,768 suppliers not voting, came into operation. _ In due course a board consisting of six members elected bv the factorv suppliers in the North Island, three bv the suppliers in the South Island, two appointed by the Government, and one nominated by the merchants and shippers, was set up. Until quite lately the board had confined its activities, apart from minor matters of organisation, to arranging an insurance cover for the whole 'of the New Zealand dairy produce at a satisfactory rate, and sending a delegation overseas to inquire into matters concerning the Dominion’s dairy industry, a very prudent and proper proceeding.

Board and Delegation. 'On its return from its investigations abroad the delegation presented a report to the board in which it recommended that the board should undertake the whole of the .marketing of New Zealand dairy produce, and that sales through any other medium should be stopped. 'The board by a vote of a majority of its members has adopted these recommendations, and resolved that they shall come into force on August 1, 1926. As is generally known, this decision lias created some surprise, and a good deal of uneasiness. The board has resolved to do what the public and producers and Parliament were led to believe would not be done except in case of emergency. The board has not shown that such an emergency has arisen. It merely states that it is impossible to regulate supplies without complete control, and that f.o.b. sales must be stopped because they are frequently employed in breaking down the market. Fluctuating Prices.

These contentions may be examined briefly. The board contends that the prices of New Zealand butter fluctuate to a much greater extent than do the prices of Danish butter, and that the only remedy for this unsatisfactory state of affairs is to place .the whole business of marketing in its hands. This point needs a little closer consideration. Here is a table showing the average importation of Danish and New Zealand butter into the United Kingdom during the three years ended December 31 last:—

83,666 55,345 It will be seen that the supplies from Denmark are remarkably even the vear through, while the supplies from New Zealand fluctuate enormously. The | minimum months of Danish supply are 1 from December to April, but even in | these five months the average monthly l supply is 6096 tons, while in the seven maximum months, front May to November, the average supply is 7598 tons, a difference of only 1502 tons between the average minimum month and the average maximum month. In New Zealand . the five minimum months are from June to October, and the seven maximum months from November to May. The atcragc supply in the minimum months

is 2265 tons, while in th'.- maximum nonths the average supply is 6288 tons. In two of the minimum months the average supply goes down to 952 tons, and 1262 tons respectively. During these periods, of course, New Zealand butter is practically unavailable on the London market, and buyers who would become regular consumers in different circumstances turn to other brands, and in many cases continue to take them permanently. Regulating Supplies. The demand for butter is not merely seasonal. It exists the whole vear round, and has to be satisfied by' the seller who wishes to maintain his' connection. There can be no doubt that this irregularity of supply is the main cause of the fluctuations in the prices of New Zealand butter on the London market, and of its failure to reach nearer to a parity with the prices of Danish butter. There is, however, no reason why the shipment of dairy produce from the Dominion should not be regulated by the Dairy Board just as the shipment of meat is regulated bv the Meat Board without interfering with the freedom of the dairy farmers to market their produce as they please, and to arrange their finance as they think best. Ihis, after full inquiry aiid investigation, has been adopted a% the policy of the Meat Board, with highly satisfactory results, as may be judged from the stability of the prices-realised for New Zealand meat, since the board assumed intelligent and effective control. A practical scheme for thb regulation of supplies and the assertion that f.o.b. _ sales are frequently employed in breaking the market must form the subjects of a separate article.

Month Danish. Tons. New Zealand. Tons. January ... 6’205 6955 February. . 6115 7464 March .... 5951 6738 April 5777 5665 May 7572 7149 June 8’2 14 4123 July 838 i 3050 August .... 7789 1988 September .6937 952 October ... 7011 126’2 November 7380 4410 December G431 5639