FEAR OF CONTROL

Dominion, Volume 25, Issue 275, 16 August 1932, Page 3

FEAR OF CONTROL

Exporting Merchants POWER OF THE BOARDS Deterrent to Initiative Much has been said about the need for business men to seek new markets for New Zealand produce, but little about the difficulties with which they are confronted. One great deterrent, if not fatal drawback, to any efforts they might make is the power which is at present vested in the produce control boards to take “absolute control” of all the produce of the industries which they govern. Absolute control means, of course, that individual marketing by merchants is suppressed in favour of complete control by the boards, says a statement by the Associated Chambers of Commerce. The disastrous failure of control of New Zealand dairy produce in 1926-27 added to the failure of control the world over wherever it has been tried. The Dairy Board has now abandoned it, and the Meat Board has never applied it, but it is at present in force under the Fruit Board and the Honey Board. Thus the merchant is at present prevented by law from trading abroad in fruit and honey. That precludes him from finding new markets for those commodities. Threat of Control. It is true that the merchant may still market dairy produce and meat, but the uncertainty with which he is always faced is whether absolute control will again be enforced, since power to take this action still reposes with the boards under the empowering Acts of the Legislature. A merchant cannot be blamed for his reluctance to spend money exploring the possibilities of foreign markets, establishing connections aijd building up a trade when the boards hold the power to resort to absolute control at any time and take over his trade. It is a risk that is more than, an ordinary trade risk, and one which the merchant is not prepared to shoulder. It may be said that the experience with dairy produce control should preclude any likelihood of a repetition of that experiment, but when the dairy control legislation was passed it was with the understanding that absolute control would not be enforced except in a crisis. Yet that power was used without justification, and merchants had taken away from them the markets they had established. Owing to its present policy of absolute control, the Fruit Board is constantly losing opportunities to further its trade, since merchants have numerous opportunities to make direct f.o.b. sales, which, however, I?hey have no power to effect. The producers are daily losing the benefit of free and progressive competition, they are entirely in the hands of the board and its ally, the New Zealand Fruitgrowers’ Federation Ltd., and they have no means of redress even if these two bodies are guilty of flagrant neglect of markets and gross maladministration. Exportation of Honey. The same applies to the Honey Board, despite the recent emphatic affirmation of the absolute control policy of the board by the National Beekeepers’ Association —which body by no means embraces or speaks for the whole of the honey producers. The utter failure of control over honey is shown by the fact that the sales of New Zealand honey in the United Kingdom —achieved at enormous expense to the producers—declined from 554 tons in 1925 to 429 tons in 1930. According to the monthly abstract of statistics for January, 1932, the whole export (not sales) of honey from New Zealand to all countries for 1931 was only 261 tns. No further evidence need be produced in view of the plain statement of the Minister of' Internal Affairs, Hon. A. Hamilton, who told a farmers’ rally, at Dannevirke on August 6 that . the farmers “were not best qualified to do their own marketing.”. He said that “if the farmers’ boards did not vigorously tackle this phase, then the Government might have to appoint a. board of experts to sry to place the Dominion’s products in foreign markets which were not yet exploited.” It is noteworthy that Mr. Hamilton makes no distinction between producers’ boards which are at present exercising absolute control, and those which are not —that is, those which prohibit the merchant altogether and those which are willing to let him out on the end of a rope. The Minister warns them all. An oversight by Mr. Hamilton, however, is that the age-old experts of trade —they who have from time immemorial established the markets of any nation—are tbe individual merchants. New Zealand merchants are not antagonistic to any competition by control boards in overseas markets, because they have nothing to fear from that competition. Seizure of Markets. It is the dormant threat of absolute control and market seizure that deters them from seeking new markets. The Government could clear away in one stroke the chief obstacle to the creation of new markets by removing the compulsory clauses from the Control Board Acts. This would give the merchants freedom and security to explore new fields and prevent the producers’ boards from forsaking at any time the substance of individual marketing for the shadow of co-operative dictation to the world’s markets. The compulsory power of the producers’ boards is a typical example of that interference, through the Government, with private initiative and enterprise which is having so serious an effect on the whole country. What Ne\V Zealand needs for a revival of its trade and prosperity, either as regards its exporting industry or any other industry, is not added restriction and added interference, but the relaxing of existing control and handicaps ,on private enterprise.