DAIRY MARKETING SCHEME

Dominion, Volume 29, Issue 183, 1 May 1936, Page 13

DAIRY MARKETING SCHEME

Minister’s Discussion With Ward Conference REPLIES TO QUESTIONNAIRE Any Deficit to be Met by Government Fourteen resolutions and questions prepared by the Dominion inference of ward delegates of the dairy industry on Wednesday were submitted yesterday to the Minister of Finance Hon. \\. Nash, who attended the conference for the purpose of answcimg them and furnishing what other information he could dealing with the Government’s proposals for the marketing ot daily P r °duce. Mr. Nash, who was accompanied by the Minister of Agricultuit, Hon. W. Lee Martin, spent nearly three hours with the delegates. Before he left he was warmly thanked for the frank manner in which he had. replied to requests for information and was assured by the conference of its best efforts in a desire to make the new marketing proposals a success.

The conference was presided over by Mr. A. J. Murdoch, who said the delegates had not had the opportunity of a full discussion on the proposals in the Primary Products Marketing Bill with those they represented, and consequently they were not in a position, to take the responsibility for advocating or agreeing to its proposals. The first resolution indicated that no resolution or opinion expressed by’ delegates should be construed as an endorsement by the industry of the Government’s proposals. It was in the. following terms.: (1) ‘-This meeting of delegates records its appreciation to the Ministers of Finance and Agriculture for tliis opportunity to examine the Primary products Marketing Bill and for theii’ assurance that any suggested amendments in the machinery clauses of the said Bill will receive favourable consideration, but no resolution or opinion expressed at this conference should be construed as an endorsement by the industry of the Government’s proposals, or responsibility for the steps taken.” The remaining 13, in the iorm of a questionnaire, were replied to one by one by Mr. Nash. The resolutions and questions, each of which is followed by Mr. Nash's reply, are as follow:— Payment for Cheese. (2) •‘That the payment for cheese should be on such a basis that it will enable the ordinary cheese factory to pay out ljd. per lb. for butterfat more than can be paid out by a factory’ manufacturing butter.Y Mr. Nash said the question raised in the above resolution did create a little difficulty in linking up with the work already done. If the Government varied the procedure it was proposed to follow it might open up other difficulties. While he did not want to commit the Government completely, he was satisfied a tremendous case had been made out. If there were a way of doing what was 1 asked for without causing difficulties in other fields, and it ■looked as if there should be, then it ought to be done. He would endeavout to arrange for the wishes of the conference t» be given effect to. Apparently the carrying out of the pledge given by the Prime Minister to fix the price on the basis of the past eight to 10 years would not give IJd., and he’ would be willing to deviate unless that course caused greater difficulties 1 . Mr. J. Boyce (Glen Orona) said that factories were anxious to know the position. It was thought that lid. would keep cheese going. Butter was never better than when it came out of the churn, but cheese improved on the trip Home. New Zealand had 70 per cent, of the Home cheese market, and surely the cheese trade was worth looking after. Unless cheese factories could get more than the average over the past eight or ten years they were faced with closing down, and there would be a rush over from cheese to butter. The difference between butter and cheese payments worked out at about .Slid, for the last eight or 10 years. Mr. Nash .said there would be something better than ,8(kl. for cheese. The stability of the industry was liie first consideration. Liability for Deficit. (3) ‘•That this conference is very z deeply concerned as to the possibility of an accumulated deficit as between the guaranteed price and the market realisations and wishes to know, if this deficit should accumulate over a period of years, whether the industry would be ultimately liable for this deficit. If so, this conference would register protest against such a principle.” “If there is a deficit it will have to be met by the Government,” said Mr. Nash. He explained that there was no liability on the industry for any overdraft. If there were a deficit the responsibility for meeting it was the Government’s, and in the event of a surplus the Government would have to decide what it was going to do with it. Mr. A.'J. Sinclair (Te Awamutu) said that as the framer of the question he was perfectly satisfied with the Minister’s explanation. (-1) “It is the unanimous opinion of this conference that the Dairy Board should continue the handling of export butter and cheese through its head office and branches right up to the time of shipment.” Mr. Nash said the produce was obviously the property of the industry until it was placed on board ship. All the Government was concerned about ■was to find the most economical way of handling the produce for the benefit of the farmer and what would give the best return to the Government after the farmer had received his share. There were a number, of functions in the interest of the dairy-farmer that the Dairy Board ought to carry out automatically. A delegate said there was unanimity throughout the industry that the shipping of produce had been effective. He understood that in future the shipping would be the responsibility of the Marketing Department. Tie wondered if the Minister might agree to maintain the present position, for there was no doubt that the handling of shipping by the Dairy Board in the past had been highly efficient. Mr. Nash said that officers at present in charge of the shipping would probably come over to the Government so that the same officials would be continuing that work. The Government would be responsible for the produce as soon as it was on the ship, so the responsibility of control would have to rest with the Government. Payments to Companies. (5) “Will the Government make payment, to dairy companies’ own banks free of local exchange.' Mr. Nash said he hud had some discussion with the trading banks and the Reserve Bank on the subject raised in this question, but no finality had yet

been reached. At present, however, Government cheques on the Reserve Bank were free of exchange, and lie hoped the payments would be made by Government cheques. (6) “As the banks will lose any profits they have been making on London exchange there may be a tendency to-increase overdraft rates. Can the Government give any assurance in this connection?” Mr. Nash said it was obvious that the Government’s proposals would curtail the profits of the trading banks. If there would be anything more secure than a dairy factory account under the new proposals he did not know of it. He should say a dairy factory account with a trading bank would be the finest account it had. He could not give a positive assurance as to whether the banks would increase their rates or not In discussions he had had with representatives of the trading banks they had expressed their willingness to eo-operate. He was satisfied that the banks would not take advantage of the position. If, however, there was any tendency on the part of the banks to take more from the producer than was their due, the. Government would no doubt, by negotiation or by other steps If necessary, see that the banks did not. get more than their share. Concern as to Basis of Price. t") “That this conference views with grave concern the proposal to fix prices for next season on the.basis of tlie average price paid for the past eight or 10 years, as it fears that increased cofcts may fully oilset any advantage obtained.” Mr. Nash said he did not think he could be moved in regard t</ the period of eight or toil years. He was sure the industry would be satisfied when the price was announced. “There will be no fancy price,” he said, "but one better than that ruling for some time. lie did not think the extra costs incurred in connection with production, taking into account the price that would be paid, would occasion any concern, but if they should stops could be taken to rectify, the position. The Government had only one objective and that was to see that tbe men who did tlie work on the farm and in tlie factory were paid for their services. Mr. M r . Marshall, representing the New Zealand Co-operative Dairy Company, said that this year the industry was carrying a certain amount of additional cost as a result of the Government’s policy. It appeared from computation that the industry would probably receive a penny a pound more next year than it did last year, but it seemed that tlie cost of production would be increased by that amount or possibly more. If that position arose then.the intention of the Government to provide better conditions in the dairy industry would not be realised. This particular phase of the question was causing much concern to many dairy-farmers.-Mr. Nash said the best possible interpretation would bo placed on the proposal to pay on a basis of eight or ten years. Whatever steps that could be taken for the improvement of the conditions of tbe dairy-farmers would be taken. (S) “Will the Government include patting in its activities? Will the Government become responsible and continue to advertise New Zealand - dairy produce in Great Britain?” Mr. Nash replied “Yes” to the first section of this question, and said that the Government would take every step to see that the best possible price was obtained for New Zealand produce. Rearing Calves. (•)) “Docs reference to rearing calves refer to purebred stock as well.. as ordinary bobby calves* ’ Mr.' Nash said the Government was taking only commodities that were saleable. There was not the slightest intention of interfering in tbe way suggested in the question. Milk Products. (10) “Until such time as gazette notice is issued, will marketing of casein, dried milk, etc., be allowed to continue as at present?” The Minister said he had had discussions with the dried milk people, and ways and means had to lie found of meeting their case. Some method would have to be worked out to meet the position of men supplying milk for the manfacture of milk products other than butter and cheese. Nothing would be done until It was gazetted. The position of the companies would have to bo taken into consideration. Position of Contracts. (11) “Certain dairy companies have made contracts for several years ahead, whereby they are being financed by London merchants. Does the Government's guaranteed price policy cancel tbe dairy companies' liability in this connection?” .Mr. Nash said he would see that contracts already made were carried out. in so far as tbe contracts applied to produce made prior to August 1The matter was really one of detail to be discussed with officers of the Department of Marketing, when established, and with tlie dairy factories that, made the contracts. If a party in London had lent money to a dairy factory that money would have to be repaid. If there were contracts affected by the Government’s legislation which had validity from a legal point, of view, then the Government would do everything to see that justice was done to the parties to the contract. Period of Storage. (12) “After the words ‘New Zealand’ in clause 17 it is suggested that the following be added : 'Or on which two months’ storage has been incurred.’ ” [This clause as at present drafted provides that all dairy produce becomes the property of the Grown as