MILK SUPPLY

Dominion, Volume 37, Issue 125, 22 February 1944, Page 4

MILK SUPPLY

Report Of Commission Of Inquiry

METROPOLITAN AREAS Central Authority To Be Set Up Recommendations of the Milk Commission appointed nearly a year ago to inquire into and report on the supply of milk to the metropolitan areas of Auckland, Wellington, ClirlsLcliureh and Dunedin wore released yesterday bv the Minister of Agriculture, Mr. Roberts. The commission was also asked to report on what reorganization it considered necessary in the collection, treatment and distribution of milk in these areas in order to ensure adequate supplies of milk of a high standard at reasonable prices, an'd the snjiply of milk to the armed forces in such areas. Long-term and short-term recommendations were contained in the report, which has been examined by the Stabllizalion Commission.

The main long-term recommendation is that there be a central authority to guide and control the conduct of the liquid milk industry, and the most important short-term recommendation relates to a higher payment to producers for Dunedin, Christchurch and Auckland. The increases will be met by Government subsidy and will not involve an alteration in the price of milk to consumers. No short-term increase for producers is recommended in the case of Wellington, as it is considered that the position there is relatively more satisfactory. There is a majority report signed by the chairman, Mr, W. R. Tuck, and one member, Mr. A. H. Ward, and a minority report signed by the remaining member, Mr. W. Dell. An outline of the commission’s recommendations and the decisions of the Government on them was given by Mr. Roberts. “The report,” he said, “covers long-term and short-term proposals, the former "embodying recommendations relating to a permanent policy and organization for the liquid milk industry, the latter recomnjendations foralleviating matters which it are in certain centres retarding an adequate supply of liquid milk. The most important feature of the long-term recommendations is the setting up of a central authority whose duty ij; will be, as the Milk Commission puts it, ‘to collect further data on all matters within its jurisdiction, and to confirm, collect and supplement the recommendations of the Milk Commission.’ Such authority would, in the view of the commission, proceed to use at all times such powers with an awareness of the advantages of co-opera-tive rather than enforced adjustments of present circumstances. The Government endorses the commission’s recommendations to set up such an authority, and early consideration will be given to the framing of the necessary legislation. It is also intended that the Milk Commission report will be referred to this authority, to be used as a guide in the development and re-organization of the liquid milk industry.” Guarantees of Quality.

Referring to the commission’s recommendation of a higher payment to producers for Dunedin, Christchurch, and Auckland, the Minister said it iqust bo borne in mind that the general price recommendations of the, commission provide for payments on the basis of a level 365-day supply; with penalty for default, and for appropriate quality and butter-fat standards. “The Milk Commission,” he continued, “emphasizes the fact that the consuming public should be assured adequate guarantees as to the quality of the milk made available to them for consumption. The Government is in complete agreement with this recommendation, and is anxious that a high" standard of level supply and quality will be achieved in all the main centres as Sbon as possible. However, these conditions generally cannot be achieved immediately.

“Therefore, in the opinion of the Government, itjjs desirable both in the interests of consumers and the industry, that these conditions should become reasonably operative before payment is made in full of the short-term price increases recommended, by the Milk Commission. It is clear from the report, however, that in the case of Christchurch and Dunedin some immediate price adjustment to producers for the present winter months is necessary to prevent further deterioration in the supply position.

‘The commission dealt also with the effect on liquid milk producers of the farm costs allowance of .767 d. per lb. butterfat being paid to suppliers to butter and cheese factories during the present season, and has generally recommended that this allowance Ibe taken into account in adjusting prices to liquid milk producers in the four main centres. “The commission has suggested certain margins to cover processing and distributing services, and subject to further investigations it is proposed that existing -margins in the four main centres should, where necessary, be adjusted accordingly as soon as practicable.” Govenmlent Decisions. The Government’s immediate decisions, said the Minister, were as follows: — 1. That, in respect of liquid milk and such cream as is authorized- to be sold in the metropolitan areas of Christchurch and Dunedin respectively, the prices payable to producers for the period March 1 to August 31 shall be: —

1 (a) The increase in prices payable to producers set out above will be met by -Government subsidy. 1 (b) Claims for -producers in respect of the price increases shall be made only by producer organizations, a producer organization being defined as an approved association of liquid milk producers duly incorporated, or an approved organization representing producers in a given area or pool. 1 (c) Claims by producers for increased price -payments in the Christchurch and Dunedin metropolitan areas must be supported by returns duly certified as required for correctness as to quantities and values by the approved producer organizations. Farm Costs Allowance. 2. Producers of milk sold tas liquid milk or cream in the metropolitan areas of Auckland, Wellington, Christchurch and Dunedin are to be granted a farm costs allowance representing an increase in price of .33d. a gallon as from March 1. 1944. (This allowance is the equivalent of the .767 d. per lb. butterfat paid this season to suppliers to butter and cheese companies.) This allowance will not apply to those Auckland producers whose milk is sold raw and who consequently receive a higher price than producers whose milk is -pasteurized-, nor will it apply to producer-vendors, because their increase of ,33d. a gallon as producers will be offset by a corresponding decrease in their margin as vendors. 3. The farm costs allowance of ,33d. a gallon granted to producers is to be paid by vendors, but treating houses are to be reimbursed by the Government, and vendors of loose raw milk whose vending margins over the twelve months’ operations ending August 31 are lOd. a gallon or less may state a case to the Government for reimbursement. 4. Producers in areas outside the four main centres shall be entitled to the ,33d. allowance, subject to the same limitations and conditions prescribed for the four metropolitan areas, provided always that the allowance may be refused if the producer is in receipt of 12.83 d. or more a gallon at the farm gate unless such payment is justified by special circumstances.

5. Provided measures aro taken immediately toward securing the savings recommended by the Milk Commission, 3 -and

subject to general compliance with the conditions of level supply and quality and butterfat standards as defined in the Milk Commission report, producer prices in the three metropolitan areas,_ Auckland, Christchurch and Dunedin, will be raised as from September 1, 1914, to the full amount recommended by the Milk Commission under its short-term provisions. 6. The setting up of a central authority for the guidance and reorganization of the liquid milk industry is endorsed, and the necessary legislation will be prepared as soon as practicable. Pending the setting up of the central authority, provision will be made immediately for an interim organization ,to implement the Government’s decisions and to proceed with the collection of the data and information which the report of the Milk Commission suggests should he obtained. This interim organization will consist of a separate town milk office under the Ministerial control of the Minister of Agriculture and Marketing. In accordance with the stabilization scheme, _ these decisions will not involve any variance in the price of milk to consumers. Summary of Report. A summary of the commission’s report states that in Wellington organization of processing and distribution has reached a very high peak of efficiency in the activities of the municipal milk department on the one hand and of the Wellington Dairy Farmers’ Association on the other, but due to the lack of co-ordination or singleness of responsibility for organizing adequate supplies the full purpose of planned organization has not been achieved. Consequently, in the opinion of the commission the first essential to the attainment of the three-fold object of adequacy of supply, high quality standards and reasonable prices, is the reorganization of methods of control and direction of the industry. The commission recommends that the central authority be given the following powers: (a) To advise the Government on all matters relating to the industry and to interpret and administer the national policy; (b) to compute and determine all prices to be paid to producers, to supply associations, and all margins be. allowed for collection, treatment and distribution, and final prices chargeable to consumers; (c) to assist the various metropolitan milk councils and Wellington City Council in all matters pertaining to the industry and to give gener,al direction and review all powers in respect of each of the main consuming greas; (d) to promote the formation of dairy-farmers co-operative milk supply associations, and to set general standards and conditions under which milk is to sold on the local market. (2) Metropolitan milk councils in the areas of Christchurch and Dunedin and the special area of the Hutt Valley, with powers similar to the Auckland Metropolitan Milk Council. The general purpose of such milk councils would be to apply the policy of the Central Authority ongpll matters ’of standards, prices, and miffgins. and all other matters outlined as being the responsibility of the Central Authority Powers: (a) To require every vendor of milk, other than producer-vendors, within the district under its jurisdiction, to present each year a statement specifying the quantity 'of milk required month iby month by such vendor during the ensuing 12 months, and to require the respective dairy farmers’ co-operative milk supply associations to have available for that area at all times during the 12 months period a supply of milk 10 per cent, in excess of the total quantities specified by vendors; (b) to require the vendors and the producer supply association to enter into contracts for the supply of the specified quantities of milk. Pasteurization Favoured.

The commission is convinced from the evidence placed before it that pasteurization of all milk distributed is desirable as a national policy. It is also recommended that all milk shall be sampled for quality daily and tested for butterfat content on. a composite 10-day sample. The distribution of loose milk, either pasteurized or raw, is condemned by the commission, and in the opinion of the commission the present Sale of Food and Drugs Act should be made to apply so as to require all pasteurized milk to be bottled and not left open to recontamination during the. process of distribution. The commission recommends that in all cases "Forward estimates should be made of Armed Forces’ milk requirements and, that there should be a general tightening up of supply supervision and administration. Regarding farm cost allowance, the commission recommends that the equivalent of the .767 d. per lb. butterfat applied this season ‘n the dairy industry should be applica V to the liquid milk producers in the four main centres. . ; The minority report, it is stated, is m full agreement with all the recommendations of the majority report, except in respect of the functions and powers .of the metropolitan milk councils. The minority report in this regard recommends that the respective milk councils should, in .Dunedin as soon as possible, and in Christchurch and in Auckland, as soon as practicable, undertake the responsibility for Ml pasteurizing and vending of milk in those areas. As a corollary to this recommendation, the minority report is in further disagreement with the majority report with regard to the payment of unearned margins. In this respect, thg minority report recommends that the . unearned margins should be paid in directly to the metropolitan milk councils, who in turn would use those funds in effect to buy out private vendors, and, where necessary, producer-vendors.

WELLINGTON CITY SUPPLIERS Discrimination Seen “I have not had time to study closely the extracts from the Milk Commission’s report which have at last been published,” said Mr. J. J. Maher, chairman of the Wellington Dairyfarmers’ Co-opera-tive Association.. Ltd,, yesterday, “nor the Government’s decisions on that report. It does appear, however, that the Wellington producers are being discriminated against because of the good service which they have been rendering to the consuming public. I ani grateful that the producers in other centres are being given increases, and it appears that the Government intends that Wellington producers should get as from March 1, 1944, the increase in butterfat price given to seasonal producers as from August 1, 1943. It i's~not clear whether the city milk producers round Wellington are to get the increases awarded to factory producers in respect of the year ended July 31, 1943. Factory producers have had two increases on pre-war prices; one of about 4 per cent, for 1942-43, and a further one for 1943-44, which brings the 1943-44. price up to somewhere about 10 per cent, above pre-war rates. It is not clear whether the Government intends Wellington city milk producers to get a 4 per cent, increase from August 1, 1942. till March 1, 1944, or whether for that period the Government intends the Wellington city milk, producer to get only the pre-war price. “The Government has refused to allow representatives of the Wellington producers and of the Wellington City Council to peruse the Milk Commission’s report. This is strongly resented by the farmers, who have been most discouraged through the delay in the redress of their grievances. “Recently numbers of farmers in the 30-miles area round Wellington who have been’ exclusively occupied with cows have reduced their herds, and put sheep on to their properties. If the Government considers if right to discriminate against Wellington producers because they give a relatively satisfactory supply, then I suppose the Government will consider the Wellirgton producer more favourably the more he goes out of cows into sheep.”

WELLINGTON SYSTEM Gradual Continuous Improvement Commenting on the commission’s report, Mr. M. Fraser, chairman of the Wellington City Council’s milk committee said: — “The Wellington system, controlled and operated by the city milk department. has been consciously organized and developed. It has reached the present high standard by gradual and continuous improvement born of actual experience. It has given the consumer an adequate supply of milk all the year round of an unquestionably and uniformly very high standard quality, »as-

teurized, free from all impurities, and safe from all danger of infection. “It has done this at a relatively low price to the consumer, comparing favourably with any other part of the Dominion, while at the same time giving the highest price return at the farm gate to the dairy-fanner of any part of New Zealand, and also taking over responsibility for the surplus milk. , - „ “The incursion to .Wellington during the war rears by such large numbers of the Armed Forces has been met adequately by the city milk department, so • far as milk supply is concerned, without arousing any inconvenience to our citizen consumers. “It is difficult to see how the position of liquid milk supply in Wellington is to be improved by the creation of a central authority, but till my committee has an opportunity of studying the report and proposals in detail, and seeing just how the operations of the milk department will be affected thereby. I prefer not to comment on this aspect of the 111 “The minority report appears to endorse the 'Wellington system m its entirety.”

CHRISTCHURCH. March 1944 winter price level. Md. Increase. April lid. — May 15id. Id. June laid. Id. July 15J d. Id. August 15id. Id. BI arch DUNEDIN. lid. Id. April lid. Id. May I'Sid. Bid. June laid. 3d. July laid. 3d. August 15id. 3d.