BUTTER POLITICS

Evening Post, Volume CV, Issue 146, 21 June 1923, Page 11

BUTTER POLITICS

DAIRY EXPORT / CONTROL

ADOPTED BY TWO TO ONE MAJORITY

REFORMS DEMANDED BY 1>RO» DUCERS.

" DISCUSSION AT PALMERSTON CONFERENCE. ; (IT TELEGRAPH.) (P«OM OUR SPICIAI RIFORTER.) PALMERSTON N., 20th June. \ Sitting until 6.15 p.m. to-day the Dairy Conference'finally decided by one hundred and one votes to fifty to approve the Dairy Export Control Bill. The discussion began at 10.30 and continued all day with considerable anljnation, . The speech introducing the ..subje.ct, made by Mr. William Grounds, of Hokianga, lasted one and three-quar-ter hours*. Mr. William Grounds (Hokianga), in his address spoke 'on lines almost identical to those he has adopted at previous ..meetings addressed at Dunedin ahd in various places in the North Island, and which have been fully reported from time to time. Mr. Grounds reviewed what had been done since last conference—the demand for a Dairy Export Control' Board along lines idenvital with the Meat Export Control Act. He epitomised the general purposes of tilts Dairy Export Control Bill, recapitulating what lie nad said in other centres, liv contended ■ that it would, be absolutely incorrect to say that the Hairy Council as proposed would be an irresponsible bouy. That was aJI humbug. In the election ot the Dairy-! Council it was -recognised that the I'aetury,' not the producer, should bo the unit. A voice: "1 don't think that's fair." Mr. Grounds, continuing, said with re- ' eynai to London control they must have someone in close touch with.conditions there. There was no desire on the part of the industry to.get behind any legitimate contract, that had been entered into. Most, of them would, in any case, bs expiring in course of two or three'years: Tfie board should be responsib.le for contracts in relation to carriage '-by sea. Tho Dairy Board would not be subject to the Meat Board in this respect,'but on the same footing ,as that,. body. By coalition they would'-secure a very satisfactory . positionl for the dairying industry in the negotiation of any-'.future contracts for .the sea carriage of dairy produce. There would'be no/question'of misuse or misappropriation, of the funds levied under the' Dairy Export Bill, for the funds would -be paid into the consolidated revenue and subject to Government audit. The.producers' point of view never can bo lost sight of upon the elective basis of the council to bo appointed. DISPARITY WITH DANISH. -. Ml':-Grounds-pointed to the disability the industry was labouring under last seaeonuwhen* there i'.-wasTi "disparity of ■56s per cwt in favour, of Danish butter as compared with Ne^ Zealand.. ■'■■They prajjosed td reniove: such disparity and cut ;out "the speculative manipulator," placing the price of the produce on an even keel. He described 'the bad influence upon the market of forward, who"'merely manipulated the market. As for shipping contracts, they wordd never be in a satisfactory position, as •there, was nobody, with sufficient power .to go into the shipping freight markets of the world and make the best arrangements possible in the interests of the producers. He instanced the influence of three powerful chilled beef firms in * the Argentine, who were able to negotiate shipping arrangements.so completely as to serve the British market regularly, putting a boat into London every Friday, and the meat going straight 'from-the ship to thfc shop. Similar facilities 'should be obtained : for New Zealand dairy -producers; but they could not until some "au'thoritative^body was set up, as the Bill provided. "We have no desire to get away from the Meat Board in connection .with negotiation of shipping contracts," he said. _ The two .boards acting in conjunction would be able to have the best possible shipping contract in their pockets in the best 'interest of their industries. , '.' * : It was absolutely essential to establish .ajn intelligence.department. Ho .quoted from "Wcddel's, Review" and from Sic '-Chomas Clement! "to show the high quality of-'New Zealand, produce, New Zealand butter being equal to Danish; and New Zealand-'.,cheese equal. toX'anr adian. Regularity of delivery ensured the'p-remimn. of price iii the case of New' Zealand.* butter:; *\Th'u premium of Dan-, ish over New.Zealand: wais an-average of I3s per cwt., but during the "slump," covering .seven weeks, the average difference in-, favour of Danish was 265. There were six boats at once carrying 455,490 boxes of butter.; New Zealand lost £296,000 during that six weeks in relation to the price of Danish. He averaged a loss of 20s per "cwt on the whole period—a loss to this country of £2,5000,0Q0-^due . to irregularity ' of supplies. ■■' With' such a serious: loss it Was absolutely essential that • someone must 'take this matter in hand. - REGULAR SUPPLIES, REGULAR PRICES. '.Mr. Grounds said he had received assurances that a regularity,; .of supply ivould ensure a regularity of price. A proper authftrity, exercising cbntrol, colild supply-to markets other than London with what they could consume; He instanced losses entailed by shipping to Alan chest or, butter having had to bo sen), there by rail to London, or sold in Manchester sit a loss in* the caso of a glut of supplies. '■■"Advertising was also referred: to by Mr. Ground?, who insisted upon the goods being available when the demand ; v.s;.s .created by advertising. He in- ' Rtancccl the demand ih-*the Far East for ■ New Zealand dairy produce, citing the .case., of *3;^ being :glndly-paid in 'Japan fur- New Zealand-butter in preference '. to the local article. , But they could not ■ profitably exploit now markets without ' n vell-qnalifibcl 'intelligence department tv ascertain ivhnt the amount of dairy produce, the.', markets could absorb. T'Tance-Was.also instanced, as a market for New. Zealand. butter. A serious disability under: -which New Zealand laboured and which a .powerful organisation . could deal .with, was the'fact, that while boats with .butter from - Australia could laijd as' low as 5000. boxes of butter, no boats, would go from New Zealand ■with less than 50,000-boxes/ The merchants recognised that shipping arrange.ments were in need of improvement, that, freights were too high, and that regularity of shipments was desirable. In,fact, the merchants wore at one mind with those who advocated the Bill. : -X 0 FINANCIAL DIFFICULTIES. At .first- the Government were asked

for the same financial support as was accorded to the Meat Board ; but when the Dairy Council again considered the matter it was realised that- there would be no difficulty in the financing of the dairy industry. There was 'no need for endeavouring to obtain something from the Government that was not likely to Lie supplied. They could obtain'all the financial accommodation they required through the associated banks. H was absurd to say that individual factory companies could obtain better financial arrangements than the industry organised as a whole. The whole of the financing is done in the value of the produce. Those who had entered into the'agreement wtyld only back their opinion upon the realisable value of the produce itself. A financial arrangement could be made with the associated banks as good as through other agencies up to 80 per cent., The other 20 per cent, was a necessary margin _to secure factories and institutions against 1 market risks. Possibly with a more steady market they could obtain a greater advance than 80 per cent. . ■INDIVIDUAL v. GENERAL INTERESTS. It was preposterous for any individual to think lie could do what he liked with his own in this matter when they conflicted with general interests. The individual interests of the small company would, however, not be at a disadvan-tage-to those of the. large company, pro, viding the quality of the output was as good. He disapproved .of sending, a commission Home to inquire into conditions there, as a waste of money. It was time t*?at old John Stewart Mill's ideas of supply and demand were abandoned in face of the many agencies that were now at work affecting them. There must be a satisfactory organisation acting with thoioperauon of the law of supply and demand. Those favouring control were not attempting to fix prices in the abstract, but were trying to bring their own prices into harmony with prices for similar products .from other eountrie's. Consolidation of interests was a world-wide movement t#d,iy. If they did not consolidate tho dairy interests, then they would be consolidated by other people in their own interests. He knew that there was n combination of interests against this development of .* tho co-operative movement, and a fighftnjj; fund hud beou' formed for the purpose. Were they going to weakly take the position of handing down this position to posterity? . Voices: "No, no.',' . '• ■ j Mr. Grounds concluded: "I will move —'That Parliament be urged to pass the Dairy Export Control Bill.' " . Mr. J. B. Corriga'n, ..M.l'., seconded. Tha existence of every, dairy company depended on the Bill. No one on the council was looking.; qufc. •for "a soft billet." He.abjured the irieeting to dismiss personalities'from their minde. Mr. Mac Donald (Levin) said ho had heard from Mr. Grounds one of the best speeches on. a farmers' question that he had ever heard before. He criticised details in the Bill which needed amendment ; but agreed to the Bill in principle. -Mr. Hubbard (Palmerston North) sugigested a cool store in London to regu-' late supplies from there. COMPULSION NECESSARY. Mr. 0. Williams. (Kairanga) strongly criticised the compulsory, clauses of the Bill. He pointed out that the Meat Board had not exercised compulsion (although, it had the power to do so), because it had seen it would be a mistake to do so. So he believed it would be with the case, of £16,.0Q0,CC0 of. dairy produce. ■ Mr AVilliam Perry (Masterton), as a •member -of"the' Meat Board,' said" it j started off without compulsory grading ; . and the dairy industry-had that advant- : age without ck>mp"u. Ifiiou, nothing could be-dotie. The work of the Meat Board was then described, and most satisfactory improvements had resulted from its operations, especially in respect to loading on the bouts. In fact, the loading of butter and cheese 'whs also looked after by the board. The board had been successful in obtaining .reductions in. freights: also, in effecting a- great improvement in tho port freights from- l|d to Id. What the Meat Board had saved for the producer whs greatly in excess of what the work cost. Meat had been kept back in New Zealand in order not to glut the market, and had no doubt saved the market from si smash. A voice: "Was it not the fact that we had not the meat to send?" AGAINST THE BILL. , Mr. Perry said that, was not so. There was no chance of do'/» anything:: unless they had' absolute control of "their prodiioe. Mr. Perry' called attention to the erratic shipments that had been made.' This could not be corrected without some controlling authority, 'Mi-: ll.' E. Pacey (Palmerston North)' thought Mr. Grounds's excellent speech was. vulnerable in parts; but'it . was. .really only an indictment against ■ the National Dairy Association, the execui tive "of which 'was to constitute the* council—r-. '... Voices: "Rot!" *'■ . Mr. Pacey said tho National Dairy As;-.-sociation could run as*successful an iTif "telligence department as any under leg^"; islatjye conditions. The,;.association coul^ negotiate as successful a freight contract as a council could. Market-rigging was to bo deprecated, blit' no matter' what they.did people who bought, on a -low market and held it to sell -on a high _could, not be dealt with.' '■ .... Voices: "Rot!" "No, no." - " In any case, said Mr. Pacey, whatev.or they did with New Zealand produce there would still bo 72 per cent, supplied by other competitors with which market-riggers could deal. In fact, mar. ket-rigging could bo done more successfully; "he believed, under control 1 than at - present. He instanced, to- the accompaniment of derisive laughter, the gains made by New Zealand producers at,the expense of toward buyers. Violent fluctuations were due to tho greater pre-war make of butter in the Northern Hemisphere, a? compared with the outputs to-day ; whereas the quantities'from the Southern Hemisphere were variable. The fluctuations were due more to economic conditions than to market-rigging/ For cheese they obtained practically the name price as Canada did, without control"; but the Danes made butter all the year round. If they wanted to set the Danish price, they would have to" manufacture the saitii! quantity all the year round and send it to England. The variation in tho Danish production was but 10 por cent, less in whiter than aaiy other part of the year. If they held butter in Now Zealand to sell in summer in England they would have to face the expense of holding and risks of lower markets. In another three years the advantage of. a summer market in Eng- I land would have passed away. Mr. E. Maxwell (Kaliui) entirely disagreed with the ■ substance of Mr. Grounds s speech. He }„,d evaded all the vital points. He counselled against, any tinkering with sin industry so prosperous as the dairy industry. He denied that the producer would have control of his produce. : That would be exercised absolutely by the -council. Representation was practically nil; One© the board came into being it was the most powerful m. the British, Dominions. They would sacrifice their liberty to the council with no recourse. Shipping conditions should be improved, but they must j not give control ovr,- shipping. If that cower were given Toolev Street wouldbe paralysed. • • A voi<*»: "Anothor boccv," Mr. Mjucwelli. ''Jf» fcpgey ti, i]J>

but it is a 'serious thing to give to a board of eleven men the disposal of £16,000,000 of dairy produce." Any arbitrary attempt to regulate quantities meant keeping buck produce. If the Bill had any merit at all it was a 'butter-maker's Bill. It did not affect the cheese man who wanted to get his produce on to the market sis quick as possible. Held-ovjr butter was not so good as fresh butter. They v.'ere trying by arbitrary means to overcome natural features, and Mr. Maxwell instanced the advantage of Denmark's proximity to the market. Held-over. butter would be inferior butter, and would realise a lower price. It was dangerous for the grading season to hold over produce. The present finance system was excellent, and there was no trouble with it. Goods were not the security, but the power to liquidate the goods was the real security. The proposals of the advocates of the Bill were too dangerous. "AN ADVERSE MOTION. Mr. Maxwell moved, as an amendment to Mr. Grounds's .motion :—"That this representative meeting of dairy companies hereby resolves that—(si) the Dairy Produce Control Bill, which was submitted to the last Parliament, is en--tirely unacceptable, and should be dropped ; (b) the Government be urged to appoint a Commission of, say, five persons, including an advocate und an opponent of the 'Control Bill and three independent business men of recognised standing and ability, to investigate shipping conditions and to report on what improvement can be effected in connection therewith ; (c) pending such report, no legislation should be enacted." . .THE BALLOT BOX. Mr. Macmillau, M.P., denied that tile board was out to make jobs for themselves. Mr. Maxwell's arguments had no weight whatever. The board's intention was to accelerate shipments; but if the method of election was wrong, then they should resijtt; as Mr. . Massey had suggested, to the' ballot box. : He did not pretend the Bill was perfect, but it could be'adjusted to deal with the necessities 0f....-the case. The. _Government* made provision for the inclusion .of business men on the*, council. There was no reason why they.should not have tha best possiblo brains in the Dominion on the council. It was ridiculous to say the council could, notrobfriin finance. It could make better terms with a. business worth £16,000,000 than with one worth £5,000,000; they would, in fact, obtain better facilities for finance than they could obtain in their present condition. The industry must have better shipping control. There had been a glut and a famine, a glut and a famine all through last season, like an engine hitting and missing running down the street.

IU-. Gibson (lialioutu) held that iiie i oppositipn had done good in being instrumental in the modification of many proposals previously put forward. The asking for compulsory control was a confession of failure. He would not like it to be thought that there were not sufficient men in New Zealand of .ability enough to act without compulsion. It was desirable to -'maintain regular: supplies all the year round: but that was not possible. The agents were rto be used; but nothing was said about relief of' the 2z per cent, eoriimission. Was.ithp control going to save that? If not, where was the 1 advantage! He deprecated substitution, of. the human element in the agent by a machine-like corporation. A3 Mr. Grounds said twily. there was a demand on one side and a heavy supply of butter and cheese and meat on the other; but Mr. Grounds did-not say-that?.there vt'tVsvw&^piw^iaSiirig"'power.. So far as his opposition; it as concerned, he derived nothing from a-.fighting feind. The farmers could not have carried out the financial arrangements of the past without the money supplied by the merchant. He seconded' Mr. Maxwell's amendment, and condemned compulsion. He., defied ,;Mr. Macmillan/or the Government to apply .compulsion, to the goods being consumed in New Zealand. They dare- not do it. Then why -apply it to another part of the Empira? Mr, Cook CVVaip'ukurau) said'he came tv the conference to oppose the jiill; but he had been converted on the matter of finance. 'Would the butter keep over six months if held '! Voices: "Yes, yes." Mr. Cook: "Very well, then, that solves the problem." He was a convert to the Bill. 1 Mr. Bond (Bainesse) opposed the Bill, which he said was fathered by Mr. Grounds, and mothered by Mr. GoodfelIfiv/. Mr. Rowlands (Mangere) said the producers were asked to give a, blank cheque, which was impossible. Particu-. lar factories would lose their identity by' pooling. ' ■: M-v. Tosland (Pihia) opposed the. Bill on-account of the many pitfsills therein. They coulcl-not control the causes of fluctuations in prices, such as unemployment ■and-climatic condition. Why not take the merih/ants into their confidence? They •Vere.'surely- not /all manipulators. • • -.Che 1 H6IV. M. J!. Gow, in supporting, .the Bill, said it.did not follow that com-pulsory'powers-would bo exercised in an \fvrbitrary way.''-One stick was easily , broken'.,but. a bundle could not be. The :>tie.to bind ;them in a firm bundle--was compulsion. ' He conceded that there were many- honourable merchants,,and producers were prepared to deal honourably'with honourable men. They must' have compulsory'powers to,use when necessity arose in the producers' interests. It had 'never come into operation with the Meat Board. Compulsion must be lii the Bill to/make'it effective. Mr. j: A. Kurth held the Bill could carry the producer too far. He was dead against holding chease for a market to rise, because of the loss on shrinkage. Ho. was absolutely against compulsion. Let them go ahead, and if compulsion was a good thing the producers could take it up after a trial. • BLANK CARTRIDGE. - Mr. ■' Harding- (Northern Wairoa) said all the opponents to the "Bill had fired blank cartridges. Nothing had been said to refute the fundamental objects of the Bill. If the Bill was not carried they 'would be anchored in a very difficult position for a good many years, and not ready to meet the competition that they would have to Face. The safeguard' of general interests would bo secured by Government representation on the proposed board. He dismissed the fears of prejudice of the interests of the producers by the principle of compulsion. Mr. H-anfnrd (Stratford) opposed t-ho Bill for want of sufficient -information as to details of the scheme and safeguards of the industry. He objected..to the .Government collecting the:proposed levy on produce. I>airy farmers should not allow the Government to have i|ny further finger in the pie than it now hail in taxation. 'He opposed thp building up ol big reserve funds, and was not enamoured of Government assistance in running the producers' own business. He doubted if the Meat Board could claim credit for a reduction of freight charges which Australia and Argentine had secured without meat boards. ■ _ .' Ml. Moss CliketaJnina), a 1 member of the council, considered the safest.method was that the Government should handle the levy. Personally he had every respcut for Government officers. Ho reminded farmers of the 1 want of-true cooperation, for where did farmers sltuid 1.0 their agreements when .they could dodge them in the interest?, of their pockets'' Were they prepnrutl tv set gui-iiil--one eke to cvuU'al Liiek Lweuicss or wcrg

they to retain control themselves? Mr. Corrigan said there would bo no difficulty in finance. When produce was held up in store where did they get their .finance? From TooJey Street? . Voices: "Yes' and "No." . Mr. Corrigan: "No, we financed on store warrants." No opponent had offered any constructive criticism. The council was appointed by the producers, and they had put in their best and had put before the producers what was a solution of the whole problem in the best interests of the producers, small and great.. Compulsion was the essence of the contract in the whole scheme. ■ Mr. J. Hine (Tikorangi) opposed the Bill as vicious in principle, economically unsound, and unwarranted interference with the business of the producer. "We wish to mind our own business, and we are not prepared to hand it over to others. We have the competition of the whole market to protect our interests." When the scheme was formulated' one man who should have been consulted was ignored, namely Sir Thomas Mackenzie, the. man who had done better for the producer than any other man. Mr. William Grounds, in replying, paid-there was no intention of scrapping institutions that had done good service, nor of- tinkering with the industry. If responsibility .were conferred upon the body, 'sent Home to confer with Xooley Street it would' be in the best interests I of producers, and would avoid any competition, which was prejudicial to the dairy export trade. . The Dairy Council would go to the producers as a living organisation, to the good, of industry. It -was impossible to discuss finance until "iven authority to deal with the position. \n individual factory had no hope of reducing exchange charges or obtaining other relief. The only hope is m consolidation. The vote taken on Mr. Maxwell s amendment resulted 49 for and 110 against. The vole taken on Mr. Grounds s motion resulted 101 for, 50 against,