DAIRY DEBACLE

Evening Post, Volume CIV, Issue 37, 12 August 1927, Page 11

DAIRY DEBACLE

HOW IT CAME ABOUT

PRICE-FIXING SUICIDAL

Mr. H. C. Cameron, formerly Produce commissioner in London for the Dominion Government, in an interview to-day, assured a reporter of '' The Post that he had long been in favour of a board, closely identified with the New /lealand dairy farmers' interests, being located in London to watch those interests and effect improvements generally iv the industry. His experience had convinced him of +he necessity for this. He was not, however, in favour ot such, a policy as that introduced by the Dairy Control Board. "Eecognismg from its initiation how unreasonable it was, I at on , wrote to the New Zealand papers directing attention to the unfairness and harmfulness of it to the New Zealand dairying industry " Mr. Cameron added.

Price fixing, as carried out by the Control Board, is absolutely unbusinesslike and suicidal. While I object, like so_ many others, to the hard-and-fast price-fixing introduced, I am in favour of the London board, in consultation with the distributing agents, determining prices at which New Zealand butter and cheese should be sold, but these prices should not be publicly published broadcast throughout the country as has been done.- They should be treated [ confidentially. v "GIVE AND TAKE." "There should be some opportunity for a little 'give and take' in effecting sales, and this could be arranged between the board and the agents, as is done in the case of Australian produce. I consider it will bo deplorable if the former system of disposal of New Zealand dairy produce is reverted to. Speculative buyers of outputs or! factories, f.o.b. in the Dominion, use their purchases to further ■ their own ends. They have no interest in the welfare of the factories. Naturally their object is to make a proiit. This is not, however, secured always by selling the outputs they have bought at a higher price than they paid for them. It may pay them indirectly to sell at a loss, and, so, by .'bearing' the market, and injuring those factories that have not sold, reap, their profits from other transactions. These speculative buyers, natI urally, may expect to be able, while losing money at the beginning of tho season, when shipments are light, to recoup themselves as the season advances and stocks become heavier, by buying at low prices when the market lias been forced down by their tactics. One thing that should not bo overlooked by factory directors, is that it does not always happen, when sales are effected by them, that their butter or cheese goes into consumption and is thereby taken off the market. Very frequently such sales merely mean a transfer to some other holder and so stocks on hand are not reduced." A CONSIGNMENT POLICY. Consignment through a board of producers' representatives for distribution by _ agents, selected by the dairy factories and approved by and in close association with that board, is, in Air. Cameron's opinion, the proper method for securing the best results. 'There must, of course, be continuity of policy and mutual confidence between the dairy factory and its agent, he holds. Distributing agents acting for consigning factories have an incentive to push individual brands which they handle regularly. Price is charged to buyers according to the state of the market, and net returns to the factories should be the proof by which any system should bo judged. "There should be one uniform system of -disposal *of New Zealand dairy produce, and I consider, from my many years' experience, that regular consignment to selected distributing agents, working in association with the London board, is certainly the one that will give the most satisfactory net returns to the dairying industry." PKOSPECTS GOOD. i The prospects for next season, as far as can be ascertained so much ahead, appear to Mr. Cameron to be good, and, I probably, if competition amongst distributing agents on behalf of their consigning factories is again normal, payable prices should be realised. If, however, speculative buyers are, as formerly, encouraged to operate, then, he contends, it will be difficult to foretell the result—it may be disastrous. It is not possible for any board to "control" their operations. "Absolute control," in his opinion, may be required, as without it the board might be impotent to carry out its duties, but that great pjwer must not be enforced, unless absolutely necessary. "Moderate control," as indicated, is desirable. '' UNJUSTLY BLAMED. '' Mr. Cameron, in referring to the Government member of the board in London, said: "Mr. Stronach Paterson has, I consider, been unjustly blamed for antagonism to the Dairy Board. He foresaw, as many other experienced business men did, the inevitable result of such tactless and autocratic management as that initiated by the board, when introducing its policy, and, in his endeavour to stem disaster, protested against its continuance. In this Mr. Paterson, in my opinion, was absolutely Tight. Had ho not done so, he would not have been carrying out the duties for which he was appointed by the Government."