NO NEED FOR ALARM

Evening Post, Volume CXX, Issue 124, 21 November 1935, Page 11

NO NEED FOR ALARM

DAIRY FACTORIES COMPULSORY CLOSING COMMISSION'S DENIAL The Executive Commission of Agriculture has issued a statement denying that it has in mind, as has been stated, the compulsory closing of a number of the smaller cheese and butter factories.

"The position," remarks the statement, "is that the Commission, so far from being desirous of exercising compulsion, has resisted efforts that have been made by some dairy factory companies to induce it to use coercive methods. The advent of home separation and the provision of good roads and efficient motor transport have brought about considerable changes in the dairying industry. For example, small cheese factories situated in close proximity to butter factories have found their supplies of milk diminishing year by year, owing to their suppliers deciding to install separators on their farms and to send their cream to butter factories. The suppliers, in making the change, have been influenced by a number of considerations, among which are the saving of the time and expense incurred in carting whole milk to a cheese factory, the availability of skim milk for feeding pigs, and the relatively higher payouts for butterfat made by butter -factories during recent years. "It is obvious that a small cheese factory, especially if it is situated in a mixed farming district producing a limited quantity of milk, cannot lose even a few suppliers -without having its manufacturing and overhead costs proportionately increased and its payout correspondingly reduced, which inevitably leads to a further loss of suppliers. A larger cheese factory situated'in a purely dairying district, with a large milk production in its immediate vicinity, is not seriously affected by the loss of a few suppliers; ani owing to its lower manufacturing and overhead costs; it is generally able to show pay-out returns comparable with those of neighbouring butter factories. "The Commission received requests from a number of the smaller cheese manufacturing companies, which were apprehensive of their position, to visit them and investigate the possibilities of their being able to carry on successfully. In some cases the factories and equipment were old, and questions of rebuilding and renewal were looming up in the near future. It was frequently found that no provision had been made for a rebuilding fund, and that, even if the whole cost of rebuilding and re-equipment were found from long-term loan moneys, the interest and sinking fund payments would seriously affect the pay-out to suppliers. In investigating the affairs of these companies, the Commission had associated with it a sub-committee of the Dairy Board, in order that the direct representatives of the industry might take their full part in the Commission's inquiries and deliberations.

ZONING OF SUPPLIES. "In a large number of the cases investigated, a request was made that the Commissipn should exercise its powers-in the direction of zoning sup? plies; that is, in plain English, compelling all dairy farmers whose farms were situated within a distance of three or four miles from a cheese factory to send their milk to it, and to discontinue sending their cream to a butter factory. The Commission and the Dairy Board representatives in every case declined to accede to the request, on the grounds that a dairy farmer had the right to decide whether he would supply whole milk or cream, and that it was unjust and unreasonable to insist on his supplying whole milk to a cheese factory if he considered that it was more profitable and more convenient to him to send his cream to a butter factory and to utilise his skim milk for feeding pigs. "The purpose of the Commission is to safeguard the interests of suppliers, consistently with the maintenance of the quality of production, and to ensure to suppliers the best possible payout returns. It must, therefore, regard the interests of the dairy companies, where they cannot be reconciled with those 'of the suppliers in their area, as secondary to those of the suppliers. At the same time, the Commission has been anxious to protect the small cheese factories as far as possible. It recognises that they have rendered good service to the industry in the past, and it regrets that they should now be the victims of progress."

READY TO HELP. The statement concludes by pointing out that wherever it has been possible to suggest methods by which factories may continue to function with a prospect of success, the Commission has been ready to assist. "The Commission has no thought of throwing 'thousands of dairy factory employees' out of work, as has been suggested. The number of uneconomic dairy factories is not large, and they have very small staffs. The early absorption of such undertakings by larger and more efficient units would enable more of their employees to be given employment in the factories of the purchasing companies than would be the case if they carried on manufacturing until lack of supplies compelled them to close their doors. "The work of the Commission is vitally concerned with the interests of suppliers and of dairy companies and their employees, and for this reason it considers it necessary to make it clear that it has in mind no destructive or arbitrary policy in respect of dairy factories, and that it certainly has no intention of exercising compulsion to eliminate those factories that must, in the nature of things, soon cease to operate, or to place unnecessary restrictions on dairy farmers. The Commission is anxious to remove any misunderstanding or misapprehension thai may exist regarding its functions and intentions in so far as they affect the dairying industry, and, whileavoiding all political issues, has made this plain statement of fact in order to clear up the position."