NATIONAL DAIRY ASSN.

Greymouth Evening Star, 23 June 1937, Page 14

NATIONAL DAIRY ASSN.

MINISTER’S ADDRESS

(per Ministerial Favour.)

HAMILTON, June 23. Hon. W. Loe Martin (Minister of Agriculture and Acting-Minister of Marketing), at the opening of the National Dairy Association conference, at Hamilton, to-day, dealt with remits of the Association. Appended are the remits and the Minister’s, replies. Remit: That payment by the Government for butter and cheese be made at the factory door or at the time of grading or at some other point before F. 0.8. ocean steamer.

I notice that a number of remits on your order paper suggest that payment be made by the Government for butter and cheese at some point earlier than f.o.b. ocean steamer, and at the recent South Island Dairy Association Conference similar remits were considered. I can say that very full consideration was given to the most appropriate point at which payment for butter and cheese should be made, and the Committee responsible for working out details finally came to the definite conclusion that the point of f.o.b. ocean steamer was the most suitable. I would suggest to the Conference that both from the point of view of the industry and the Government, the present method is the most suitable. The point of f.o.b. ocean steamer has the following advantages: (1) The existing- arrangements,; for transport and storage of produce are in ’the hands of the dairy industry through the dairy companies and their subsidiary cool storage companies. It therefore seems desirable that this organisation and control by the industry should not be -interfered with, unless there are very strong reasons to the contrary. (2) Quantities of butter and cheese are frequently withdrawn from the,export allocation for local sale, and this would cause a complication if payment had already been made for this produce for export. (3) ‘The grading stores throughout New Zealand are almost’ entirely co-operatively owned. This being the case, it seemsßeasonable that the dairy factory companies should have the responsibility of seeing t.o the proper transport and storage of the butter and cheese and that they should deliver the produce ready for export, free on board the ocean steamer.

I have noticed that the representatives of some dairy companies have commented on their increased interest charges, and they have suggested that any additional cost under this heading arises from a longer period of storage than was formerly the' case. I consider that any’ increase iru interest charges arises mainly from the fact that this season with the certainty of the guaranteed price payments, dairy factory companies have been;able to assist tjheir suppliers by making relatively higher monthly advance payments than they were able to make under the old system. This has, in the case of companies working on an overdraft, led to a somewhat greater payment for bank interest. As you are* aware, arrangements have been made for store warrant advances to be made by the - banks at the best interest rate (4£ per cent), the amount of the advance being about 90 per cent, of the ultimate value of the produce. During the season, in some cases there has been a slight increase in the period of storage compared with last year. The Government desires to spread shipments and arrivals of butter and cheese in England as evenly as possible, and in accordance with a programme worked out by the London officers of the Department, in collaboration with the selling agents. It is felt that the industry will heartily approve of this policy. I think any extra cost of storage would be very slight indeed, and would be covered in the general allowance made for factory costs in the computation of the guaranteed price. The guaranteed price plan aims to provide a butterfat payout for suppliers at an average figure. In order to carry out this policy allowance is made in the calculation for the average ascertained butter factory and cheese factory costs. These costs will, of course, include the Items interest and storage. If payment for the butter and cheese and ownership by the Government were to take place at a point before f.o.b. ocean steamer, then the savings in interest and storage costs which dairy factory companies would make would be allowed for in the computation of the guaranteed prices, which as already stated, are designed to return an average butterfat payout to suppliers.

Remit: That any surplus from the sale of cheese under the guaranteed price plan be paid to cheese companies.

Various representatives have been made to the Government in regard to the disposal of surplus in the dairy industry account, and in regard to the keeping of separate pools for cheese sales and the butter sales, were dealt with by the Hon. W. Nash in his speech on the 1936 Budget. Mr. Nash explained that if over the current year, sales of dairy products exported during the present year (i.e. August 1, 1936 to July 31, xa37) produced any sum in excess of the amount paid out by the New Zealand Government, the excess will, be used for the benefit of the dairy industry after consultation with its representatives. If the proceeds of sales are less than the sum paid out by the New Zealand Government, then the deficit is shown in the dairy industry account as an overdraft.

Remit: That a premium be paid for butter manufactured during the Winter months, so that the Winter supply of cream may be encouraged. This remit introduces a suggestion which is well worthy of consideration, and I am asking that the Guaranteed Price Committee consider the matter and make a recommendation.

Remit: That the guaranteed price be based on the costs of production of cheese factories manufacturing 150200 tons annually.

The Guaranteed Price Committee will, I know, give very careful consideration to cheese lactory costs. 1 would remind the Conference that the guaranteed prices are not intended to equalise existing differences in the economic circumstances of butter and cheese factories throughout the Dominion. The aim is to pay prices which will enable cheese and butter factory companies working under average conditions to pay an ascertained price. Remit: That the Guaranteed Price Committee include nominees appointed by this Conference.

The personnel of the Guaranteed Price Committee is: — The-Hon.- Sir Francis Fraser. Mr. G. A. Duncan, Mr. D. Jones, Executive Commission of Agriculture: Mr. J. Dunlop, representing the Southern Ward of the New Zealand Dairy Board: Mr. W. E. Hale, representing the New Zealand Cooperative Dairy Co., Ltd., on the

New Zealand Dairy Board; Mr. A. Morton, President of the National Dairy Association; Mr. N. H. Moss, barrister and solicitor, Stratford; Mr. B. Roberts, M.P., Director of Parkvale Co-operative Dairy Co., Ltd.; Mr. ;A. J. Sinclair, Secretary-Manager of the Te Awamutn Co-operative Dairy Co., Ltd.; and Mr. D. O. Williams, Economist, Massey Agricultural College, Palmerston North. These gentlemen are all of the very highest standing and enjoy the confidence of the industry. Mr. Roberts is the only one of whose political opinions I have anv r knowledge. The Committee will not fix the price, but will make its recommendation to the Government. The N.D.A. has already been recognised by the appointment of its President (Mr. A. Morton). DAIRY FARM INSTRUCTION I noticed in the annual report of your Association that emphasis is laid on the importance of a system of universal dairy(-farm, instruction. The subject will shortly be placed before Cabinet, and I can assure you that the Government will give careful consideration to the wishes of the industry. Farm dairy instruction on the basis of the appointment of men with official status to carry out the work for individual or collective groups _ of dairy companies was started at Kaupokonui in 1912. The number of men engaged sin the work has varied from time to time, but at present there are 39 instructors of this type, and two further appointments have been approved. Of the 363 dairy companies in the Dominion, 85 have the services of an instructor. Instructors are at the service of practically all the more important dairy companies. The total number of suppliers to dairy factories in New Zealand is 70,258, and of these 36,284 enjoy the benefits of an instructor. Let me put it another way. The amount of butter made for the year ended July 31, 1936, was 146,687 tons, and of this quantity 103,180 tons, or 70 per cent., was made by creameries having instructors, leaving 43,507 tons without this service. However, the cheese manufacturers are riot so fortunate. There were 85,555 tons of cheese made in the same period, and of this volume 34,356 tons, or 40 per cent., were made under instruction, leaving a balance of 51,199 tons without that supervision.

In 1913, before the present system of farm instruction was established, an (inspection of 600 milking plants showed that 23 per cent, were in good condition, 27 per cent, fair, and 50 per cent, were bad. In 1935, of the machines inspected, 50 per cent, were good, 41 per cent, fair, and 9 per cent. bad. Experience shows that ini districts where the work has been undertaken for the first time the conditions are similar to those found by the pioneer instructors in 1913. These , figures provide concrete evidence of the service which is being rendered by the instructors' who are tackling the problem at the root. Unless the raw material for the manufacture of butter and cheese is of a high quality, the efforts in the factories themselves will be largely frustrated.

The conditions under which these officers have been appointed in the past have been that the Government pays half their salaries and the dairy companies, the other . half, plus the cost of transport. The minimum number of suppliers required to qualify for the full subsidy is 500. It has been estimated that an additional 38 men would be required to cover those districts which are not fully served, »and a total cost to the Dominion would be 0.0266 d per lb. of butter-fat. In allocating the cost as between dairy companies, the practice followed in the past has been to base it on butter-fat in some cases, and on the number of suppliers in others, as it has been recognised that circumstances vary. •In some districts the number of suppliers per ton of butter or cheese is very much greater than in others, and the allocation is not always equitable when based on either fat or suppliers alone. It has been suggested that if the contribution from the dairy companies were based casually on the weight of butter-fat, and the number of suppliers to the company, this inequality would be reduced, and some consideration will be given to this point in the event of the Dominion scheme being established.

A feature of recent appointments has been the number made at the request of dairy companies which had dropped out arid had later asked for the re-appointment of officers, while correspondence has been recently received from others who have the parttime service of an officer, and who are asking for his whole-time service. It must be kept in mind that the dairy instruction service is primarily one of instruction, although it is necessary in exceptional cases to make it one of inspection. The number of cases in which this attitude must be taken is fortunately few. Combined with the milk and cream grading system, it has been responsible for a definite improvement in the standard of the raw material being delivered to our dairy factories.

REVIEW OF SEASON

Although the dairy year does not otficially conclude until July 31 next, it is possible at this stage to indicate its outstanding features. The season has been one of the wettest on record, and, although the volume of production has been more than maintained, the moist nature of the pastures has made the maintenance of quality a difficult problem for the manufacturers. At the beginning of the autumn there was a turn for the better, and the comparatively mild weather gave an impetus to production. The result has been that, while the statistics relating to the dairy industry at the end of March last were not, perhaps. as favourable as anticipated, it is expected that autumn figures will be unusually high. During the year ended March 31 last, 151,436 tons of creamery butter and 59.9G6 tons of cheese had come forward for grading, compared with 1 15,990 tons of butter and 86,250 tons of cheese for the previous year, an increase of 5,446 tons (or 3.73 per cent.) and 3,716 tons of cheese (or 4.31 per cent.). On a butter-fat basis the increase was 5,968 tons, or 3.85 per cent. I think you will agree with me that in the circumstances the figures are most satisfactory. Owing to the phenomennally high rainfall, districts such as North Auckland, Hawke’s Bay, Nelson. Marlborough and Canterbury, which usually suffer from a lack of rain in the summer months, have been ideal fordairying, hilt in Westland and Otago I and Southland conditions have been unfavourable, and extremely trying for the farmer. It is perhaps worthy of note that the Auckland province has. in the year ended March 31 last, on a butter-fat basis, contributed 58 per cent, of the total exports. Ten years ago Auckland's percentage of the total!

exports was 47.5 per cent. May I congratulate the farmers of the Auckland province on their achievement. The reports of the Department’s officers in the United Kingdom indicate that our butter and cheese has been well received on that market, and have maintained their high reputation for quality. Our butter has made inroads on to some of the markets in the North of England, where the Danish product has its strongest appeal. There have been no major faults in the quality of our butter, but openness and mould have marred some of our cheese. The question of openness is still an unsolved problem, but I am glad to say that in this respect there has been an improvement, and there is no indication that the mould position is more serious.

CUTTING PRODUCTION COSTS

[FEB PBESS ASSOCIATION.]

HAMILTON, June 23.

“We cannot go on raising the guaranteed price again and again, but having once arrived at a fair price to pay for dairy produce, wc must turn our attention to cutting the costs. There are ways in which we can do this, and we are going to devote a good deal of our time to it,” said the Minister of Agriculture at Te Kowhai. He added that costs could be cut by the reduction of the interest rate, rationalisation of methods of production, lowering the price of manures, and by the efficient working of the zoning system. Manure prices had already been stabilised io some extent, and something would probably be done to reduce the number of man-ure-producing factories in the country. There were at present, only two working up to their capacity, although the output had increased generally. Something had already been done with zoning in the Waikato, continued Mr. Lee Martin, and the zoning principle would prove one of the best things which has been done for dairying.

The Minister stated that, good work had been done with the housing problem. Tenders had been called for 1000 houses, and it had been hoped they would be finished by now. In reply to a question. Mr. Martin said the rent would he 15/- shillings lower in Wellington than for any other house of equal standard; also (he houses being constructed by the Labour Government were of higher standard than tiny built by any local body or past Government. They did not intend to restrict activity to towns, but also to build in the country. Although this had been investigated, it presented many difficulties, and he thought that if that were the policy pursued it would do a great deal towards solving the farm labour problem. The main trouble with farm labour was not wages or the fact of having to work in the country, but. adverse conditions. If they were gi.v_en good .accommodation. he felt tjqre that they -would work on (he farm..

ACCOMMODATION INADEQUATE HAMILTON, June 23. The chairman, Mr. A. Moreton, and

several delegates to the National Dairy Association annual meeting, today, severely criticised the lack of accommodation for 400 delegates to the National Dairy Federation Conference opening to-day. Mr. Moreton stated that, in future, the conference must be hel din a venue where there would be sufficient accommodation available. New Plymouth had guaranteed such accommodation.

Other members suggested Palmerston North. 1 The matter was adjourned till later in the conference.

SUMMERTIME LIMITS WHANGAREI, June 23. That reverting to standard time in February, instead of in April, would benefit the farmers, was the opinion expressed by Mr. J. H. Hayward, of the Maungatapere Dairy Co., at a meeting of the Whangarci Chamber of Commerce. The extension to. April, he said, had an effect on cream

collection. Most of the companies collected daily, and (he waggon had io start at 7 a.m., at least, at the far end of the run. It was impossible for these suppliers to get their cream out in time, and it had (o be held over, Iwith consequent loss in quality. Mr. Hayward proposes to move, at. the N.D.A. conference, that Summertime he terminated in February. The Chamber is to conside rthe question at its next meeting. '