DAIRY REPORT

Grey River Argus, 19 October 1934, Page 8

DAIRY REPORT

MORTGAGE BURDEN Will State Assume It ? The following is the substane of the report o! the JJ:.iirv Commissiiou — the recommendations-(-1; We recommend the suiting up at an early date ot a Kura. Mortgage Corporatism, through hvhicii farmers will be able to obtain long term mortgage credit at the lowest current rates of interest and on easy terms of payment.. The recommendation provides for existing mortgages being taken over by the Corporation in exchange for bunds carry mg a State guarantee lor the payment of interest. It is recommended that the rates of interest payable on bonds and on mortgages shall be adjusted trieunially, in order to afford to bondholders the current rates of returns on Government securities and to give to mortgagors the benefit of the lowest possible current rates of interest. The recommendation makes jirovision for the taking-'over by the Corporation of existing mortgages and for differentiating between the sound and. -the less sound portions of mortgages taken over by the Corpora * lion. It is proposed that the portions against'which bonds cannot be issued be placed in a suspense account, and that the forming operations of those morttgagfors 'wlhose surplus indebtedness is so dealt with be efficiently supervised in their qiw- u interests and in the interests of their creditors. The setting-up of expert bodies is recommended for the puipose of ascertaining which farming propositions are basically sound, and arranging compromises with mortgagees and other creditors wh<*:e necessary.

(2) In the belief that the factors of efficiency of production and quality of product are of paramount importance in meeting competition in oversupplied markciis. and building up an increasing prefe'rei.tial demand for New Zealand dairy-produce we recommend that early steps be taken tu improve its quality, and that the Government make available, at lunv rates of int'cC'cst, to farmers aaid; (dairy - factory companies sufficient funds to enable farm and factory equipment and appliance’ to be modernized and rendered efficient, for the production ’and manufacture of dairy-produce of the highest possible qualify. We also recommend a •conn! ehfnsivje attack on animal diseases, which at the present time are the cause of considerab’c direct, loss to the industry and have a bearing on the quality oi dairy-produce. We further recommend that Ifai'iu and factory instruction. research work, and herd-testing be placed on a sound basis, wi/.h the object of giving the dairy industry all possible assistance tow-ard-s efficient economic production. In order to proyide part of .the tinance required for the improvement of quality, we recommend that the Dairy Produce Control Board be empowered to control the local marketing of butter and cheese, and thereby to save, for the benefit of the industry as a whole, a large sum that is lost annually through -wasteful competitive pracices, which are considered to be specially undesirable in a co-opera-tively organised industry. (3) In order that the dairving industry may be efficiently organised in all its phases and operations—in structibn, production, manufacturing, and local and expoffi marketing —iwe recommend the setting-up of a new Dairy Produce Control Board ■with a different constitution and wider powers than that of the present Board It is intended that the new Board shall bo so constituted and be given such powers as to enable it io deal effectively, in the interests of producers and of the State, with all the activities and nhoblems of the dairying industry.

(1) With the object of providing an •organisation competent to deal with the wider aspects of f;i rm-production and the marketing of our primary pro ducts generally, we recommend the setting-up of a co-ordinating body, which will function as a permanent executive Commission of Agrieul ure ir. advise the Government on all matters relating to production and marker ing, and co-ordinate (jinci where necess sary- control) thp. operations of the dif ren' Produce Boards. Co-ordination

of effort is necessary in matt'ers such as the jieuetfrtaion of nciw- markets, in which al], our primary industries Imve & Gonimon interest and it is equally necessary m matters such as restrictions on the. exports of bobby veal, boned beef, ami pig-ments, in which

the in I <ues’ s of I \»o or more primary industries may conflect. Shou d other t'rade negotiations fail, the Council will lie an appropriate body io as«yt in negotiating barter ao-reement* wPh other countries.

(5) We r'ecommend that a confidential investigation be made at an early date into the whole system of the marketing of Nejw Zealand duce in .’the United Kingdom, with ;• view to evolving a system that wib enable the. possibilities of that mark’., to be more fully exploited, and an mcre.nsod preferential consumptive demand buiP up for New Zealand daLvproduce. We recommend also that the possibilities of foreign markets and of diversified production be further explored.

(6) Wo recommend that the Govorninen.t of New Zealand take an eai } opportunity of conferring with the Go vernment of the United Kingdom ns to the extent to .which it is desired that the production and manufacture in the United Kingdom, of dairy-pro-duce should expand, and tluP. after a preliminary understanding has been reached, the Government of the United Kingdom should be requested to airange a conference of representatives of countries exporting dai?-y-produce in order to decide a course of action for the future. In the event of impon'.s of ‘Empire dairy-produce being

subjected by the Government of the United Kingdom to quota res motions and/or Customs duties, we recommend that ftill representations should be made irqgnrdijig S'the special claims of New Zealand for preferential ti eat men t.

(7) The foregoing paragraphs summarize our principal recommendation« We have also made recomendations regarding means for effecting- economies in the collection of cj cam sun plies for {factories, for increasing the consumption of liquid milk and cream, and for other matters. (8) In the opinion of 'the Commis sion, it is necessary that these recommendations should be regarded as interrelated and interdependent and that effects should be given to them without delay. It is recognised that, some time must necessarily elapse before a new Dairy-produce Control Board can function, but it is regarded as urgently necessary thait the suggested Council of Production and Trade should be set up at as early a date as possible in order thalt problems requiring immediate action may be effectively dealt with in the national interest. MAIN CONCLUSIONS. The following is a summary of the main conclusions:— (1) The conditions confronting the New, Zealand dairying industry have assumed the proportions of a national crisis. The gravity of the position is revealed in the present London quotations- ‘for (Nehv Zea Hind dairy produce, which are so low that farmers must expect a correspondingly lower payout for the current season than they received last season. (2) Those dairy farmers who found it difficult fo carry on during the past two .seasons with average paycut of approximately 9d per lb will find it impossible to meet Jub interest charges from a lower pay-out. The number of who can produce butterfat and meet, wages and livingexpenses and provide any interest surplus on a substantially lower pay-out is negligiule.

(3) Unless early and effective measures are taken, the result wil] be a ge'nehtl breakdown -of the financial rcla|li|ori)s OC mortgagor's and niort? gagees in the Dominion, and consequently 'it. will become difficult, probably impossible, for New Zealand t'O meet in full its overseas interest charges.

(4) The 'critical position in regaid Io prices has been brought about through the flooding of the United Kingdom market by the dumping of subsidised dairy produce from the Northern Hemisphere and Australia, and by the increase in our o.'wn supply. (5) New Zealand’s position is aggravated by the facts that no markets of importance outside the United Kingdom arc available to us at the present time, that sm-»u new markets as might be developed could not possibly be immediately profitable, and that the possibilities of darry-products arc very limited.

(6) Diversified and supplmentary production on dairy farms offers .ittic or no prospect of rclietf owng to the prevalence olf external trading restrictions and quotas. (7) The general conclusion in regard to the internal aspects of the present problem is that an early am proach must be made by the Government of New Zealand to the Government £)f the United Kingdom to arrive at a preliminary understanding and provide a basis if or lurther nego iations.

(8) The general conclusions in regard to the internal espects of the problems are that- immediate action must be taken by the Government of New Zealand to stabilise the financial p-osUion of dairy-farmers and that, as a means towards the evolution of long-ttei’m policy of reconstruction the industry must be reorganised.