SAVING TO PRODUCERS.

Hawera Star, Volume XLVIII, 13 December 1924, Page 12

SAVING TO PRODUCERS.

BUTTER AND CHEESE INSURED. THE NEW ARRANGEMENT. AUCKLAND, Dec. 8. “Yes, it does represent a further saving to the producers oi' New Zealand, ' said M.r. \Y. Goodfellow, managing director of the New Zealand Co-operative Daily Co., Ltd., when asked the exact hearing the. comprehensive insurance arrangements at uew rates had upon the shipment of daily produce. “The new rate obtained by the Control Board is 7s per cent, for butter and 8s 6cl per cent, for cheese, as against 19s 7d per cent, for butter and cheese in 1921. Since that time, however, the tariff rates of the associated insurance companies have shown a steady improvement annually. An effective comparison is as follows, the rates quoted being at and from factory via main port to London and including 30 days cover at destination :-

“For the drop year by year as conditions warranted the associated companies deserve thanks,’’ said Mr. Goodfellow, “but it is plain that the establishment of the Control Board and the centralising of the producers’ power of negotiation have permitted the companies to make internal savings and drastically reduce their rates. .In the past companies, seeking business individually from approximately GOO separate dairy concerns, have necessarily incurred comparatively" heavy office and travelling expenses, .and, in addition, have been paying agency commissions, so that probably at least half of the premiums received by them, from dairy companies have been heavily cut into. The collective arrangement now made eliminates the expense of securing business, eliminates agency costs and permits the insurance companies to work on a bedrock basis, possibly" without affect? ing their net return of profit. “Another benefit of the present arrangement is that it greatly simplifies the method of working. In the past there was frequent- concern as to whether produce was over or under] insured, because of fluctuations be-1 tween departure and arrival. The new arrangement is based on the market price of the product at the date of arrival, plus 5 per cent, on consignments and 10 per cent, on c.i.f. and f.o.b. interests. This means in practice that assessment is first made in New Zealand, but the actual premium payable is settled on arrival in London by the value of the produce at that date. If loss at sea, is incurred, a settlement is made on the basis of the value of goods as at the date when they should have reached London. This arrangement makes marine insurance quite- automatic and avoids a great deal of worry and detail work on the part of individual daily companies.’ ’ Asked whether any definite figure could be given as to the benefit bestowed upon the producers by the reduced rate, Mr. Goodfellow said that an assessment only could be made, because of the fact that certain companies had themselves in the past held policies on London at rates lower than the prevailing New Zealand rate; also some companies had, hpld insurance agencies, upon which they collected commissions. If, however, the associated tariff of 12s Id had applied throughout the whole of this season on all butter to be exported (valued at approximately £12,000,000), the sum of £74,000 would have been paid in premiums, whereas under the new rate only £43,050 will be paid. In the case of cheese, under the old rates £46,312 would have been paid on an estimated value of £6,500,000 worth of cheese, but the new rates make only £27,625 payable. The figures show a. combined saving of £49,949 as between the old and the new rates, but for the reason that a. good deal of the country’s produce had already enjoyed rates lower than the associated tariff the actual saving -to the dairy" industry will probably be onlv £25.000 to £35,000. This benefit will mostly fall noon the smaller companies, which hitherto have not been able to' enjoy as good rates as larger j companies.—Dominion correspondent.

Year. Butter. s. d. Cheese s. d. 1921 19 7 19 7 1922 . .. 17 3 17 '3 1923 13 11 16 4 1924 12 1 14 3 Control ..... 7 0 8 6