DAIRY CONTROL BOARD.

Hawera Star, Volume XLVIII, 19 December 1924, Page 4

DAIRY CONTROL BOARD.

SAYINGS TO PRODUCERS

MR FORSYTH INTERVIEWED

. An interesting outline of the exact bearing of the new arrangement between the Dairy Produce Control Board and the Associated Insurance Companies of New Zealand was given yesterday by Mr H. D. ‘Forsyth, a membei' of the board, in the course of an ihtprview. ft was claimed that this new arrangement would niean a saving of at least £25,000 a year, principally to the smaller’companies, and would also greatly simplify the working of th© secretaries concerned. This saving, added to the reduction of £112,000 recently secured on shipping charges, showed that the producers -were progressively benefiting -by the negotiating power vested in the board.

The new rate obtained by the Control Board after protracted negotiations •is 7s per cent for butter and 8s 6d per cent for cheese, which' compares witfi a rate of 19s 7d per "cent for both butter and cheese in 1921., Since that tune, however, the tafjfi rates of the associated insurance. companies ' have .shown a steady improvement annually. An effective comparison is a 6 follows" the rates quoted being “at and from factory via main noils to London arid including 30 days’- cover at destination”

(per cent' all . steamers).— Wi 1 ’ 7d;. 1922, 17s 3d; 1923, 13s. lid; 1924, 12s Id; control, 7s. Cheese;— l^l , 19s 7d; 1922, 17s 3d : 1923, 14s 3d; control, 8s 6d. For the drop year by year as conditions warranted the associated comPuuies, _Mr Forsyth, said, ’ deserve thanks, but it is plain that the establishment of the control board and the centralising of the producers’ power of negotiation has permitted the coifiS anies to make internal savings arid i-astnally reduce their ra'tes. In the TAst the companies seeking business individually from approximately 600 separate dairy Concerns have neces* tartly incurred comparatively hea.vy 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 arrangemerit now made eliminates the expense of seeuririg business, eliminates agency costs, and permits the. insurance companies to work on a bedrock basis without possibly affecting their net return of profit: . :

Another benefit of the present arrangement, said Mr Forsvth, is that it greatly simplifies the method of working. In the past there was frequent eoricern as to whether nroduoe was over or under-insured because of fluctuations between departure and arrival. The liew arrangement is based on the market price of the produce at date of atrival, plus 5 per cent on consignments and 10 per cent on c.i.f. and f.o.b. interests. This means in practice that an aasessmexit is, first made in NewZealand, but thfe actual premium payable is settled on arrival in London by the value of the produce at that date. If loss at sea is incurred settlement is made on the basis of the value of' the 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 dairy companies. Asked whether any definite figure could be given as to the benefit bestowed. upon producers by the reduced rate, Mr Forsyth said that an assessment only could be made because - of the fact that certain. .companies had them? selves in the past held policies on Lbn-b don at' rates lower' than the prevailing New Zealand rates. Also, some., companies had held 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 the butter to be exported— approximately £12,000,000 the sum of £74,000 would have been# paid in premiums, under the new rate only- £48,050 will'be. paid. In the case of cheese,- under the old rates £46,312 would have been eaid on an estimated value of £6,soo,OOOiworth bf cheese, but the new rates make only £27.625 payable. These figures show a combined saving of £49.949 as between the old and 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 dairv'. industry I P™,¥ bl .v be o'nlv £25,000 to £35,000. This benefit will mostly fall upon the. smaller .companies who hitherto, have not been -able to enioy as goodrates as the bigger companies. “A direct saving of this nature is naturally welcomed bv the producers,” concluded Mr Forsyth, “and the important point to notice is that such economies can'he secured only by their having the ability to negotiate as on© unit. The tendency. throughout th© world to-day is towards the development of big units. In Britain and America commercial firms with mmtaal interests tend more and more to amalgamgte or combine in one way and another to secure economies and reduce costs. The. clay of the small unit is rapidly passing and the producer,upon whom the national prosperity chiefly rests, must adopt the practices of big business and cohesive action to maintain big place in the commercial world.” -V