DAIRY CONTROL

Hawera Star, Volume XLV, 28 April 1925, Page 6

DAIRY CONTROL

THE CASE AGAINST IT. ADDRESS BY MR JACOB MARX. MEETING AT MANGATOKI. A special meeting of supplying shareholders in the Mangatoki Co-op. Dairy Company was 'held in the; district hall this forenoon, to consider the question of the marketing of dairy produce, with special reference to the policy of the Control Board. Mr Jacob Marx, chairman of directors, addressed a full attendance, speaking as follows: —

We will deal with Free Marketingfirst. T will traverse the history of the meat and dairy industries as briefly as possible, together with the last four rears ’ legislation affecting same. In 1921 the meat people first moved and got legislation for the more satisfactory handling of their export meat. The Export Meat Bill gives, among other powers, absolute control in the marketing of their overseas meat, it being, however, understood, that such extreme action as absolute control in marketing would not be taken by the Meat Board except under conditions not likely to arise. The Meat Board has now operated several years very successfully without resorting to absolute control. In 1923 a similar Bill was introduced dealing with the dairy industry, and a similar, absolute control clause to that in the Meat Control Bill was included. Strong objection was taken to this clause, both in Parliament and outside (after events are proving this opposition well warranted). Both the Government and Parliament decided that, as in the Meat Bill, it was necessary to give the Board- very wide powers. The Prime Minister stated: “That ■without the compulsory clauses the Bill would be of no value; it was not to say that they should.be put into operation right away, or even at all, but the compulsory clauses must be there in case they were required to be used. The Meat Board had been successful chiefly on account of its moderation, and it depended on the new board how far the compulsory clauses should be brought into operation, if at all. If they succeeded in getting as good men on the new board as on the old, as was intended, there should be nothing to fear from the compulsory clauses in the Bill. The Chairman of the Dairy Control Board, Mr Grounds, made an official statement, as per N.Z. Times of Oct. 3, 1923, in reference to the Dairy Control Act: “As in the case of meat control, there will be no - compulsion whatever unless by more careful investigation such procedure is found to be absolutely necessary in the interests of producers.’' The Dairy Control Board shortly after its election sent a delegation of three members overseas to investigate markets and conditions in tlie Northern Hemisphere, and on their return, after.a few months’ absence, recommended the almost immediate enforcement of absolute control in marketing. Strong opposition within the council resulted in the date of enforcement being postponed to August, 1926. WHAT IS ABSOLUTE ’CONTROL?

Now that dairy producers have been notified that absolute control is to be enforced, it is about time we realised where we are and what absolute control means. The Board’s powers are absolute and practically unlimited. To quote Clause 3 of the Act: “All dairy produce of which the Board assumes absolute control shall be shipped ns the Board directs, and shall be sold and disposed of only by the Board or by the Direction of the Board at such times and in such manner and on such terms as the Board in its discretion determines. It is surely a marvellous clause, and actually hands the New Zealand dairy producers’ living, without qualification or restriction, to a small body of men, who may or may not be possessed of sound judgment or free from bias or favour. It is difficult to grasp the Board’s full powers. They may appoint 500 or 5000 assistants at what salary they ‘please, employ agents on what pay or. commission they please. Mr Grounds has already intimated that f.o.b. sales, except by the Board, are forbidden. What opportunities are offered for patronage, corruption ' and muddlement!

At the various addresses to dairyfarm ers giv.en "by Mr Grounds during the past few weeks, and on previous occasions, and which have in most instances been received with applause and votes of confidence, we have in these addresses nothing more substantial than generalities .and assurances. It is “assurance*’ first, last, and all the time. The enforcement of absolute control is pure and simple Eussian Communism and worthy of a (Lenin or Trotsky. In a word, we are to have absolutism in a democracy; absolute control in a free country. Mr Grounds has on occasions compared the cooperative dairy factory companies to absolute control in that the supplier parts with Ids produce and is dependent on others for his returns, but Absolutism and Co-operation are as wide as the Poles asunder; the one is voluntary, and the other compulsory. OTHER WORK FOR BOARD. There is and always will be important and useful work for the .Control Board outside marketing. Our shipping has long been recognised as our weakest and most unsatisfactory feature in our overseas marketing, not only as being extremely costly, but also as regards the quality of the service. In the matter of shipping, the Board have secured a small reduction in freight and somewhat improved service. We are, however, committed to a further three years’ shipping contract as from the beginning of the present year without having secured that most important factor —regular monthly deliveries. Better insurance terms "Have been made by the Board, which will result in substantial savings. The matter of exchange was brought forward at the recent Palmerston North meeting. Mr Grounds is reported to have said “that various remedies had been suggested, but the question bristled with difficulties, and he could not forsee any adequate relief forthcoming.’’ Reverting to the compulsory marketing of New Zealand export dairy produce by the Board, we are advised by the Board that sales at Home of both butter and cheese will be spread over the twelve months; no f.o.b. sales in New Zealand will be permitted. Yet we have our one important cheese competitor doing most of the cheese business by f.o.b. sales. Further, the spreading of our cheese sales will overlap Canadian deliveries, and protracted sales and storage must increase . costs, risk serious deterioration of cheese, .and lessen

the monthly advance available for suppliers. As regards butter, which is also to be spread over the year, much greater competition has to be faced. Only about one-fifth of Britain’s importations from overseas are supplied by New Zealand. Stocks of cheese, as well as butter, held in Britain will surely have a depressing effect on the Home market, and thus defeat the very object of such storage and holding. Cheese is most difficult produce to store, especially after being kept in New Zealand for a time, shipped Home, and, when in a matured state, again stored in Britain. Butter is much easier stored, but stored butter must always be at a disadvantage against the Danish fresh butter weekly deliveries. Present conditions of marketing, whatever their drawbacks, have carried us along very fairly during the past twenty-five years; progress payments have been made to suppliers at or about the 20th of each month for previous month’s milk or cream without one payment during those twentyfive years being missed. FINANCE.

Our finance under present conditions is all that one could ask for, any one of the principal Home firms being most liberal in their setting up of credits, thus making advances to suppliers in the first half of the year easy for directors if the market happens, as. it has done in different years, been below advances. Adjustments can be, and are always, made as the season advances. This will all be altered under absolute control, under which I cannot imagine we will get the same easy finance. We part with the produce under compulsion to the Control Board, and outside of the very small local consumption trade, have to look to the Control Board for every penny. Freight, exchange, and the Control Board’s current expenses will be a first .charge on advances. It lias been explained that the representatives of the Home firms can be done without under control, and thus a huge saving effected. Even this has its other side, as commission to Home firms, which includes their New Zealand agents, only gets paid after the produce is sold, while under control the huge staff required will have to be paid forthnightly as from the commencement of the season —Ist July. As I have already stated of Britain’s imports, control will have about half the overseas cheese and one-fifth the overseas butter. Another disturbing factor to'which no publicity has been given obtains, viz., a considerable amount of butter and cheese will be exempt from control owing to contracts in existence. I have not the amount, but it may amount to from 20 per cent, to 25 per cent, of our export quantity. It has been contended that absolute control is necessary to secure Pew markets. This has been clearly disproved by the Meat Control Board, who have secured good markets for meat on the Continent. SHIPPING.

Seven-eighths of our market trouble is, and has bleen, the irregular shipping arrivals in the United Kingdom. Taking the present and-past seasons shipping deliveries have been as follows: — Shipments. Crates Cheese November, 1923 .. 4 39,495 December, 1923 . . ■ "5 93,309 January, 1924 .... 2 41,315 February, 1924 March, 1914 7 96,968 At the begiwning of February, 1924, cheese rose to 150/- per'cwt.; at end of the month, after 264,775 crates’ de-' livery, it had fallen to 82/-. One- \ quarter of the New Zealand cheese made in 1923-1924 season was landed ( within four weeks. Taking the present 1924-.1925 season,] some five months:— « Cheese, j

Shipments. Crates. November, 1924 . . 4 71,544 December, 1924 ... 3 33,740 January, 1925 .... 4 89,578 February, 1925 ... 5 114,823 March, .1925 ..... 8 132,283 So we have to end of March, 1924, 535,862 crates delivered. This present season to end of March, 441,968 crates delivered, so at the end of last month 93,894 less crates were marketed than at the same date in previous season. How far this wi.ll affect the present season remains to be seen. As the output of New Zealand is almost stationary, and the total annual make is over a million crates, we still had Over, half to market at the beginning of this month. The shipping problem alone makes any improvement in marketing hopeless. / At the end of last financial year,; June 30th, 1924, there were still 136,972 crates undelivered and unmar- i keted. Of this quantity six shipments ! of 69,382 crates arrived in July, five< shipments of 30,655 crates in August, ! two shipments of 23,296 crates in Sep- ] tember, and two shipments of 13,640 ! crates in October, 1924, being the last] or the 1923-24 season. Shipment of) this season’s 1924-5 •manufacture com-j

nienced in November, 1924, as already) set out. To have regular and satisfac-1 tory deliveries of our 74,000-ton cheese ! export we should, as near as possible, j deliver 120,000 crates per month, commencing with November. j EXCHANGE. Freights and exchange are a big factor, and have both to be paid- before the liner leaves New Zealand with our produce. Exchange, which is not only charged on advances and balances, but also on freights, and together will this ■year at present rates' (2f%) approximate £4900, while freights will probably exceed £14,000, thus bringing freight and exchange to approximately £19,000. I have endeavoured to trs»-< verse the main features of the present position, and am strongly of opinion that the Control Board’s action of enforcing absolute control in marketing our dairy produce is diametrically opposed to the best interests of the New . Zealand dairy farmer, and will be a distinct breach of faith by the Board with the, Legislature, the dairy farmers who supported the passing of the measure, and the dairy farmers of New < Zealand generally. Speaking as a producer to dairy fanners, I say that the ' Board’s absolute control scheme is a dangerous wild cat adventure that will do untold harm to the industry, pile ; on extra unnecessary expense, greatly ; reduce monthly advances, result in ! much more protracted! payment of ; balances, and does not present any one < attractive factor. We are here together to discuss this, the most weighty matter we have ever had confront us and to decide what 1 action had best be taken. 1 (Proceeding)