“IN NAME ONLY”

Hawera Star, Volume L, 26 March 1931, Page 7

“IN NAME ONLY”

FARMERS’ COOPERATION MANAWATU SEEKS WAY OUT EL IMIN ATL N u CUM LET ITIO N AND OVEIILAPPINCE

The incorporated federation or amalgamation of dairy company interests in the Manawatu and West Coast district to bring about a full basis of co-operation in the industry in the southern part of the North Island was one of the important proposals brought forward at a meeting of the Manawatu and West Coast Dairy Association held at Palmerston North on Monday. Pull consideration of the matter was deferred pending an effort to bring all the delegates together at a big meeting.

A .special committee set up some time ago to go into the question of the overlapping of cream lorries made the following report: “The members of the committee, after considering the whole question, are of the opinion that a comprehensive amalgamation of factory interests is ) the only solution to the evils of overlapping, both in respect to cream lorries and dairy factories, but owing to the comprehensive nature of the scheme at the outset, the committee considers the time is inopportune for ' such a step, and therefore it is the jopinion of the committee that a less Comprehensive step should he taken. I The committee recommends the setting l up of an incorporated' federation or / minor amalgamation.’’ j Mr. D. O. Williams, economist at Massey College, submitted a lengthy I report through the committee which the association had set up to inquire into (a) overlapping of cream lorries and (b) amalgamation. Addressing the meeting on the featlures of the report, the chairman (Mr. S. A. .Broadbelt) referred to the re- \ volution in transport and the growth jof home separation, two outstanding I developments in the industry. The 1 I present location of factories had been necessary, lie .said, during the period of bad roads anti horse transport, but conditions had changed, and the advent of the motor lorry had created intense and uneconomic competition for supplies. The differences in the payouts for hutter-fat had helped to increase overlapping and had made directors’ positions unpleasant at times.

ALTERNATIVE'S OPEN

Tiio alternatives open to the dairy industry "in dealing with the situation, said Mr. Broadbelt, were to leave things as they were, to strengthen the present association by incorporated federation, or to amalgamate either on comprehensive or partial lines.

“Leaving things as they are at presont cannot be considered,” said Mr. Broadbelt. “We have to do something although the association has already done good work. A strengthened organisation, with more power, could deal with over-lapping more effectively. It could arrange a better local market and joint purchases by companies. We are] co-operative in name hut not in principle. A minor amalgamation would pavo the way for a comprehensive scheme in the future. It is a very ambitions scheme, and a large scale undertaking, but it could be done. ‘‘lt would prevent. further duplication by factories, the overlapping of cream collection, determine the locality of factories, and give a uniform payment. Success would depend upon an efficient board of directors and a capable manager. Partial amalgamation as a first step could be easily carried out, and would probably lead to the most satisfactory results. ; “An incorporated federation would not be weak. It could consolidate the dairy industry at this end, co-oper-atively and arrange fo sales on 'local markets. All the factories in the Wellington district should pull in and stand shouder to shoulder for their salvation.”

AMALGAMATION SCHEME

''Strengthening, the present federation would in practice mean, incorporation,” said Mr. Williams in his report. “An unincorporated federation can perform valuable work provided it can rely on the 'loyalty of the member factories. In some instances such reliance has not been misplaced; in others it has been justified only so Jong as no economic strain lias been placed on the organisation. Unincorporated federations are, I think, to be looked on as preparatory, not final, organisations. They establish the principle of wider cooperation, but by their nature are inherently weak as permanent institutions capable of grappling with longtime problems. Their proper function is to prepare the way for a more stable unci more powerful organisation which can bind the various units into a definite system. This can be achieved if the federation is incorporated and vested with appropriate powers. “The alternative of a comprehensive amalgamation to cover the whole district is the most ambitious proposal that has been put forward. The first question is: Is such a large-scale undertaking desirable at present? Theoroticaly, amalgamation of this sort would be the most direct approach to the solution of such problems ns-dupli-cation, economic location, overlapping, etc. The problem of marketing, too, to the extent that marketing can be dealt with, on a district basis, could be more effectively handled by an amalgamated industry. Once established, the amalgamations could proceed to plan the reorganisation of the industry with a. view to eliminating the uneconomic plants and reducing the wastes of overlapping. These econo- j mies are undoubtedly desirable, anil,! therefore, if' a comprehensive amalgamation can secure them, the amalgamation is desirable.” ,

The report urged tlic promotion either of a series, of minor amalgamations or an incorporated federation. Mr. Williams was accorded a hearty vote of thanks for his report, which was unanimously adopted. With the object of securing a full attendance of delegates, the meeting was adjourned until after Easter.