DAIRY PRODUCE CONTROL.

Hawera & Normanby Star, Volume XLII, Issue XLII, 7 October 1922, Page 6

DAIRY PRODUCE CONTROL.

V PROPOSALS IN SCHEME.

LARGEhMEETING AT NEW PLYMOUTH. A very large and representative meeting of members of dairy factories gathered in response to the invitation of Mr. Connett to discuss the question of dairy produce control and the Bill which is now before Parliament. There were nearly 150 representatives present. Mr. Connett briefly welcomed them, and then on his proposal Mr. A. Morton took the .chair. Mr. Morton introduced Mr. Grounds, of Hokianga, who has been appointed of the Control Committee which is investigating the question. He said that the principles of the Bill had been discussed, and now that the Bill had been circulated they were out to get the fullest information. He could assure them that they would find Mr. Grounds was capable, impartial, j and straightforward, and would give a clear exposition of the Bill. It was, he added, a good thing to discuss the points, and after a clear exposiflffn they would have all doubts cleared away and misconceptions abolished. There had actually been little opposition but in North Taranaki. . Mr. Grounds, after acknowledging; the kindly reception accorded him, said he did not expect to nave to come to Taranaki to speak on the merits of the Bill to his own fellow workers In the industry. It was an invidious position, and he'said he was asking only to allow the committee to undertake the, tasTe on behalf of the indus£ry^_ and he was pleading as a fellow farmer m regard to' the reasonableness of such a valuable scheme to the industry. He never allowed personalties to become mixed up with his opinions. Local members, he said, /'-knew ™the pool proposal had been at first dropped on account/ of the opposition of the South Island, whose members wanted monthly auctions, but' ia belitfrpd this was a retrograde step. At the later conference he was surprised to findthat the South Island turned down the monthly; sales, and this attitude was welcomed by the North. It was then unanimously decided that control was necessary, and a sub-committee was set up to go into a scheme on the lines of the Meat' Control Board. After interviewing the Premier and members of the district it was resbly/ed to call a meeting and propose legislation on- the lines of' the Meat Ppol. It was necessarily hasty, because if not done at once Parliament would- be dissolving, and nothing woiild be done .next - year. At the North Auckland conference delegates had been appointed to represent them at "Wellington. He acknowledged thai; the work of the cdnference had. not been without blame and the position should ;have been more clearly defined, but he appealed to air to look' Jo the greater issue, the soul; of the movement. There had been misunderstandings^ and some would not agree with the majority. It was freely agreed that the Government had the right to require representation, but they did not want control of the industry. Factories, 'iie said, should sink their individuality as would be d/me in life, realising the fuller liberties to^be secured from combination. Some members stood up for the English distributing houses, ...for.. they knew that their word was their bond, but it was strange to , see members in the industry defend Tooley Street against their own people. While it , was x said that they did not want New Zealand' /business, he could not think that if the business did not pay- they would v continue to accept it. There was no antipathy to these houses who had assisted s the industry, but it was necessary to* judge how far they were serving the positum and where 'inFprovements could be made. Only by consolidation could, the \ best be got out of the industry. Juggling with the economic position would not serve them, and fictitious metffocts in deaHng with1 the position would be foolish. Supply and demand governed the position, and intelligent organisation was the only means of reconciliation of this law. The position in Europe had been abnormal, a keen demand along with a plentiful supply, millions wanting the produce and unable to pay for it, a greater demand than had. /ever before existed. There, was a hopeless disorganisation in the markets responsible for the conditions "existing to-day, and there must be agreement between supply and demand to ensure satisfaction. It was recognised by all that improvements could be made, and this was acknowledged by prominent men in the wholesale business.' One of jthe chief contentions raised by opponents was that there, was something hidden, that -they were controlled by the big companies, and that the scheme had been cut and dried; but this was not so, was, in fact, ■hopelessly wrong. They .must "found their procedure on the experience of the Meat Board, and keep an open mind for all evidence brought.' forward until full particulars were available. He himself, . said the speaker, represented a company Consisting of hundreds of small suppliers, and they had no thought of the big companies predominating. Each must find his place and none predominate, Vising the,combined and collective brains of • the industry.; The committee of which; he was chairman were fully aware of the size of the problem, and would be able to realise success if backed by the industry. Criticism had come/ mainly from. North Taranaki, but the voting at the conference had been considerably, more than half in favour of the propTositioin, while practically every day approval <was being received from other factories. In reference to the Bill, he said he had hoped copies would have been circulated before the meeting, but one of the main features had been the setting up of. the committee, and because they had nothing to .hide they welcomed oritieism. They could not allow matters to drift, for this always caused trouble, so that the only effective way was to tale their courage in both hands and go through with the scheme. Control of export of produce is the main feature of the Bill, theGovernment having ,two representatives on the board, and^the board and their London agency conferring with the Meat Control Board in the matter of ; shipping. There would be a levy made to cover expenses. It' was wrong to suggest that the idea of some of the ' organisers had been to secure "fat j jobs," but this was no so, for they were out to give service to their fellow workers. It was only on these lines they agreed to accept nomination. Misconception, he felt sure, centred round control and compulsion. If there were power to control there must be power to direct, otherwise there could j be no effective work. They must have the final word, and unless this were so it would be impossible to handle the business. An effective intelligence department was the kernel of the whole scheme, so that they should know al-' ways" what supplies• were required in i the- market, just as did their friends in Tooley Street. They must have an j effective grm of the situation, and rot allow any factory to :aqt so that the

rest were prejudiced. This was a part of the scheme all were agreed on, and it could not be secured unless all acted as one concern. "What, he said, did, they know at present of the Eastern markets, of the development of English trade in centres other than, in London. Tliey must have complete information so as to supply wiiea the de-, mand was there, and for. this good control and a competent intelligence department were essential. It was really ; carrying co-operation only one step further in the work they had entered upon. Many obstacles, he observed, that appeared were of their own setting up, and if met with that whole- \ hearted vigour and keenness required j to do the job. would disappear. He ridiculed the idea of the promoters __ of j the scheme wanting fat jobs, which" j idea arose only from prejudice. They must get the services of men who knew all about the business, and get it so organised that it would be a good investment for the farmers.

Mr. Grounds read extracts from reports showing the same scheme mooted in Australia, and showing the need of being able to con£rol the amount to be put on the market and She time when it should be done. Consolidation, he' said, was visible in business concerns all over the world, for if this were not secured they could not carry on. In; conclusion he said he hoped sincerely they -would realise the position and carry through the scheme to a successful issue. \ In reply to a question, Mr. Grounds said the Bill did not interfere with the present grading institutions. Iri reply to Mr. Taylor, Mr. Grounds said that the question of advances to factories could be easily arranged, even if there were a hitch in negotiations with, the big firms. Any he j added, was-unthinkable, because the j produce had to go into consumption, Land they would have a finger on the pulse of the market. Prices must be arranged with selling agents in London. There had been' a suggestion of the wisdom of extending the . supply season so as to continue shipping throughout foe year. He considered that the idea of haying to counter opposition from the big houses was a 1 b°Sey> and financing the output would be one of the main v planks of the scheme, Vnd with this the board would | deal. It\was, of course, an important j factor, . but was not an insuperable i difficulty, and he was confident it could ibe done. He considered that now, when ! Colonial importations to Britain were more'than outside imports, was the jvtime to see the scheme established. 1 Later wßeri Russian and Argentine competition came in the effective j organisation would certainly be required. Mr. Taylor raised the question of the • levy, and said he considered it might be out something and getting no return. Mr. Grounds said they were already paying a considerable , levy for dealing , with an output of £15,000,000, on which a considerable ■ commission wiis paid. , Mr. Larking read a letter showing that more could be secured for New Zealand butter if they shipped to centres other than London. Mr. Gibson said that so far nothing had -been said as to financial arrange- . ments, • which at present were apparently in the air. Mr. Grounds replied '£hat the 'Act was not passed, but inquiries had been made as to the course to be taken. The committee were only working towards the establishment of a scheme of control, and no definite arrangements could,yet be made. Mr. Freeth congratulated the speaker on his obvious. sincerity, but thought it unwise that the committee should allow information* to be dragged out instead of being made readily available. This, he considered, had led to some of the opposition. They were all aware something had got to be done so that ■ they, could go on from co-operation to co-operation, but, he added," there : was the greater reason, owing to vthe immense amount invoiced, of exhaustively going ijnto the wlfole question before entrusting their huge; output to a board. He foresaw that there might be conflict between ,tne board and the big houses as to the question of when to sell. 4 ' Mr. Grounds ,in reply, said he was sorry the speaker had talked .of dragging. out information. -He had endeavoured to cover the ground as far as he was able, but must necessarily have been unable to give every'detail. . He added that he felt sure the question of control and financing of shipments could easily be arranged: .' In reply to a question as to the Parliamentary Commission, the chairman said arrangements would be made to hear all evidence Relative to the position. l ,;.:-:";/|'- ■'-.'- ' ■-.■• ■■.-.:.:.■-.■ | Mr. Davis expressed his appreciation of the excellent address given by Mr. Grounds, but added that they were no further advanced than when they con> vmenced, for they were not given a 'policy that was to be followed, and thjjjy! were* not shown, where "savings cotfld be effected. Naturally everyonefelt the need for much more -definite information; - 1 TVTr; Freeth referred to the reserve fund to be created, and asked if the , amount were to be fixed, for otherwise the- board could deduct whatever they wished, and the supplying factories , must be adequately protected. He /moved a resolution: "That, as a copy of the Bill has been posted to1 every factory, sufficient time should be allow;ed for full consideration before any- ! thing definite be done." , J I Mr. Gibson seconded, the resolution, j ..'. Mr. Harding said that the board were not proposing Anything than a control which 'already existed in other ways, and were aiming at regulating the supply to the markets. He coni sidered that the farmers were not getting nearly enough for all their hard and long hours of work, and considered there would be no difficulty in effectively working the scheme so as to get I more out of their produce. i Mr. 'Gibson referred to the need for j extreme caution in such' a project as wasi before the meeting *in case they should be met by a Bill in the Old '■ Oountry' to control imports. He reI ferred to other attempts ,to control; : prices, which, he said, had been very' j costly, and to the fact that other couni tries could get their produce on to.the i market much more quickly. He con- . sidered they were being asked to ex-.: periment with the whole question of supply, and had got to pay and obey and be liable for the mistakes that would be inseparable from going into a scheme in competition with men of the best brains and with lifelong experience irenind them. Mr. Maxwell referred to the diffi-' culties to be met with in dealing with' such big interests involved. He considered that the board would be quite unable to stabilise the market as.they suggested. They had been told that j the farmers were not getting all they! should owing to the presence of. the' i big trading and now he was told there was nothing to Tear in this respect. He came. to learn why the scheme was being .promoted. If the farmers' welfare were menaced, then the Government should step in. If, as in the case of the meat business, there had been a menace to their very existence, then it would have been just and right to attempt su?h a scheme. In -any case, he added, the success of me^b control had not yet been proved. Ha €5

considered there was no right to dictate to any factory that did not agree with the scheme. The experience of the dairy factories had proved to them that the. .English merchant houses were the most honourable in. the world, and that factories had received all that the market warranted, and actually v«±ry close to the retail price of the produce m the Old Country. There had been great fluctuations in the price, but reasons for this could be given, namely x the war time control.and the drought in W England and the dumping of the con- L trolled butter. The Danish market was not controlled. They had a committed securing and giving the best information, and assessing prices, but they had an absolutely free hand, and cleared out the stocks when the market was swamped. Records showed that our price,was very close to Danish, and in some cases exceeded it. Tnis speaks very highly for the quality of New Zealand produce, when it was consideredthat the Danes were so much closer and supplied a saltless butter. There was not one single word of evidence giving reasons for a change. In regard to finance Mr. Grounds "was right in saying that a complete scheme would be impossible until they wei% in operation. There had been nothing concrete put before the companies, and the whole scheme was m the clouds. The only suggestion was based on absolutely false grounds. The promoters were asking them to give control of millions.of pounds worth of produce which stabilised the Dominionfinances to nine men. It was a most raw scheme, and would disorganisethe scheme on which dairy finance was. built. Under the present scheme the banks were endorsed by the English houses ,and about February advances totalling about three millions would be made. TTo arrangements had been made& " to niee;t this position, but* they were asked to give control to nine untried rrieh, indeed to some who had been found wanting. Under the control, they might not get these advances, because the firms would not know the price they had to pay until the 'produce got to the Old Country. To handle the amiount now-given to many hrms would require a mint of money. The scheme originated from a certain clique, the same clique who promoted certain other schemes. The producers were not satisfied with the KD.A. Infact, he said :n conclusion, the scheme nad notjjeen ' - properly laid before the - industry. V- 7hen suppliers and companies were sure of every detail they would have a chance "for consideration^ and he was £ suie this was necessary before any- '"' thing should be done. Then if they - V; thought well of it let the scheme go forward. Mr. Larking said that criticism., had been merely destructive. He would suggest to help matters that produce should be sent to different English ports and educate by propaganda the English consumer to take 77ew Zealand butter. Mr. Connett moved as' an amendment : "That, with a view to reducing the charges on dairy produce at present existing between the producer and consumer,! and thereby assuring a better net .return to the farmer, this 'meeting of dairy factory representatives in - v North Taranaki expresses its approval of the broad principle of the Dairy Control Bill as outlined by Mr. Grounds." SpeaKing to this motion, he said that it "' was known a good deal was lost to the producer. With" cheese at 8d it meant a gross pay-out of about Is 9d, but 9d .went in expenses between production and consumption in England. With butter the loss was a little less, but it meant millions^ to the industry. At times such' as these all had to think seriously to get a scheme that would obviate this loss and bring a better return. It had been considered for.years, siid whereas no scheme was perfect at first, they ought to make a start to improve matters, and gradually go forward. The farmer must remember that he. is controlled .now by factory rules and regulations. L.-All that was asked / was to deal with produce by farmers' representatives. They must save the leakage going on and eliminate specu- , lation. The Bill was one step forward !to a scheme which will bring them the . • ; best results. * . V' j Mr. Green said that if the compulsory - -^- . clause were excised theije would be no— opposition. ■ Mr. Gray seconded, the amendment. <* ! In reply to a question, Mr.xConnett , said that probably 4d would represent . the f.o.b. charges. , Mr. Marx said he estimated hfe company had lost '£10,000 on 9500 boxes, allowing that IDs per cwt. was the j difference that should be between New Zealand and Danish, because the latter was so much closer to the .English market: If marketed right he considerjed this would have been saved. s£r. Wyatt said he assumed that Tooley Street would still charge 2£ per cent commission, and they would therefore payjthis in addition to the cost of the scheme. Mr. Grounds replied that" commission would not, be so -high. The relative , prices of Danish^nd New Zealand kept fairly even, there being from 4s to 8s in favour of Danish. The fluctuations emphasised tne need for an improved scheme. ' , • Mr. Marx said that Denmark must always get more because of their proximity to the market, but the difference had been up to 50s at times; The committee were out to get the best for the industry, and Tooley Street would be glad to work in conjunction. There were as good men in Tooley Street as any in the world. Mr. Connett, in reply to a question, said that firms oiFering unduly high prices were speculators. ' " • Mr. Ranford said he considered there was a general feeling in favour of the fv principles of tie Bill. He thought the V' committee sh«Md be provisional only. Mr. Brown congratulated the committee on bringing down the scheme. The industry had long talked about some improvement j but had done nothing. 'The companies got advances because the big firms were behind their opeiations, but last year the banks refused even to Tooley Street to make such /large advances. He suggested they would never get anywhere without compulsion, and added that the scheme should be postponed until tn^ could get six of the big merchants from Tooley Street to come out and have a round table conference, with a view to .. making improvements. The .amendment was^then put and ' lost. -, ' * A fuftiher amendment, proposed by Mr. Greent, that the scheme be postponed until after the general election was also lost. The motion was then put and carried. Votes of thanks to the chairman Mr. Grounds for his interesting <Snd instructive atTcTress terminated a good meeting. In connection with the dairy pool scheme, Mr. Hawken, M.P., has telegraphed to Mr. Morton that copies of " the Bill Have been sent i'o every dairy factory^ in the Dominion, and that arrangements are being made for evidence to be heard before the commission of inquiry, and these arrangements would be made public in the Taranaki papers.