CO-OPERATION STEP

Hauraki Plains Gazette, Volume 47, Issue 2664, 1 September 1937, Page 3

CO-OPERATION STEP

WAIKATO AMALGAMATION FARMERS’ SUPPLY SCHEME. 'By the year 1900, then, the products of the Company had a very high reputation. The following year marks an epoch in the history of the dairying industry in the South Auckland area. It was at this time, indeed, that the suggested revival of factories run on co-operative principles was to have its effect. Meetings were held in various districts to discuss matters connected with co-operation. It is probable that the revival of interest in the old methods of factory management which had proved a failure in the Waikato in former days, was due to the influx of a considerable number of Taranaki farmers, who were ardent suporters of co-opera-tive principles. As soon as opposition was shown, the proprietary firms were so perturbed that they quickly offered an increased price for butterfat. It may be definitely stated that in the past the farmers had not received as great returns from their butterfat as they had been entitled to—always granting a fair margin of profit to the proprietary firm. Moreover, the proprietary firms feared that co-opera-tion would do them considerable harm. Messrs Ambury and English now endeavoured to tie down their suppliers by a three year contract. Many suppliers, attracted by the increased prices offered, neglected the idea of co-operation. The farming community in general had not yet sufficiently developed the urge to cooperation. It needed something more forceful to draw their attention to its many disadvantages. But they lacked leadership and many of the districts were still in comparative isolation. Mr Spragg made the next step towards co-operation. We must remember that it was he who, prior to .1901, had offered his company to the suppliers whenever they were willing to turn it into a. co-operative concern. On August 24/th, 1901, he issued the prospectus of the New Zealand Dairy Association, Limited, incorporated as a co-operative company under the Companies Act, 1883, and amendments thereunder. He then began a tour of the Waikato, in the main centres of which he explained the prospectus and gathered impressions of the attitude and ideas of the farming community. Certain points caused much discussion. Particular hostility was shown to -the suggestion that nonfarming members of the community could take up shares and participate in profits up to 8 per cent, and the idea was finally dropped. Fifty delegates were present at a meeting held in the Volunteer Hall, Hamilton, on September 11, 1901. The following resolution was carried unanimously:— “That in the opinions of the delegates representing various creamery districts in the Upper Waikato, the time is distinctly opportune when the principles of co-operation should be applied to the dairying industry; that we approve of the proposals of the New Zealand Dairy Association, Limited, for the conversion of theii’ business into a co-operative company, and in the interests of all concerned would earnestly impress upon the suppliers that desirability and necessity for unity so that there shall be no severance of the Upper and Lower Waikato districts.” Shares were to be limited to farmers and their employees. Further meetings were held and further support for co-operation was obtained, especially when it became generally known that Mr Spragg had sold the season’s output for 10’ t d a pound—or :7d higher than was usual. In fact, very small creameries had paid only 7gd and others, in proportion to their size, up to 91d. In this manner, despite the fact that argument raged fiercely round the question of shareholding, the farming community of the Waikato was gradually, convinced that co-operative were worthy of their support. In the 1916 season, the manufacture of dried milk was commenced at the Matamata factory and, in the following year, at Matangi. Both of these factories were leased to Jos. Nathan, Limited, a proprietary firm which operated them, although they had been erected by the Association, the suppliers of which had taken up shares to cover the cost and had also entered into a five-year supply agree- ' ment. The shareholders received ail their paymnts for supplies from the Association. Subsidiary Activities Some time prior to 1911, the first herd-testing by the Association was carried put in an irregular manner

at the central testing stations attached to the various factories. But a herd-testing station whs established at Frankton Junction factory in September, 1911. No charges to farmers were made for this service, which was debited to the Association which saw the benefits which were to be derived from such a scheme. During the first season, 130 herds, comprising 36,000 cows were tested, whilst others could not be treated owing to lack of facilities. It was discovered that many of the farmers were not competent to carry out the sampling, whilst others had motives other than culling in having thier herds tested. Therefore a charge was now imposed, so that those not genuinely interested in herd-testing might be eliminated, and the service extended as far afield as possible. For the purpose of purchase of stock, a Loans’ Department which could grant up to £250 at 8 per cent was established by the Association in 1918. The security was by means of registered bill of sale and repayments were made by the monthly deduction of not more than one-third of the gross cream cheque. By 1919 some £45,000 had. been loaned to suppliers. The Association also established a co-operative supply scheme, whereby the farmers could obtain supplies of coal, benzine, cans 1 , oil, cement, veterinary goods, separators, molasses and manures, which were sold at cost price, plus handling charges. Few figures l are available to show the extent of the Association’s business, but from the 1908-09 to the 1911-12 seasons, the sales of commodities amounted to over £46,000. Manures were indented in the 1904-05 season and the quantities of these increased rapidly during the following years. It is to be noted that general merchandise was excluded from the Association’s operations, since the provision of these goods does not come within the true function of a co-operative dairy company, which must always keep in view the manufacture of butter, Cheese and other like products at the lowest possible cost to the supplier and the public. The New Zealand Cooperative Dairy Company abandoned the sale of general merchandise because the agency business began to overshadow the manufacturing side, and because the goodwill of the business community was being alienated. Success of the Association The success of the New Zealand Dairy Association was due largely to the influence of the first managingdirector, Mr Wesley Spragg. In fact, it is not too much to say that he was, in the opinion of many, the chief inspiration in the successful foundation of the dairying industry in the South Auckland district. Entering the industry at a time of crisis, he succeeded by recognised business ability and integrity in obtaining sufficient finance to see the company through a period depression. Among other things, he adopted the policy of concealing nothing. By explaining everything to the shareholders, he avoided that destructive enemy—dissension. His reports were models of lucidity and terseness. His frank explanations assisted rather than retarded the progress of the Association against keen competition. The Association fostered the development of the co-operative dairy system in the South Auckland district and during its 17 years of life from 1902 to 1919, its output increased from 1075 tons of butter in the first season to 5626 tons 1 of butter, 953 tons of cheese, 81 tons of casein, and 1673 tons of dried milk in the last. Originally devoted to the creamery system it was by the 1915 season the largest manufacturer of butter from home-separated cream in New Zealand. The Association was the second largest dairy manufacturing business in the world in the year 1918, and in the 1918-19 season, during which the total turnover was £1,380,856, it manufactured about one-half of the butter output of New Zealand. Of the cheese manufactured in the province, onetenth was manufactured by the Association. Again, it was the first co-operative dairy company in the South Auckland district to manufacture by-products from milk. In 1913 it commenced the manufacture of casein; in 1917 it introduced dried milk manufacture into the Waikato; hi 1915, it began the manufacture of cheese, for the manufacture of which it was the first co-operative company to plan a comprehensive scheme; in 1918 it was decided to erect a laboratory to investigate scientifically the manufacture of all products. However, amalgamation took place before the laboratory scheme could be carried out. (To be Continued).