Manawatu Evening Standard. MONDAY, MARCH 9, 1925. THE EXPORT OF DAIRY PRODUCE.

Manawatu Standard, Volume XLV, Issue 83, 9 March 1925, Page 4

Manawatu Evening Standard. MONDAY, MARCH 9, 1925. THE EXPORT OF DAIRY PRODUCE.

Serious differences of opinion have arisen in regard to tLe policy of the New Zealand Dairy Produce Control Board, which has announced its intention of taking complete control of the sales of dairy produce for export on and after the Ist August, 1926. As this will involve the prohibition of all f.o.b. sales by dairy companies, serious misgivings are entertained both in regard to the procedure contemplated and its probable effect upon the dairying industry generally. Apjdication is being made for the necessary Order-in-Council, without which the board is unable to act, and representations have been made both to the Minister of Agriculture and to individual members of the Ministry against the exercise by the board of its powers in the direction indicated. It will be remembered that a very large majority of the- daily farmers voted in favour of the Dairy Produce Export Control Act, 1923, being brought into operation ; over twenty-two thousand votes being recorded in favour of the Act becoming operative, and some nine thousand votes against the adoption of the measure. The old adage, that “second thoughts are best,” seems to apply in this case, because many of those who voted in favour of the Act are said to be fearful that the board is going too fast, and that it is exercising powers intended only to be applied under very exceptional circumstances. The Act gives the board full control over the export of dairy produce from New Zealand. Sub-section 5 of Section 13 provides that all dairy produce of which the board assumes absolute control, “shall bo shipped as the board directs, and shall be sold and disposed of only by the board, or by direction of the board, at such tijnes and in such manner and on such terms as the board, in its discretion, determines.”. That power is limited only in respect of sales of daily produce where contracts for its purchase were entered into before the commencement of the Act, or before the board had given notice of its intention to assume control of dairy produce. In the statement he issued on Saturday week, the chairman of the board, Mr W. Grounds, announced that, “after long consideration of alternative courses, and an interpretation of the legal position by their solicitor, the board decided that to attempt control by suspension of shipments would be dangerous, that the present indiscriminate and unorganised attempt by individual factories in suspending shipments and price-fixing might result in loss, and prejudice the conduct of regularised business, and that anything less than absolute control precludes the development of other markets and centres of distribution. It was therefore decided that the full operation of the Act should bo deferred until August, 1926, to give ample time for the establishment of the organisation necessary to efficiently carry the responsibilities involved.” It was of course desirable that as full notice as possible should be given to the producers, and those interested in the dairy produce business, of the board’s intention to preclude all sales except through its own organisation. The question now agitating the minds of many dairy farmers is whether the board is acting wisely or not. CAN GOVERNMENT INTERVENE? The Dairy Produce Export Control Act enables the board under sub-sec-tion 4 of Section 13 to exorcise either absolute or limited control over dairy produce for export. Sub-section 1 of Section 14 which, like the sub-section already quoted, is mandatory in its terms, provides that, “after the con-

stitution of the board, or after such later date as the board may, by public notice, appoint, no contract for the carriage by sea of any dairy produce to bo exported irom New Zealand shall be made save by the board acting as the agent of the owners of that dairy produce, or of other person having authority to export the same.” The board, consequently, has power to ship and sell all the daily, produce handled and to prohibit shipping or sale other than that which it may authorise. Whether the Government has surrendered its powers of veto over the board’s doings is an open question, because Section 12 of the Act, which seems to place in the hands of the Minister of Agriculture the power of licensing persons or firms to export produce, is capable of more than one interpretation. It says that “the Governor-General may, acting under the powers conferred on him by the Companies Act, 1913, and its amendments prohibit the export from New Zealand of any daily produce save in accordance with a license to be issued by the Minister.” But then it goes on to say that such license “is to be subject to such conditions and restrictions as may be approved by the board.” It might almost be concluded from a reading of this sub-section that the Minister is able to control the board, because he alone is empowered to issue the license to export. But then the board has alone apparently the power to lay down the conditions and to make such restrictions as it pleases where exports are concerned. It Would seem to be necessary, therefore, that there should be a clear statement by Cabinet of its opinion and intentions. The gentlemen controlling the affairs of the board have, with the exception of the two Government representatives, been elected by the producers themselves, and we may assume they have chosen the best men available for the positions occupied. The export trade has, however, been for so long in the hands of men whose knowledge and commercial training have enabled them to make very satisfactory arrangements for the shipment and sale of dairy produce on the British markets, that it seems a little risky to hand the whole business over even to a board comprised wholly of dairy farmers. However complete the organisation at the back of the board may be, the unrecognised factor against which they will have to contend consists of those who have profited by f.o.b. sales in former years, and with whose terms dairy farmers, generally speaking, have been well content. It is probably necessary to regulate both shipments and sales, but there is an obvious danger of trouble arising as the result of such regulation. Absolute control, if it is vested in any one person or set of persons, may lead to disaster, because it is quite within the bounds of possibility that mistakes may be made in marketing the produce which would involve the shippers in actual loss. When Mr Lennon, the Queensland Minister of Agriculture, took control of the dairy farmers’ produce in 1915 the export of butter was prohibited, except by the Government, and the Cooperative Dairy Associations were not allowed to transact their own business outside of Queensland. Mr Lennon actually made sales of butter in Melbourne at 220 s per cwt. f.o.b. Brisbane, although the Melbourne market price at , the time was 233 s 4d per cwt. The selling price was fixed without the least regard to the cost of production, which at that time was very high, and, in later deals, Mr Lennon made even worse Bargains for the farmers. The cases may not be altogether analogous, but it seems to us there is less danger arising from unfettered competition amongst the purchasers of dairy produce than is likely to arise where sales can be made only through the one channel. The careful consideration by the producers matter evidently is one which needs interested.