ECONOMIC SURVEY

Manawatu Standard, Volume LV, Issue 196, 18 July 1935, Page 7

ECONOMIC SURVEY

FOR MANAWATU DISTRICT. DAIRY COMPANIES’ REQUEST. ELMINATION OF OVERLAPPING. The important decision to request the Executive Commission of Agriculture and the Dairy Board to make an economic survey in this territory with a view to eliminating overlapping and any other disabilities under which the dairy industry laboured, as well as paying special attention in such an investigation to cheese factories and casein, was made at a meeting of factory representatives held in Palmerston North to-day by the Manawatu and West Coast Dairy Association. A resolution on these lines was carried unanimously.. The meeting was convened, in consequence of proposals put forward by Mr C, G. C. Dermer (Cheltenham) at a meeting a month ago, when they were held over for submission to dairy company directorates in order that the latter could indication acceptance or rejection. These were as follow: “That in the opinion of this meeting it is desirable to eliminate overlapping of daii/y factories within the Manawatu and West Coast Dairy Companies’ Association. ’’ “With this !in view, the New Zealand Dairy Bfiard be asked to make investigations in this territory for the purpose of arranging amalgamation of butter-makjing companies which we consider is fife best means of overcoming the overlapping problem consideration, to be given to the following aspjXie:—(a) Cost of manufacture iron* farm gates to f.o.b. ocean steamer; (b) overlapping of lorries in the collection of cream; (c) location of butter factories with regard to quality, supply, drainage, water, transport and other manufacturing facilities; (d) the manufacture of .casein. “For this purpose it is essential that all the assets and liabilities of each company be valued and that the full value of its surplus assets be allowed to each company in the amalgamation.” . s , Mr S. A. Broadbelt (Levin), who presided, expressed gratification at the attendance, representatives being present from the Kairanga, Apiti, Levin, New Zealand Dairy Union, Oroua Downs, Shannon, Tiakitahuna, Cheltenham, Awahuri, Ashhurst, Whakarongo, Newbury, Eongotea, Otaki and Tui (Glen Oroua) factories. The chairman stated that the question of overlapping had been referred back to dairy factories to accept or reject the proposals brought forward by Mr Dermer at the last meeting. OTHER PROPOSALS. Commenting that his company had given due consideration to the matter, Mr J. A. Nash, M.P., chairman of directors of the New Zealand Dairy Union, stated it was time for all “to put all their cards on the table.’ Ho advanced the following proposals: (1) That the question of overlapping in the collection of cream should be settled by an independent tribunal. (2) That when action is taken by the Dairy Produce Board it shall be absolutely national. > (3) That all companies shall submit to tho tribunal a plan showing their operations from every point, with suppliers’ names and the number of cows. (4) That such plan shall be certified to and signed by the secretary of each company and available for inspection bv any other company. (5) That a general plan of the territory be also submitted, showing the position and location of each butter land cheese factory. (6) That companies having a largo output be prepared to reduce the amount with a view to equalising other companies. (7) That, as far as butter companies are concerned,. no amalgamation be made, as it is considered that the out'-, put of each company is sufficient to 'justify its carrying on. (8) That each dairy factory be inspected and particular attention be given as to site, cost of transport, water, drainage, plant, etc. (9) That if, after any decision is arrived at by the tribunal, any supplier desires to supply a particular factory and can make his own arrangements, he bo permitted to do so t providing lie complies with the existing regulations. . . (10) That representatives of eacli factory (butter and cheese) shall be entitled to meet the Dairy Control Board if they desire by way of deputation to discuss the operations, but not before they have been ill existence for one season at least. There were, stated Mr Nash, some important proposals, particularly in regard to the equalisation of factory supply. Butter companies, with perhaps one exception, could carry on without amalgamation. Moving tho clauses as resolutions, Mr Nash expressed the opinion that they were of interest to all the companies concerned. . It was agreed that these suggestions should be accepted as amendments to the proposals made by Mr Dermer previously and held over. “I am not advocating any particular system, but am asking for an investigation indicating certain lines, said Mr Dermer, who suggested that overtures might be made to the Executive Commission of Agriculture for an inquiry with a view to stabilising conditions for factory supply in this district. There must, he said, be a large annual loss due to overlapping and to the location of factories inconveniently situated. UNNECESSARY ACTS. Proceeding, Mr Dermer said the industry, as a whole, owing to invasion by some factories of others’ sup : ply areas, was carrying the burden of far more transport costs than was necessary. He cited a report made five years ago on these lines by Mr D. 0. Williams, lecturer ill economics at Massey College. Had anything been done since ? Mr Gloyn (Rongotea): Yes, the position is worse. Mr Dermer intimated that an investigation was being made by officials of the Dairy Board in the Waikato district at the request of seven factories. The Manawatu area had set an example in the past in co-operative principles, and should maintain that prestige. Heavy losses were known to exist through. overlapping m cream collection. Mr Dermer quoted the comments made on the subject in the Dairy Commission’s report. An indication of the extent of the losses would soon swing public opinion against parochialism and in favour of voluntary amalgamation where that was desirable. . The motion brought forward by the speaker was seconded by Mr McNae (Apiti). “AMALGAMATION NOT REQUIRED.” FT is objection to Mr Dernier’s resolution. said Mr G. H. Stiles, was that he did iiot consider time lor

voluntary amalgamation had arrived untu they had eliminated overlapping, which must be settled by an indepenr*bunal. It was his opinion that there was no necessity for amalgamation with all its attendant difficulties! He did not agree with waiting for national action until a sectional movement had been established. He considered the New Zealand Dairy Union proposals best met requirements. Directors of the Kairanga Dairy Company were quite in favour of an economic survey being made in this direction witli regard to overlapping, intimated .Mr J. Devine.

Mr Scott (Glen Oroua) <■ stated that the best method of arriving at stability was to secure an independent examination of butter and cheese supply in this district. “We are asking for something definite to be done and to be done at once,” stated Mr Nash, on behalf of tlie Dairy Union. Mutual agreement was sought among dairy factories in this district, stated the chairman, but it was a question of procedure. He thought they should ask the Dairy Board to appoint an independent tribunal to report on all phases of the situation. He agreed that it should be a national project, but the movement to check wasted road mileage must be started. “If we leave this to the dairy companies themselves it will never be settled,” said Mr Scott. Mr H. V. Caverhill (Rongotea) said that, while his directors did not feel disposed towards any amalgamation movement, they would welcome an independent inquiry into the overlapping problem. Mr P. Hansen (Awahuri) stated that liis company was opposed to amalgamation, as he considered the ramifications of a company could be too large. A seasonal limit of 1000 tons was quite sufficient. AN ECONOMIC SURVEY. Mr Dermer amended his proposals by moving that the Executive Commission and the Dairy Board be asked to make an economic survey in this territory with a view to eliminating overlapping and other disabilities under which the industry is labouring. Mr Nash: 1 can see a “nigger in the woodpile” there. That will jiermit the question of amalgamation, to which we are opposed, to be brought in. Mr J. A. Russell (Awahuri) said they were making a great deal of noise about overlapping, but he questioned the economics or collecting supplies close to the factory as compared with supplies from a distance. Mr F. C. Raikes (Oroua Downs) said that cream collecting factories with long runs should be made to pay for the damage to the roads. Legislation forcing them to meet that expense would soon reflect uneconomic running in a company’s pay-out. The Rongotea Company, said Mr Caverhill, desired to see overlapping eliminated. There were five dairy companies operating in what he termed was his company’s exclusive area. His company desired to see the cheese companies retained in order to maintain the balance of the industry. Even if a survey should show; that amalgamation was desirable, said Mr Scott, they should accept it with a .broad view, and act in the best interests of the industry. “I think that if we can secure a tribunal to zone the territory, all the associated economic problems will be settled,” said Mr Stiles. POSITION OF CHEESE FACTORIES It was pointed out that an opportunity must be given to consider the position of cheese factories. Mr Nash desired to know what Mr Dermer meant in his resolution of the term “other disabilities.” He moved his own proposals as an amendment to Mr Dernier’s motion, stating that they were specific and clear. They were a straight-out request for action. Surely there was sufficient confidence in any decision made by an independent tribunal after it had taken evidence. Mr S. E. Algar (laikorea) seconded the amendment. The discussion which had developed, said Mr Dermer, proved the need for a change in tho situation. Why were Mr Stiles and Mr Nash afraid of it? ho asked. Mr Stiles: I am not afraid of it. Mr Nash: We are asking for it. “T desire a thorough investigation so that we can have full information,” said Mr Dermer. He could see no possible objection to the survey and the concrete .evidence it would yield. Mr Nash said that if Mr Dermer would confine his motion to overlapping, he would withdraw his own amendment. “We want some capable authority to take over the matter and jmt the recommendations into effect, } said Mr Scott. “If the subject is referred back to the factories it will never be settled.” . , ~ “Unless something is done soon the small cheese factories . will have to close,” observed Mr M. Hansen (Newbury), in referring to losses of supply through home separation. . After a farther discussion Mr Nash withdrew his amendment. Mr Algar moved an amendment that Mr Dermer’s motion embody a request to pay special attention to cheese factories and casein in such an investigation. _ , Amended on these lilies, Mr Dermer s motion was then carried unanimously, the chairman commenting that it was something of which to be proud.