Marketing Costs

Manawatu Times, Volume 62, Issue 67, 20 March 1937, Page 9

Marketing Costs

COMPANY SECRETARY REPLIES TO MINISTER. SAVINGS TO INDUSTRY DENIED. HAMILTON, March 15. The statements made on Friday evening by the Minister of Agriculture, the Hon. W. Lee Martin, that there would be considerable savings in costs accruing from the introduction of organised marketing, was described as ridiculous by Mr. J. L. Faulkner, secretary of the Morrinsville Dairy Comjiany, in an interview yesterday. ’•Thp Minister refers to certain ; clulin£ that were made by this company in regard to inCreasbijl. manufacturing costs of butter under existing ' conditions and ho admits that these figures aro possibly going to bo quite correct when the figures of the present manufacturing season are arrived at," Mi. Faulkner said. “Ho would, however, indicate that this company, along with other concerns, is going to make certain cash savings or receive certain credits which will moro than offset the increased manufacturing costs." Misleading to Farmers. This statement was in line with similar claims advanced by Mr. J. G. Barclay, M.P., at AVnangarei, and by Mr. A. F. Moncur, M.l\, at Walton, that tho Government would save the farmers £125,000 in bank interest on advances, £47,000 in the levy made by the Dairy Control Board, and £97,000 in the reduction of commission to Tooley Street merchants. The statement of the Minister would lead many farmers to believe that, in addition to the guaranteed price or commandeer price of 12 9-16 d for butter, f.0.b., and of 6 13-10 d for cheese, f.0.b., factories would receive something additional by way of the savings indicated. “The real position is that the Government is the purchaser of dairy produce and pays for it in full when it is placed on board an ocean-going steamer," Mr. Faulkner said. “While it continues tc employ London merchants to sell tho produce, it now pays them 2 per cent, commission instead of 2J per cent, paid previously by tho factories. Through this there may be a saving of £97,090, but it accrues to the Government, and not to the individual factories, unless tho Government has decided to pay a bonus of these and other savings upon this season’s purchases. Ridiculous Claim. "In other words, if the Tooley Street merchants were selling New Zealand produce on behalf of the Government for no commission at all it would make no difference to the pay-outs which it would be possible for tho factories to make unless f.o.b. prices which were being paid by the Government were increased at tho end of the season. From this it would be seen how ridiculous it was for the Minister to endeavour to claim that the Morrinsville company would make a saving, as he called it, of £12,412 10s for the current season unless, of course, it was Mr. Leo Martin’s intention to recommend to the Cabinet that the savings that the Government found it was making should bo distributed to the industry. “It is almost certain that the statement made by Mr. Lee Martin will be fully discussed at tho coming conference of the Dairy Board, when he will have the opportunity of justifying the claims that he has made," Mr. Faulkner added.