Zoning of Suppliers

Manawatu Times, Volume 62, Issue 121, 24 May 1937, Page 3

Zoning of Suppliers

PROTEST FROM ARAHURI COMPANY A protest against the proposed method of zoning in the Manawatu district was registered at a meeting of suppliers of the Araliuri Dairy Company, held in Palmerston North on Saturday. The reason for the protest as set out in tho resolution was that a large number of suppliers would be debarred from supplying the factory they had helped to build up. It was also contended that the estimated decimal saving in cost to the factory by the zoning would not compensate the suppliers for what they would lose by the change over. The meeting was called by the Fitzherbert suppliers of the company and Mr. J. A. Russell was elected to take tho chair. The directors were present by invitation. Mr. Russell stated that the legislation brought down to improve tho farmer's, lot had been helpful in many cases but as far as zoning was concerned the policy had been framed to cover the whole of tho Dominion without regard to what he called the “spread” of tho land. Hero in the Manawatu was a compact area and tho district therefore could not be compared with Waikato, Bay of Plenty and North Auckland. In Manawatu costs were lower than in any other part of New Zealand and the grading of butter was second to none. There were factories here grading 95$ so how could anyone say the quality of butter could be improvedf Cream collecting costs were a little over Id per lb. Now the Commission was turning round and telling suppliers they must go to other factories than the one they had helped to build up. It was unsound and unreasonable. Mr. Russell, referring to tho endeavour to make all suppliers shareholders, said thero was not a dairy company in the Manawatu to-day in need of extra capital. The taking up of shares would not make a farmer more co-operative-minded. To make a farmer supply a factory the Commission alone thought he should supply, was taking away the British independence all thought so much of. Mr. N. Campbell explained that the zoning suggestion came from the West Coast Dairy Companies’ Association to the Commission following upon a realisation that cheese factories were losing their suppliers to butter companies. The meeting should not overlook the fact that the Commission had power to zone and if company directors did not do something the Commission would and the factories would have to take just what was given them. Mr. E. O. Bond thought that if a bold enough front were put up there would be no attempt by the Commission to zone. He strongly disapproved of any interference by an outside body as to what was best for their company. What savings in cost there would be would be infinitesimal. The efforts to zone would not be worth all the disturbance that would be created. There were a few ragged edges with every factory’s boundaries and they would be quite easy to adjust by the factories themselves. Minor adjustments could be mad' 1 without tho presence of a big upheaval that would be in existence if they had to knuckle down to one big block of suppliers being transferred to another factory. If ono traced the idea to its logical conclusion the people of Rongotea should have no right to send their stock to tho Feilding sale but should bo made to sell it in the Rongotea yards. .Similarly, one would have no right to buy in Auckland anything that could be purchased in Palmerston North. Mr. Bond felt that the meeting would be well within its rights to lodge a protest and he moved accordingly. Mr. Laurenson seconded. Mr. P. Hansen recalled that 13 suppliers at Fitzherbcrt had joined up with Awahuri and thoy had never regretted the move. Those suppliers paid for the cartage of their cream themselves. Mr. Montgomery said ho was also behind any move to hold what supply the company had at the present time. Mr. Lyons thought zoning unfair from the tonnage basis. Those companies which had been tho worst offenders at pirating were to come out best. One company’s costs were going to bo cut iu half. In other districts where the Commission was operating there had been a proprietary company in tho area and the whole zoning schemo lay around the purchase of that company. In the Manawatu the companies were on a different footing. Costs were lower than the average cost for the whole of New Zealand. Tho Commission had suggested tho purchase of ono company that jwas said to be not truly co-operative, leaving the other four companies in the field, and he thought that was the true solution of tho matter. Unfortunately it was not being gone on with. As far as the Awahuri company was concerned the proposed changes would mean the loss of 44 per cent, of tho supply. That was very disturbing especially as Awahuri had been built up to practically tho highest grading factory in New Zealand.

Mr. J. Hodgens, M.P., who was prosent by invitation, said ho had first been brought into contact with the zoning proposals by a certain factory which the Commission had recommended should bo closed down. However, the report contained an alternative idea, namely, the rearrangement of boundaries. The Commission saw the savings that could be effected iu collection costs, the reduction in overhead and

manufacturing costs, improvement in quality brought about by quicker transport, the removal of obstacles preventing a company working on a truly cooperative basis, and the saving of wear and tear ou country roads. Anyone who gave serious thought to the matter was concerned at cream lorries chasing each other up and down the roads. Cream was hauled long distances, whereas it should be taken to the nearest factory. At the same time he appreciated that were he a supplier to a factory • over a number of years ho would be resentful at anyone saying ho would have to go to another factory. But what was

the Government to do when an association representing the companies asked for a survey? No one had yet said that the Commission did not know its job. However, if there was a counter suggestion that would get over the difficulty, he was prepared to help. But he would like someone to tell him that it was impossible to make improvements in the collection of cream. Even Mr. Bond had admitted that the ragged edges could be eliminated. One did not want to see a portion of the costs going as benzine money to the U.S.A. or Russia. Mr. Russell pointed out to Mr. Hodgens that there were only two lorries operating between Linton and Aokautero and two lorries would be needed in any case. Even out Bulls way there were only two lorries on the road. Mr. Lyons: Three touch in places. Mr. C. L. Hunter, M.P., said that at one time it was realised that in this area there was something wrong, hence the request to the Commission. The ragged edges should be cut off for a more economical system. He believed he could zone the area to meet the requirements of the factories. A supplier: Optimist.

Mr. Hunter: I am not going to try because it is a big job but I believe I could. He added that the map had only been drawu up as a basis to work on. He believed the biggest difficulty to get over would be tho shareholding of suppliers. However, he, too, would feel some resentment at being told to supply another factory. The Government could not be blamed because it had only done what it had been asked to do. If he could be of assistance he would be pleased to help. Mr. Bond did not think it right to ask one factory to take over from another liabilities a supplier may have incurred while a supplier to tho first factory. Mr. Hansen explained that when the Awahuri company was first started tho suppliers were not iu a position to take up shares in many cases so tradespeople had assisted. That was one reason why Awaliuri had such a large percentage of dry shareholders. Another was that many of the first suppliers with shares had now retired but their farms were still supplying tho factory so that the position was not as bad as it looked on paper. Mr. Campbell was afraid that if the company held out for individuality the Commission would draw lines and telJ each company where its'area was. Mr. Laurensen said suppliers of Whitmore road would take it hard if forced to another company. Answering Mr. Burnett, the chairman said zoning would have very little effect on the cost of cartage. Mr. Lankshire also urged a united front. Fitzherbert suppliers were unanimous that the Awahuri company was giving every satisfaction and wide dissent would be caused by any attempt to move them to another factory. Mr. Haslock stated that if a certain company were out of existence there would have been no need for the present meeting. That company drew its supply by overlapping and he would like to see carried into effect, the Commission's recommendation to get rid of that company. Mr. W. S. Carter wondered if it would bo of any use to set up a committee to soe if the company referred to could be bought out. It had outlived its usefulness. Mr. Bond's motion of protest W'us then put to the meeting and carried. Mr. Hodgens pointed out that the Commission had dropped one recommendation to try and carry out the other. What he would like to know was why the first recommendation had been turned down. Mr. Hodgens also stated that tho issue was a serious one and should be considered from all angles.