Producer Control Of Coop. Dairy Companies

Northern Advocate, 3 August 1949, Page 8

Producer Control Of Coop. Dairy Companies

WELLINGTON, Wed. (P.A.). —The Cooperative Dairy Companies Bill gave effect to the vital principle of ensuring that those who supplied dairy companies would control their affairs, said the Minister of Industries and Commerce (Mr Nordmeyer) last night, when he moved the second reading of the bill in the House of Representatives.

The measure, he said, provided that “dry” shareholders who merely drew dividends from their shares would not in future have a voice in directing the policies of cooperative dairy companies.

and broke contracts —for the betterment of the individual supplier and the industry as a whole. The tribunal had an important job to do and the whole of the success of the transfer from “dry" to “wet” shareholders would depend on it. DESERVE CREDIT Mr S. W. Smith (O—Hobson) said many “dry” shareholders invested money in the dairy industry in its early days when they had no assurance of a return on their money. They had helped to develop what was now an important part of the nation's economy, and deserved credit for their contribution. Mr Smith said, however, he was in full agreement with the bill. It would give an opportunity to all cooperative dairy companies to put their houses in order so far as shareholding was concerned, and for “dry” shareholders to have their shares purchased at a fair price. Mr P. Kearins (G —Waimarino) said the bill raised one of the most important principles so far as cooperative enterprise was concerned. His opinion was that the repercussions of the bill would have very farreaching effects in the future on cooperative enterprise, whether producer or consumer controlled. He would like to see the Minister of Finance look into the question and have the bill left open so that other companies could be embraced by its provisions. “COMPLETELY SOCIALISE” Mr Kearins said the principle of produced control contained in the bill should be extended to all consumer, as well as producer, cooperatives. The bill would completely socialise the dairy industry—with the consent of the Opposition. Opposition voice: Nonsense.

The bill was welcomed by dairy company suppliers throughout the country, and was the outcome of extensive negotiations among the interested parties.

It was because of the fundamental principle of ensuring that the affairs of cooperative dairy companies be controlled by the suppliers and not by those who obtained dividends from the companies that the committee of inquiry had made its somewhat drastic recommendations contained in the bill. FULL AGREEMENT

After reviewing the bill’s provisions, the Minister said he would move the second reading in the knowledge that the model articles were carcfuliy prepared and scrutinised by the industry, by the committee and by the Dairy Board, all of which were in full and complete agreement with the provisions, and in the knowledge that the bill was asked for by the industry itself.

Mr E. B. Corbett (O—Egmont) said 262 dairy companies would be affected by the bill, which he hoped would restore to them a full measure of producer cooperative control.

There had been in recent years a dangerous trend away from producer control, and the committee’s recommendations to reverse that trend had been necessary.

The bill would enable the companies to purge their registers of non-sup-plier shareholders. It appointed a tribunal to ensure that justice was done to those whose shares were resumed, and it provided a set of model articles. NASH “ELIMINATED” • Mr Corbett said one “dry” shareholder who would be eliminated was the Minister of Finance.

Mr Kearins said when the bill was passed the dairy industry would be the most socialised industry in New Zealand, and this was the type of socialism the Government favoured—producer control.

Companies which had been required hitherto to provide “dry” shai’eholders with a fixed tax-free dividend had had to meet heavy taxation demands to fulfil that obligation. The provision for the forfeiture of shares where shareholders could not be traced would be welcomed. The compulsory clauses were inescapable, particularly where they applied to the spring-cleaning of share registers. On behalf of the Opposition he endorsed the bill. The Minister of Agriculture (Mr lullen) said the bill was far-reaching

He hoped that in the near future, as further advances were made, the directors of the cooperative dairy companies would consider extending to the workers an opportunity to share in the management of the factories. He favoured worker control, producer control and consumer control in all major industries. Mr J. T. Watts (O—St Albans': All control.

The debate was interrupted by the adjournment.