The Crisis in Dairy Industry

Northland Age, Volume 4, Issue 5, 2 November 1934, Page 4

The Crisis in Dairy Industry

cised by the Council, not only in industries dealt with by the Produce Board, but “in such other industries as the Governor-General-in-Council may place under its control.” It is evident then that full provision has been made in the Report and its recommendations for the bringing under Governmental control of any industry whatsoever exercised in New Zealand by Order-in-Council. Capital Expenditure Presumably the Commission’s Report is intended to assist the dairying industry. In the present hard-up state of the industry a paragraph giving the recovery of capital expenditure indicates a burden upon the industry which it will find very difficult indeed to meet. Firstly there is the provision of £500,000 to improve factories. Next farmers are to be helped to go into debt to the amount of £1,500,000, of which the Commission optimistically expects to recover £1,300,000. Then £25,000 are to be found for research laboratories as an initial expenditure by the State, but are to involve an annual expenditure thereafter by the industry of £25,000. Lastly, t.b. eradication is given as £1,000,000. But there is a good deal which the Report does not state. The factories will not only find £500,000, but the interest on whatever portion of that money they have to borrow, until such time as the capital is repaid. From experience this is likely to be much more than the original sum. The same applies to the £1,500,000 which farmers are to be compelled to expend. Borrowing the money means levying the farmers’ income for repayment of more than the capital. Then t.b. eradication provides what the Commission considers generous compensation for the slaughter of an anticipated 180,000 adult dairy cattle in the sum of £700,000. This is less than £4 a head and it can be taken that the industry will be standing a loss of about £3 a head as well ; considerably more if the wasted production of the cows which could not be replaced since the stock are not in the country, be taken into consideration.

Recurring Expenditure A paragraph of the Report affects to give the recurring expenditure, and summarises the total annual charges as follows : Farm dairy and dairy factory instruction £81,700 T.B. control (after three years), say £150,000 Dairy Research Institute £25,000 Additional advertising and trade development .... £50,000 £306,700 This sum, however, is by no means complete. The cost of t.b. control as is shown is merely the cost of 150 men who are to be kept on out of the 160 who do the preliminary slaughtering. There is to be added the annual loss of the additional animals destroyed under the operations of the 150 men left, and there

is no provision made for a continuance of heavy Government compensation, so that this loss also will fall on the industry.

It would be idle to pretend that the total annual charge of £288,700 of these annual charges, which a paragraph states would have to be carried by the farmers through the Dairy Produce Control Board, would be thi total increase in charges to farmers. Take the cost of the Board itself, provided at present by a levy of Id. per lb. butter, which also covers advertising and many other items. This would be useless as a comparison with the cost of the new Board, the multifarious duties of which, amounting to the wholesale control of the butter industry of New Zealand and much more, would require a Department much larger than the present Department of Agriculture, as merely reading a list of the Board’s duties will evidence. It is suggested in the Report that certain payments attaching at present to the local sale of butter and forming part of the goodwill of various dairy companies can be diverted to the use of the Produce Control Board. Whether this be fair may be questionable, but it is not questionable that the money will come out of the pockets of the dairy farmers just as much as if it were taken therefrom by levy. Licensing Dairymen A paragraph of the Report recommends that dairy farmers be licensed to supply dairy factories. This is said to be in the interests of the production of clean milk, but it appears to be rendered necessary as the paragraph indicates, by the regimentation of farming. Naturally farmers would have something to say to the proposed farm dairy instructors put in the position of ordering them to do whatever they, the instructors, might think necessary. The licensing being in the hands of those instructors, would be the weapon to enforce compliance, whether the order were to replace a separator or plough up a paddock.

The wide powers proposed to be given to dairy instructors are the

most important abjection to the licensing. Incidentally, however, the 5/- fee to be charged amounts to another levy on dairying of almost £20,000 per annum, which the Commission neglects to include in its much too abbreviated summary of costs. A Few Additional Costs The paragraph of the Report amending the Stock Act, will have the effect of limiting the bulls to higher producing bulls with a butterfat backing, and will of course put up their price. The effect will also be to increase production as will the elimination of diseases which is sought; and apparently the main desire in the Report is to reduce production. The herd testing provisions will also greatly increase costs, under the new Herd Testing Council (q.v.) Recommendations for improvement of shipping service will provide the shipping companies with a splendid argument for increasing the cost of freight, since already ships come to New Zealand in ballast, it would be extraordinary if the increased cost under this head did not much more than eat up any savings in internal transport.

A paragraph merely referring to the adoption of standardised forms, contains the recommendation that the Board be empowered to examine books and records. As this recommendation is probably intended for use it is pointed out that this would also mean increased expenditure. Another paragraph hints that in control of animal disease, not only would the cost of an army of veterinary officers be loaded on the industry, but that fees would be charged ; and although the paragraph states, “it

places the costs where they properly belong—that is, on the industry,” and claims that there would be a nett gain to the industry through a reduction in the large total annual losses, yet a reduction in cows is actually