SELLING DAIRY PRODUCE

New Zealand Herald, Volume LXII, Issue 18964, 11 March 1925, Page 12

SELLING DAIRY PRODUCE

VIEWS ON CONTROL SCHEME. CASK FOR OPPOSITION. MR. 11. R. HOGG'S CONTENTIONS. Mr. H, 1!. Hogg, chairman of the Opotiki Dairy Association, writes as follows :~— " I am sure that there are many cooperative dairy companies like my own that are averse to absolute control, especially where it. entails the abolition of the right to make f.o.b. or c.i.f.e. sales. Manv co-operative dairy companies have, men upon their directorate at least equal iu business ability and experience to the two gentlemen who have been nominated as representatives of the Control Board in London. 1 he abolition of the freedom of company directors to act according to their own judgment when offers are submitted for their suppliers' produce, must, involve their companies in considerable loss. " Numerous instances can be cited whore the season s pay-out of individual small factories has exceeded that ot laigc factories, where the small factories have adopted a policy of both 1.0.b. sales and consignment, against the large, factories policy of open consignment, for all shipments to Great Britain. Any dairy company director endowed with noraml intelligence who has made a. study of the London market during the past few years can fairly accurately assess when he should or should not accept- a buying offer for his company's butter. Since we have enjoyed a free market following the Imperial * Government's purchase of New Zealand butter, the variation betwecn top and bottom values has approximated fiOs per cwt. At the highei ranee of values the consumptive demand in Great Britain has invariably been curtailed, necessitating a heavy reduction in price to re-establish it, and strange as it may seem, during a couple of seasons when the market has been buoyant, atthese hich values, buying offers, within a few shillings per cwt. of current London values, have been profuse. Any company ■ director refusing these offers becomes a speculator, and a very indifferent. one at that. When the London market is at, say, 21.05, lie should know by a simple calculation that a retail price of at least 2s per lb. is involved, and from experience should also know that this price is beyond the means of the ordinary consumer in Creat Britain. "In February. 1923, the London market, ranged from iO-'ls to 2l'ls, and London merchants were frcelv offering at the time Is 7VI to Is 8d f.o.b. Nyw Zealand ports. Many factories sold at these prices, whereas others, which consigned, realised no more than an equivalent of from Is Id to Is 4d per lb. f.o.b. A pain in December, 1925. and January, 1024, f.o.b. sales wero effected by some factories for butter manufactured during those two months at, equivalent, to 200s and upon its reaching its destinaion buyers were faced with markets ranging from 150s to 100s. Independent of the additional values accruing to companies exercising round judgment with respect to f.o.b. sales, the easy finance from this form of business is not its least benefit. Levelling Down Hcturns. With the abolition of f.o.b. sales similar opportunities could not be seized by experienced dairy company directors, but- they would be compelled to postpone sale* until the arrival of the butter in London and probably for a much longer period, and then accept the market price when the decreased consumptive demand, brought about through high price?, had forced values sufficiently low for its re establishment. There is a strong suspicion abroad that the, abolition of f.o.b. sales by the Control Board is for the purpose of levelling down values of well-conducted companies so that the. larger factories, whose output is too extensive for the ordinary buyers, will not suffer by comparative pay-outs at the end of the. season. " There is another phase of the business which might have a serious effect upon the return to individual factories. For instance, during this season, when many of the large companies were forced to sell all through the slump at prices as low as 156s to 1 Ms per cwt., my company, immediately after the, market broke, instructed its agents in London to store, and hold firm for 180s. We have since been advised that all our butter so held has been cleared at prices beyond 180s per cwt. The Control Board, by adopting absolute control, will deny us the. exercise of ordinary business judgment, which, in a season like tho present, will mean to ourselves and many other companies, the, loss of thousands of pounds. Freedom of Action Demanded. " Co-operative companies should rouse themselves to compel observance by the Government before it is too late and the Order-in-Council commits it to t,he board, of the fact that opponents to absolute control art? not only merchants, chambers of commerce, ar.d the like, but directors of co-operative companies who insist upon freedom of action in the interests of tho suppliers they represent. The board has ample scope for doing invaluable work for the industry without rashly plunging into a phase of the business which is beyond its proved capabilities. " Reference, has been made by members of the board to the success of one company's organisation in London. I know nothing of this London organisation, but J have had a few years experience of its New Zealand marketing methods and I would .strenuously resist my own company's produce being handled through their organisation. It is easy to form a wrong estimate of the conduct of a business by investigators lacking the widest experience, in so short a time a.s the Control Board's delegation had at their disposal in Great Britain. The. only true test is the finalised results over a period of years, and those who, through inexperience, desire, the experiment of absolute control, should be protected from themselves iri tlie interests of the whole country." SOCIALISTIC EXPERIMENT, FFFF.CT ON BRITISH I'CBLIC. Mr. •!. K. Leeson, Morririsville, writes: —-The decision of tho Dairy ExportControl Board to firing in the compulsory clauses of the Act cannot but cause every thinking dairy farmer the gravest concern. At best it is but a dangerous socialistic experiment, which uiav result iu serious loss to the many thousands of hardworking men. v.omen and children who are engaged in the mO't important, industry in the Dominion. Does anyone imagine that it will increase the popularity of broad acres as an investment by the hard-headed business men and lending institutions of the country? We know what they think of it. It will certainly extinguish all healthy competition between factories, as to who shall give the best results in the advance payment, and also the prompt final payment. Our experience in the Waikato j;oes to prove that, where there is n> competition there is a small advance payment, and a lout; delayed final payment, and this will be a huge monopoly for the, whole of New Zealand. The board give;s us very little information on the finances, and certainly no assurance that tho advances will be as large, and the. final settlement as prompt, as under present conditions. The British Government, is, at present endeavouring to formulate a scheme to give some degree of preference to tho foodstuff, from the Dominions. Their opponents are. opposing tho scheme, and Fav in effect-, "Why should we subsidise the people who are forming all sort.-, of pools and combines for the purpose of raising the price of our food \ The foreigner does not do that.' It would therefore be most unfortunate if, at the present juncture, the Now Zealand Government issued the Order in-C-ouncil necessary, and so embarrassed the only Government of England which has ( attempted to give 11s somn sort, of preference. It. would lake all Mr. Massey's eloquence, to persuade the British public

that this is not a socialistic, scheme, and all Mr. Grounds' special pleading to convince them that the control is not for tile purpose of making their butter dearer. Then there is always the risk of a counter move 011 the part of the consumer. Itwould be just as easy for them to form a combine m a similar way, and for a future Government to pass a law making it illegal for any one to purchase our produce, except, through the consumers' pool. I wonder how we should like it ? CO-OPERATIVE TRADING. AUCKLAND COMPANIES' RECORD. "Commerce" writes:- Allow me to commend you on the attitude you have taken in respect, to the rushing of the Order-in-Council, as desired by the Control Board. We are asked to allow the Control Board (a body of good farmers), to gamble and play with the whole of our dairy produce. I claim that before complete control is granted we would he well advised to sec what the various companies trading as co-operative concerns in the Auckland Province have done for the benefit of tho farmers. The word co-operation has become the byword for experimental business management, and with what success? The Farmers' Trading Company, the Farmers' Fertiliser Company. the Farmers' Co operative Auctioneering Company. tho Farmers' Bacon Company (in liquidation), the North Auckland Farmers' Cooperative, with n total capital of £1.500,000 (farmers' money), have not. paid a dividend to ordinary shareholders for three years, with I lie exception of a 7> per cent-, paid by the Farmers' Auctioneering Company last July. The whole of this money has been provided by the farmers, and the concerns managed by farmers, with what success ? There is also the New Zealand Co-operative Dairy Company, with a capital of £735.517 (farmers' money), who pay no interest t-o the, farmers for the use of this money, although small eo operative factories pay interest on share capital. The total amount, of capital of the firms enumerated is over two and a quarter millions, provided by farmers and managed by the same class of men as we are asked fo hand our produce, over too, for fhrm to experiment, with The old adage, "Let, a shoemaker stick to Ins last," may well be applied here, and it the Gov eminent allows themselves to be bustled into granting an Order-in-Council, il will be a calamity to New Zealand, especially to the dairy farmer and business interest s. FARMERS AND MIDDLEMEN. "FREEDOM FROM PARASITES." Mr. C II Mcllsop, 1 levedon, writes: Tt is somewhat, amusing to the majority of farmers to read of the furoro that 13 being created, among the, city business men because we propose, to introduce absolute control of the handling and marketing of our ovn dairy produce, ft is also somewhat of an insult in the whole farming community thut members of Chambers of Commerce should, in effect, charge us with being "rank Socialists" because, forsooth, we have at last partially awakened to the fact that wo are able, to control our own business and are able to throw off the yoke of the middleman or city merchant, who has fattened on us far too long. If, is no doubt, a bit of a shock to those, who have all their lives "farmed the farmer" to suddenly find that the farmer is now objecting to being farmed and is determined to shake off all parasites and use the money they have bled from hirfi in the, past to pay off the incubus on his land, etc. We arc fortunate, indeed, in having men like Messrs. Goodfellow-, Motion, .Tones, Grounds, etc., to work for our welfare, and I am sure that 90 per cent, of the producers of dairy produce are. absolutely 111 favour of compulsory control. It is nothing more or less than sheer impudence for members of Chambers of Commerce to attempt to interfere in what is none of their business. We might just as well go info the cities and. dictate to the merchants what price they shall charge, for petrol, farm implements, manure, etc.. to say nothing of eggs, the price of which is fixed weekly by the merchants instead of by the producer, Truly, the latter is a "long-suffer-ing individual. Nine-tenths of the opposition to compulsory control comes from proprietary dairy companies and their [ supporters and from the afore-mentioned middlemen. Touch their pocnets and t don't thev howl! But their day is done and old Farmer Hayseed is coming into 1 his own at long last. SUPPORT BY FARMERS. OPPOSITION R KSENTET). (BY TELEGRAPH.--OWN correspondent.] I'DKEKOHE. Tuesday. The question of compulsory control of all produce by the Dairy Export Control Board came up for consideration by tho provincial executive of the Dairy Farmers' Union yesterday. It was unanimously resolved to convey to the board an expression of satisfaction at its decision to effect control of all produce in August. 1026, a course wdiieh the meeting fell to be in the best interests of the industry as a whole. A resolution was also carried unanimously emphatically protesting against the. resolutions recently parsed by various chambers of commerce on the ground that the producers, by a large majority, decided to give the Control Board the powers now being exercised. MATTER FOR THE INDUSTRY. Fls FLING AT TACM ARUNUI. [BY TELEGRAPH. — OWN" CORRESPONDENT. ] TAUM A RUNT I. Tuesday. The Taiimarunui Chamber of Commerce considered a remit from the Canterbury Chamber protesting against the action of the Dairy Control Board in regard to marketing produce overseas. The chairman. Mr. G. A. Stanton, expressed the opinion that the producers should first of all give a clear indication that they had changed their minds regarding the necessity for control ; until they had done so the. chambers should not interfere. It was resolved that, in the opinion of the Taumarunui Chamber. the matter was one for the dairy industry to decide, and therefore the chamber could not support the protest, against the Ordcr-in-Council at, the present stage.