THE New Zealand Herald AND DAILY SOUTHERN CROSS FRIDAY, OCTOBER 19, 1934 DAIRY COMMISSION REPORT

New Zealand Herald, Volume LXXI, Issue 21935, 19 October 1934, Page 10

THE New Zealand Herald AND DAILY SOUTHERN CROSS FRIDAY, OCTOBER 19, 1934 DAIRY COMMISSION REPORT

The report of the Dairy Commission has been produced. The task entrusted to this body was heavy, for it was asked to survey, in all its aspects, an industry that is nationwide in scope, spread over a great number of producing units, and at the present time labouring under abnormal conditions. The first impression created by the report is that of thoroughness. It is long without being diffuse, and detailed without being prolix. Its contents will not please everybody. That would be impossible. There will be criticism of it in plenty, attacks both for what it contains and what it omits; but nothing will be able to remove from this report the tone of earnest endeavour to come to grips with the essential problems. The recommendations of the commission seem, on the whole, to be helpful, and, in spite of features which might have' been labelled revolutionary three decades ago, these recommendations can be classed as moderate; this is especially so considering much of the sentiment current to-day. It is true the plans proposed involve a considerable measure of control over the industry; but there is control now, and what is recommended sounds like being of greater practical value than what exists. The most substantial increase in the measure of control is that proposed for the domestic market, but the commission shows this to have been approved in principle by the industry itself. No price-fixing above the world parity is advised. It is suggested that savings made by reorganisation should be returned to the producer, indirectly; but even here it is recommended that when the export price of butter exceeds 100s the New Zealand consumer should gain some benefit from the economies. It is a sliding-scale of a primitive kind that can be readily commended. Within the measure of control it proposes, the commission advocates a plan to aid dairying—but it is a long-range plan. Various remedies for immediate cash assistance are considered and rejected. Thus direct subsidies, levies on the domestic market for the benefit of export returns, and guaranteed prices for output are definitely cast aside. The arguments leading to their rejection are clear, and, to the dispassionate view, convincing; though the refusal of the commission to adopt any of these remedies will probably sharpen the edge of criticism by those who have strenuously advocated them. Turning now to the positive recommendations, these are briefly summarised by the commission itself. First place is given to a rural mortgage corporation, on the lines of the wider mortgage corporation outlined in the Budget, in this instance specifically to refinance farm mortgages. This proposition is prefaced by the suggestion that fully 50 per cent of dairy farmers are unable, in some degree, to meet their financial obligations to-day. Probably this is an exaggerated and unduly pessimistic estimate. It is a sweeping assertion, made too positively since it can be based on nothing more than conjecture. Besides, it is unnecessary. Everyone would agree that the problem of meeting his interest is the dairy farmer's greatest difficulty in these days of record low prices. The corporation proposal is the plan to help him. It is on the lines of what was sketched in the Budget, with added details. One is that the interest on the proposed bonds should be adjusted, at intervals of three years, and the farmer's interest similarly adjusted. In bare outline the whole conception appears a valuable contribution to a baffling problem. Details considered, difficulties can be foreseen. It would be easy and popular to reduce interest on farm mortgages. Would it be as simple to raise it? Again, there are the cases, not a few, in which farms are overmortgaged because of having been over-capitalised. The commission suggests a suspense account for the marginal amount, and supervision of the farmer's activities. This means, in effect, limited receivership for a large number of farms, a situation with its delicate side. The whole scheme definitely needs to be hammered out on the anvil of more extensive discussion and possibly experience. The next proposal, regarding quality, touches a phase of dairying which has been deservedly emphasised *by many commentators, from the Governor-General downward. Broadly it can be accepted that nothing contributing to the production of a better article is unimportant. The plans for improving factory and farm equipment and'for stimulating research are of practical value. The proposal to eliminate the tubercular cow wholly £tnd finally is also highly important. Its achievement would, for one thing, furnish a telling advertising point. But it would involve spending £1,000,000 of public money, none of which, it is said, would be recoverable. The other proposals are estimated to cost £2,025,000 between them ; this the State is to supply in the first instance, but £1,800,000 is marked as recoverable. If full valua can be assured from this expenditure, it need not be grudged ; but there must be substantial assurance that it will be. The next two proposals involve a reconstituted Dairy Board, and a permanent Commission of Agriculture, with wide powers to supervise and control production

and marketing through the various produce boards. These are merely the agencies for that higher measure of control already discussed. The commission then recommends an investigation of marketing in the United Kingdom, and consultation with the British Government concerning New Zealand's interests and difficulties. This last is a most commendable proposal, particularly the suggestion that the Dominion's special claims to consideration should be pressed. They should, and beyond all should the absence of subsidies, fixed prices in the domestic market and other conditions making for dumping, be emphasised. These, then, are the substance of the proposals which make the Dairy Commission report a document to be taken seriously, and to be considered carefully with eyes open to see both its merits and its weaknesses.