DAIRYING INDUSTRY

New Zealand Herald, Volume LXXIV, Issue 22617, 4 January 1937, Page 12

DAIRYING INDUSTRY

WORK OF RATIONALISATION COMMISSION'S ACTIVITIES The rationalisation of the dnirv in dustry by the elimination of redundant production units and tho zoning of dairy factory supply areas with a view to avoiding uneconomic and wasteful competition is a problem to which the Executive Commission of Agriculture has given much attention during 19.16. Ily negotiating boundary agreements and arranging for mergers of dairy companies where the circumstances have made that course desirable, the commission has been able to eliminate from many districts the overlapping that previously existed in the collection | of milk and cream for manufacture into butter and cheese. A great deal of this work during the year has been done on a purely voluntary basis. The procedure followed by the commission in rationalising the manufacture of butter and cheese, was discussed by the deputy-chairman of the commission, Sir Francis Fraser, in Well ington. "There is no one method of rationalisation," he said. "The commission has always to take into account tho configuration of the district concerned and the location of existing factories, as well as the total volume of cream supply from the area. "Where it is possible by rearranging collection routes so that each ol' tho existing companies can maintain approximately their present volume of supplies that course is followed. Sometimes this is impossible owing to the collection services of one company traversing the areas of several other companies. Jn such cases us that, a company may be deprived of part of its supply, and the companies gaining arc required to pay compensation to the company that loses tho supply. "In other cases, where, owing to the proximity of factories to ono another, it is impossible to allot exclusive zones, zones are allotted jointly to two or more factories, but an effort is mado to allocato collection routes within those zones so as to minimise ovcrlnppi ng of services.

"As nn alternative the commission sometimes endeavours to arrange nn amalgamation of companies operating in the same territory. In all this work the interests of n supplier to a cheese factory and those of a supplier to a lmiter factory are kept separate. Although the commission is empowered to /.one one butter factory as against another, ana one cheese factory as against another, the supplier has freedom of choice whether ho will supply a butter or cheeso factory." Sir Francis said that one result of the elimination of unnecessary longdistance cartage of cream would most probably be an improvement in the Quality of New Zealand butter. It was generally accepted bv experts that the earlier the cream was brought into the factory the better it was for the quality of the product. "There is still ft tremendous amount to be done before the industry can be considered properly rationalised," be concluded.