DAIRY INDUSTRY

Poverty Bay Herald, Volume LXIII, Issue 19132, 29 September 1936, Page 12

DAIRY INDUSTRY

STATE CONTROL I TWO MAJOR SCHEMES FIXED PRICE EXPERIMENT The two major schemas designed by the Government to bring about a happier state of affairs .in the dairying industry were discussed by Mr. A. .1. Sinclair, secretary-manager of the To Awamutu Co-operative Dairy Company, Limited, and a member of the Dairy Advisory Committee, in an address at the annual dinner of the Xew Zealand division of the. Institute of Incorporated Secretaries, in Auckland. The first scheme was that the farmer should be guaranteed stability, said Mr. Sinclair; in proceeding to'describe the guaranteed price policy. -The price fixed for the present season had been lukewarmly received, because it made no provision for increased costs. Contrasting the position with last season, Mr. Sinclair .considered the first year of the new scheme would give farmers an increased return of Id per lb., but that i-osts would increase by 2d per lb. ■ : “HEAL TEST NEXT YEAR” “The real test of the scheme, however, -will be. wit nested .west- year, when the Act stipulates that the price must be such ‘that any efficient producer engaged in tite dairying industry under usual conditions and in norma! circumstances will be assured or a sufficient net return from his business to enable him io tnain'iain himself an.! his family in a reasonable, state’ or comfort.’ The Government has set up an advisory committee to ascertain just what this statement means, and after a month’s concentrated study, I, a member of the committee, am unable to define the term ‘efficient producer.’ The committee’s task is no sinecure.” Any. deficit caused by the guarantee would be found by an overdraft without interest at the Reserve Bank, Mr. Sinclair added. A definite pledge had been given that the industry would not have to pay if prices did not improve; it would become a charge on the community generally. The uneasiness felt by industry leaders when the Government commandeered produce and undertook marketing was rapidly disappearing. London agents were now generally favourable toward the scheme, which assured continuity of supply. There was no reason why the experiment should not be completely successful at the marketing end. SCOPE FOR STABILITY The Government’s second scheme was directed toward a solution of the greatest problem in the industry—the fact that land values tvere excessive in relation to export prices and production costs. Mr. Sinclair was convinced there would never be real stability in the industry until this problem was settled, and the success or failure of the Government’s unique experiment would depend largely upon the manner in which the Mortgagors and Lessees Rehabilitation Act was administered.

“There is no attempt, in my opinion, to inflict any loss on the mortgagee,” said Mr. Sinclair. The objects of the Act were solely to determine on a fair and equitable basis the loss which had actually occurred, and to have that dealt with once and for all. He believed the Aet contained ample safeguards for the mortgagee, but in a scheme of this magnitude there would undoubtedly be a number of anomalies and a few individual cases of hardship. Nevertheless, he regarded the legislation as a courageous and constructive attempt to bring about an acceptable solution.