DAIRY EXPORT

Southland Times, Issue 19502, 17 March 1925, Page 8

DAIRY EXPORT

COMPULSORY CONTROL CLAUSES.

ARGUMENTS FOR AND AGAINST

POWERS OF THE BOARD EXPLAINED.

THE ACT EXPLAINED. GOVERNMENT CONSENT NOT NEEDED. (Per United Press Association.) WELLINGTON, March 16. In connection with the assumption of absolute control by the Dairy Produce Control Board, a statement by the AttorneyGeneral (Sir Francis Bell) was issued by the Minister of Agriculture to-day. The Government is in receipt almost daily of resolutions from Chambers of Commerce and letters from business firms and individuals, clearly indicating that the bodies passing resolutions and the writers of the letters are under the impression that the question w’hether the Dairy Produce Control Board, constituted under the Act of 1923 should or should not exercise its statutory power of assuming absolute or limited control of export of Dairy Produce is a question for determination by the Government, or alternatively that the issue upon advice of the Government of an Order-in-Council under Section 12 of the Act is a condition precedent to the assumption by the Board of such control, and that the Government can therefore prevent the Board from exercising its statutory discretion by declining to advise His Excellency to issue that Order-in-Council.

That impression, says the statement is entirely erroneous. The fact is that the Government has no power, right or authority to dictate to the Beard or to interfere in any manner with the Board or to interfere cise of the Board’s discretion. The Dairy Produce Export Control Act passed in 1923 made provision in its second section that the Act should only come into operation on a date to be fixed by the Govern-or-General in Council by Proclamation, and that that Proclamation should not issue unless a majority of the producers, at a special poll to be taken for the purpose, voted in favour of the proposal that the Act should be brought into operation. Thus, by its first provision, Parliament directed that it should be for the producers to determine at the poll whether or not the powers conferred by the Act (which are exactly the same as the powers which had been conferred on the Meat Export Control Board by the Meat Export Control Act of 1921-22) should come into force, and there followed provisions enacting that «if the majority of the producers decided that the powers should be conferred, then that those powers should be known as the N.Z. Dairy Produce Control Board, consisting of 11 persons, two appointed by the Governor-General on the recommendation of the Minister of Agriculture, and nine other persons elected by a direct vote of the producers, 6 from the producers carrying on business in the North Island, and 3 from the producers carrying on business in the South Island.

The first poll to determine w’hether the Act should or should not come into force took place on October 17, 1923, and by a large majority, (the figures being 22,284 for and 9,255 against), the producers determined that the Act should come into force, and consequently determined that the whole of the powers conferred by the Act should be entrusted to the Board of Control upon which the producers were to be represented by 9 persons, elected by themselves, and the Government only by 2 persons, appointed on the recommendation of the Minister of Agriculture. By Section 13 of the Act, it is provided that the Board is empowered to determine from time to time the extent to which it is necessary for the effective operation of the Act and the fulfilment of its purposes, that the Board should exercise control over the export of dairy produce from New Zealand, and the Board may assume control of any such dairy produce accordingly, and by subsection (4) of the same Section, it is enacted that

“The control to be exercised by the Board over any Dairy Prduce may, as the Board in any case determines, be absolute or limited.”

It is therefore not arguable that the Government has any authority or discretion in the matter. Parliament left it to the producers to say w’hether or not they would have a Board of Control export, and in the event of their decision inthe affirmative, Parhament gave them a Board elected by themselves to determine to what extent the statutory powers should be exercised, and with the functions of that Board and its exercise of statutory duties, Parhament has not conferred upon the Government any authority whatever to interfere.

By sub-Secrion 1 (of Section 14) of the Act it is provided that after a date to be appointed by the Board by public notice, no contract for carriage by sea, of any Dairy Produce to be exported from New Zealand should be made safe by the Board, acting as agents of the owners of that Dairy Produce, or of other persons having authority to export same, or in conforming with conditions to be approved by the Broad. By sub-Section (2) of the same Section it is provided that:— “Every contract for the carriage of Dairy Produce by sea made other than in conformity with this Section shall be void.” By sub-Section 3 of the same section it is provided that every person other than the Board, who after the date appointed by the Board exports any Dairy Produce from New Zealand, shall on making an entry under the Customs Act, and before such entry has been passed, produce to an officer of the Customs, sufficient evidence to satisfy him that the contract for that shipment has been approved by the Board. Therefore if, and when, the Board appoints a date by public notice under Section 14, that notice effects the complete purpose of vesting absolute control in the Board and prevents any export or any contract for export contrary to the Board’s control. Not only does sub-Section 3 compel the Customs authorities to prevent unauthorised export, but every Harbour Board and every ship would have instant notice that every contract of carriage was void under sub-Section (2), and illegal under sub-Section (1).

The Government has not the power to interfere with the discretion of the Board under Section 14. The Board is the producer’s Board, and not a Government Board although two of its members are appointed by the Government. The decision is the Board’s and not the Governments.

The wholly mistaken impression that an Order-in-Council must issue before the Board can exercise its powers, has no doubt been created by Section 12 of the Act, which is in the following terms: — “For the purpose of enabling the Board effectively to control the export, sale, and distribution of New Zesdand Dairy Produce, the Governor-General may act under the powers conferred on him by the Customs Act, 1913, and its amendments, prohibiting the export from New Zealand of any dairy produce, save in accordance with a license to be issued by the Minister of Agriculture, subject to such conditions and restrictions as may be approved by the Board. No one con seriously argue that this section is anything else than an auxiliary provision, allowing the Government to provide further means by which the Board can en-

force its assumption of control. If the Government did not advise the issue of an Order-in-Council under the Customs Act, it would not thereby affect in the least either the decision of the Board or the result of the Board’s decision. The reason for the insertion of Section 12 was to enable better effect to be given to the Board’s resolutions where the Board resolved to assume not absolute, but limited control. The Minister of Agriculture is introduced into that Section as a licensee to instruct the Customs authority of “the conditions and restrictions approved by the Board in the case of export,” and where the Board assumes limited control and prescribes conditions specially applicable to limited control, then Section 12 can be usefully employed to enable the Customs to be exactly informed from time to time of the conditions under which produce may be exported by individuals, but when the Board assumes absolute control, there is nothing left requiring a license and the full additional effect is given to that decision through the Customs by sub-Sec-tion- (3) of Section 13, already quoted, which requires that the Collector of Customs must have an entry for export, with evidence that that export is permitted by the Board. In fact, Section 14 provided all that is necessary in the case of assumption of absolute control, while Section 12 is a useful adjunct to the Board in any decision to assume limited control. It is hoped that this statement may remove the erroneous impression that the Government can control the Board in the exercise of its discretion, by agreeing or refusing to issue an Order-in-Council under the Customs Act.

CASE F 0 RTHE BOARD,

THE CAMPAIGN OPENED. A SENSATIONAL STATEMENT. (Per United Press Association.) PALMERSTON NORTH, March 16. Mr W. Grounds, Chairman of the Dairy Export Control Board, opened a campaign on behalf of the Board’s policy of “absolute control,” when addressing a large body of dairy producers this afternoon. He was accorded an excellent hearing, and at the conclusion a vote of thanks and confidence in Mr Grounds as the Board’s Chairman was passed. An attempt to move an amendment was not taken seriously by the Chairman, Mr S. A. Broadbelt. Mr Grounds outlined the reasons which prompted him in deciding to hold the first meeting at Palmerston North in expressing the hope that he would be able to explain many matters which had led the members of the Dairy Produce Delegation to London to the conclusions contained in their report. He had come to Palmerston North first because he had received invitations simultaneously from Manawatu and the West Coast Dairy Associations and Dairy Farmers’ Union, and these were the first bodies to invite him to address the farmers. He also came to Manawatu to meet some of the alleged misrepresentations and misunderstandings which had been manifest through some of the papers. It had been said that the Control Board was dominated by Waikato influence, and when he had refuted this, it was stated that surely he must have known that if it had not been for the influence of the Waikato Companies, the ward system of voting would have been granted last year. The speaker claimed that he had no knowledge of this, but on the contrary had information to the effect that the request for the ward system of voting had been declined, because it would have meant an amendment in the Act. It had also been said that the speaker was opposed to the ward system, but there was no justification for this assertion. To-day the Board and the speaker recognised the desirability of the ward system of election, but it was one of the points which did not come within the scope of the Board’s power. “Some of the opponents of absolute control,” continued Mr Grounds, “recognise the necessity of limited control, and they agree to everything else but marketing, and ask for it to be left to the Chambers of Commerce. I agree it is necessary for farmers to specialise in economic production, and understand their point of view, but we want to produce high quantity at lowest cost in order to become efficient and compete in other markets. “UNDER FALSE PRETENCES.” The speaker went on to deal with the discoveries of the Board’s representatives when abroad, and they had returned with the conviction that the laxities at both ends, here and at Home, could only be tightened up by the entire control of the Dominion’s dairy produce. He urged the necessity for a national brand, and also touched upon the question of boric acid in butter. In discussing the interpretation of the Act, the speaker said that among criticism which had been levelled at the action of the Board was one, that the Act had been brought in under false pretences, and it was surprising that this allegation had been woven into legal opinion in respect to the working of the Act, to which attention was recently drawn. One of the papers had secured legal opinion, and it had surprised the speaker to see that the assurance that absolute power would not be taken had been woven into it. The Board had secured an opinion from its counsel, who said that it could under the present Act exercise absolute control, though in the event of litigation being brought, the Act was supplemented by an Order-in-Council. The Board did not want to be' harassed with legal opinions, but wished to get on with its work and do it properly and well, and the Act was quite secure in respect to absolute control, but not in respect to limited control, for there was no such thing. Limited control was no control at all. What justification was there for saying that an assurance was given that absolute control would not be taken? What had been said was that a complete investigation of the position should be made by the Board before any conclusions were formed. He saw evidences of factories in their own way instituting a system of control too. If they had not the last word in the disposition of produce any so-called control was useless, but let there be no further comparison regarding absolute and limited control. Those advocating the latter said: “Let them fix insurance, advertising, shipping, investigating of the market, but have no control of the market. He declared that he recognised the source of much of this opposition, and he submitted that while he recognised some interests in business would certainly suffer, yet in the improvement of any industry it would always be so. He instanced the burning down of factories with new machinery at the beginning of the industrial era in Britain, but the process had to continue. POOLING A SUCCESS. The competition from f.o.b. sales was only secondary, and it was desired to maintain the same channels of marketing, provided they were efficient. Apart from regulating shipping, which involved the pooling of produce for returns, how were they to develop new markets. It was impossible unless there was one control of shipments. What of pooling? It was frequently declared that factories had rooted objections

to pooling, he admitted this, but declared that most of this objection arose from the experiences of the war. Wherever scientific marketing had been undertaken, it had proved a success. The cranberry growers of Wisconsin, and the citrus fruitgrowers of California were instances in this respect. Based on the Board’s experience also, pooling scientifically done was a sound proposition. Mr Grounds went on to speak of the demand for a particular brand of butter in the United States as a result, an example of what could be done by push and advertising. Where is the finance coming from? It was coming from the same merchants, only it would be d<sne in future through the Board instead of through individual factories. The speaker went on to tell how the delegates secured their information in London, stating that they called upon all the importers and invited them to discuss various matters. They readily assented, and after varied aspects had been discussed, some of the leading importers could forsee no appreciable difficulty in the successful working of the Board. The delegates had seen many weaknesses and did not want the producers. to be subject to some of the undermining influences, which governed prices. They heard of the antagonism of Tooley Street, but the merchants there recognised the advantages of a stabilised market, for they knew that by it would be regulated the amount of produce which was to pass through their hands. The stabilising effect of this consolidation of interests in London would tend to increase the stability of finance rather than impair it. Questions were asked as to whether the Board could guarantee the same advantages as the producers were getting at present. “We say yes, if you want it sold in the same way, but we do not want that, we want the market stabilised and a system introduced under which we can sell produce with much better results. Any factory which decides that the price is not good enough, can hardly expect to get some advances against a reservation. This is the soul of the whole co-operative movement—make a sacrifice to-day and reap a greater benefit to-morrow. If we think that by making a reservation we can secure better average prices; that is our business, and finance will be stronger under the Board than it is at the present time.” Owing to increased stability caused through consolidation through the Board, the Tooley Street merchants interviewed had promised the same financial assistance as hitherto. A SENSATION CAUSED. Subsequently relative to this point, Mr R. Cobbe, Member of the Dairy Council, produced a cablegram stating that the delegation from New Zealand had never met the Dairy Produce Importers’ Association of London (comprising the whole of the Tooley Street merchants), on the matter of finance. A sensation was caused. Mr Grounds warmly reiterated that the delegation had discussed finance with every single member of the Association. MEETINGS AT PALMERSTON NORTH. WARD SYSTEM OF ELECTION FAVOURED. PALMERSTON N., March 16. A largely attended conference of members of the Dairy Farmers’ Unions, Wellington Provincial District, was held this morning to consider the attitude of the Union towards the Dairy Control Board. The meeting was in favour of a ward system of election. The consensus of opinion was that farmers should assist the Board as far as possible, though * they agreed in some respects with its actions. At another meeting this morning, of the West Coast Dairy Companies’ Association, a resolution was passed expressing an earnest protest against the absolute control of dairy produce, and against the issue of an Ordder-in-Council until the Act was amended to provide for the election of the Board under the ward system, and until an election was held under that system.