DAIRY INDUSTRY

Southland Times, Issue 22295, 10 April 1934, Page 6

DAIRY INDUSTRY

RECENT ASSERTIONS PRIME MINISTER REPLIES ANXIETY TO HELP (Per United Press Association.) Wellington, April 9. “The position of the Government _ in relation to the problems of the dairy industry has been so seriously misrepresented by Mr Goodfellow in his recent statement that it is only right that these points should be corrected,” said the Prime Minister (the Rt. Hon. G. W. Forbes) in a statement to-day. To describe the recent proceedings as the ‘panic policy of our political leaders is an extraordinary perversion of facts. Therefore it is necessary briefly to survey what led up to the conference of representatives of the industry. “This development originated not with the Government, but through the request from a deputation of the executive of the New Zealand Farmers Union which asked that a Royal Commission be appointed to investigate the serious position of the dairy industry, with a view to assisting those engaged in it. After discussion with the Government it was agreed that a wise preliminary step would be to have a conference with the representatives of the industry and there decide what action was necessary. This conference was called and the members of the Dairy Control Board and Mr Goodfellow were invited and attended, but if there was any sense of panic, it could only have been in the mind of Mr Goodfellow, for the Government’s action was first to secure thorough consideration of the situation by those with first-hand knowledge of the conditions. “This representative conference passed many resolutions, among them a request that there should be a delegation sent to England. This according to Mr Goodfellow was done, ‘acting under Ministerial advice,’ but those present at the conference know that although three Ministers addressed the delegates not one mentioned a delegation, the resolution originating from the conference itself. Delegation Proposed. “After the conference the Dairy Control Board proposed to the Government that the delegation should comprise two representatives of the dairy industry and one Minister. The Government’s attitude again at this stage was not one of pressure to send a delegation, but desire to first have proposals of a definite and practical nature formulated before sending a Minister could be considered. The Dairy Control Board was therefore informed that it was the responsibility of the industry to frame proposals which could be submitted to the British Government. It was clearly indicated in a recent cable from the Secretary of State for Dominion Affairs that the first move must come from New Zealand. Meanwhile, there has been no decision to include a Minister in any delegation. These facts suggest that instead of pressing the delegation proposal the Government refrained from any panic move, but endeavoured to steady the position. It wishes to see such a delegation properly equipped for its mission before it agrees to the inclusion of a Minister. “After the way in which Goodfellow has publicly discounted suggestions for the extension of our market for dairy products in other countries, it is refreshing to find that in his most recent statement he advocates an intensive campaign in East Canada, the United States, Panama, the Mediterranean and North Africa. Attack on Ministers. “The unfair imputations of want of knowledge and lack of sincerity on the part of my colleagues, Mr Coates and Mr Masters do not do credit to Mr Goodfellow, for nothing is gained in discussion of very serious and difficult problems by traducing those who hold different opinions. Both Mr Coates and Mr Masters live in important dairying districts, and have always been closely concerned in the interests of the industry. The pamphlet issued by Mr Coates nearly a year ago was designed to give the farmers of New Zealand an indication of the attitude of the British Government and Home producers, on the question of quantitative regulation, and subsequent developments show. the wisdom of providing this early indication of factors having so vital a bearing on the future prosperity of New Zealand’s dairy industry. The facts were presented so that our own farmers would be well informed and able to form an independent and correct judgment. Both of the criticized Ministers have had the advantage of direct consultation with members of the British Government in regard to its policy for the regulation of supplies to the Home market. They speak from first-hand knowledge and have made a close study of the position. Mr Goodfellow’s evident hostility to the Government led him to question both their knowledge and sincerity, an attitude which I feel confident is not shared by the dairy farmers of New Zealand. “The Government is deeply concerned ot secure the most beneficial conditions for our dairy producers, and it is a matter for regret that a gentleman who has shown outstanding organizing ability should in the present crisis take up such an unhelpful attitude. Tire Government has been asked to help , the dairying industry and is most anxious to do so, and it is of the utmost importance that the Government and all concerned in the industry should work in close and friendly co-operation.” REDUCE COSTS MR GOODFELLOW’S PLANS. LEVY ON LOCAL SALES. “First of all,” said Mr William Goodfellow in amplifying his proposals at Auckland on Friday, “all internal costs must come down. This is a matter of paramount importance in a primary producing country selling the major portion of its production on the world’s markets. Goods of all descriptions, other than food, are far too dear, and are restricting the buying power. The farmers carried the high tariff on their backs when prices were good, but now they can do so no longer.” Regarding the first of his ten suggestions (published on Saturday), he stated that no one could tell how much longer the present financial blizzard would last. New Zealand should therefore prepare for the worst, and not continue to hope for the best. When European conditions improved—and there was little indication of such as yet—New Zealand would once again have no difficulty in selling the dairy produce it could produce, provided quality and costs were competitive. Economy of some magnitude could with advantage be secured by, for instance, reducing the size of Parliament by 50 per cent. The tariff should be completely removed forthwith from all those British goods which did not compete with local industries. That would promptly reduce the cost of living to the whole community. Thereafter, the Tariff Commission’s report should be dealt with, and put into operation as soon as possible. The United Kingdom was New Zealand’s only big market, and we should aim at a permanent policy to keep the exchange on a parity with sterling. Until the tariff had been substantially reduced, and some improve-

ment had taken place in the world’s markets, the dairy farmer should receive a subsidy to enable him to carry on. The British Government established a precedent in that respect; therefore there could now be no objection from that quarter. The Government, by propaganda, should recommend dairy farmers to go in for diversified farming. For instance, they should take advantage of the present high price of pigs foi- export to Great Britain, and put on sheep and produce poultry rather than increase their dairy herds at the present time. The Government should aim at a steady and permanent improvement in the average quality of both butter and cheese. That could be accomplished with the co-operation of the Dairy Produce Board. Reorganization of the Board. The Dairy Produce Board should be reorganized, with the object of making the board efficient, and a strong leader for the industry. As at present constituted, it could seldom be unanimous on any subject or matter of policy, thus endless dissension resulted. What was wanted was a board with a sound, progressive, stable policy—an impossibility under the present constitution. The directors of dairy companies should elect a National'Dairy Council by means of a ward system, based on tonnage of produce. This council could meet occasionally to discuss matters of policy, and, from its members, elect an executive or board to carry out its instructions. Such a board would have a definite objective, and would periodically report back to the council, where members would be in training to fill any vacancy which might occur from time to time. A board so constituted would get on with the important business of the industry, and give a lead in all matters of importance. He did not desire to cast any reflection on the existing board members, who were obviously making the best of an impossible position. The question of reorganization of the board was a matter of vital importance, which could be quickly put right if the Government were genuinely anxious to assist the industry. “Our selling system in the United Kingdom is all wrong,” said Mr Goodfellow. “This was realized by the New Zealand Co-operative Dairy Company when a thorough investigation was made in 1922. Nearly 10 years ago a patting plant was established in London by the company, and, since that date, the ‘Anchor’ pat trade has grown steadily, until to-day about 90 tons of butter per week are being packed in the familiar New Zealand parchment wrapper, and sold in quarter-pound, half pound and one pound pats throughout Great Britain. “Practically the whole of the New Zealand, Australian and Argentine butters shipped to the United Kingdom are sold in bulk, and this fact makes substitution extremely easy. Further, it is almost impossible satisfactorily to advertise and push a bulk line, as there is no guarantee that the customer receives what is asked for. Then again, the patting of such butter in the United Kingdom overcomes the spreadability difficulty, as the result of the butter being frozen.” Stimulate Trade. Mr Goodfellow said that, in his opinion, the Dairy Board should immediately establish three large patting plants, say, in London, Manchester and Glasgow, where bulk New Zealand butter would be examined and then repacked in Alb, lib and 11b pats under the Fernleaf brand. If that proposal were tackled in a business-like manner it should be possible fairly rapidly to build up a trade in packet butter of, say, 20,000 boxes a week, which could be gradually increased over a period of years, until the bulk of New Zealand butter was sold in that manner. By that means Danish prices could be obtained for finest New Zealand butter, and a good will of enormous value would be built up for the New Zealand dairy industry in the United Kingdom. He had suggested three plants in order to give quick delivery. It would be advisable to employ about 50 travellers, to be stationed throughout Great Britain, each to be responsible to canvass a given list of shops for orders weekly, the orders to be handed to the particular grocer’s wholesale distributor for delivery and credit. The manager of the pat plants would buy his weekly requirements from London importers, and thus prevent friction, with Tooley Street merchants and, at the same time, raise the price by buying large quantities on the market regularly. In addition to a large number of travellers, anything from £75,000 to £lOO,OOO a year should be available for publicity of all classes in the United Kingdom, including talking films. Marketing Levy. In addition to organizing an active campaign to cover the British market, the Dairy Board should employ several travellers, to be located at central points, for the purpose of developing new markets, and to watch the interests of the New Zealand dairy producers and exporters. For instance, a representative could be located at Hong Kong, who would periodically work the whole of the East; anotner at Montreal, to keep in touch with the Canadian and American territory; a third man at Panama to work the Central American territory, and a fourth at London to work periodically the Mediterranean and North Africa. Mr Goodfellow stated that his own company was doing business in all these localities, but the cost was too great for any one firm actively to pioneer small markets, and the work could be done much more efficiently by the Dairy Board, acting on behalf of the whole industry. The scheme would cost money, but that could easily be found if the Government gave the Dairy Board the necessary legal authority to make a marketing levy on all dairy factories of Id per lb on all local sales of butter, and Id per lb on cheese. Dairy produce was sold at very low prices in New Zealand, and an extra Id on the retail price of butter would not affect consumption one way or the other, and would be readily accepted by the public if the money were to be spent for improving the marketing of New Zealand produce. By that, means the Dairy Board would collect annually, say, £250,000, without any payment whatsoever being made by the dairy farmer. Mr Goodfellow said he had given this scheme a good deal of thought, and as it was based on his own experience in marketing the produce of the New Zealand Co-operative Dairy Company for many years past, he was certain that it would mean an increased return to the whole of the dairy farmers of the Dominion, and without any additional cost to them whatever. Acquisition of Plants. Referring to the London patting plants, Mr Goodfellow said that it might be possible to induce the directors of the New Zealand Co-operative Dairy Company to hand over, as a going concern and at a reasonable price, their new freehold property and plant, located in South London. The Anchorpat factory output in Great Britain now approximated 90 tons per week, and was being extended at the rate of 500 tons per annum. All expenses, including advertising, were paid out of profits. The capital required for each plant would be approximately £40,000, and he had no doubt but that the money could readily be obtained either from the bankers of the Dairy Board, or from the Government. The revenue would be sufficient to enable the cost of the plants to be repaid within a period of three years. In conclusion, Mr Goodfellow stated that it should be remembered that there was, in reality, no over-production of dairy produce, but rather under-con-sumption, especially in Europe, where quotas and tariffs had greatly restricted the normal consumption of butter. Sooner or later, the financial hurricane

would pass, and once again closed markets would gradually reopen, and New Zealand would, if well equipped, be called upon to supply all the highgrade butter and lamb she was capable of producing, as in the production of these two products our climate excelled all others. “Let us, then,” he added, “set our house in order now, so as not only to weather the storm but to profit to the full when the world outlook is brighter.” PROPOSALS SUPPORTED CHAMBER OF COMMERCE PRESIDENT. (Per United Press Association.) Auckland, April 9. General support of Mr William Goodfellow’s dairy industry programme was given in a statement to-day by the president of the Chamber of Commerce (Mr A. S. Lunn). He said the propositions made by Mr Goodfellow who must be looked upon as probably the leading expert in the dairy industry, must be fairly considered, not only by the Government, but by all organizations interested in the welfare of the dairy industry and of the Dominion. He stated that some of Mr Goodfellow’s proposals had been advocated by Chambers of Commerce. Regarding the exchange rate, he said the suggestion of a temporary subsidy would enable the Government to give relief only where it was urgently needed, whereas the exchange benefited also those who did not need help. “QUOTAS MEAN QUALITY” EXPERT SELLING REQUIRED. “There is much in Mr William Goodfellow’s statement in relation to our dairy produce that is worthy of attention,” said Mr C. S. Mackay, principal of the Southland cheese marketing scheme, to a reporter yesterday. “Of course it must be remembered that Mr Goodfellow is vitally concerned with the marketing of butter, whereas we in Southland are wholly wrapped up in the export of cheese. However, the problems affecting both industries in relation to marketing and quotas are very much the same, and a survey of the difficulties being experienced by exporters is always beneficial. “This quota question is really a question of quality—of that I am sure,” said Mi* Mackay. “Here in Southland more than 50 per cent, of our total cheese exported is graded finest; in the North Island under 20 per cent, of the output attains this grade. This clearly shows that Southland has proved itself a maker of cheese of the best quality. Therefore I maintain that when it comes to the question of restrictions—and restrictions of some kind are coming—quality must be the main consideration. The produce to be restricted will be the lower grades. Southland, under the circumstances, should not have any restrictions imposed on it for a very long time. When all the lower grade produce is dealt with, and kept off the Home market, there ought to be no chance of restricting our best quality cheese. “Mr Goodfellow says,” Mi’ Mackay continued, “that there is no over-pro-duction, but under-consumption of our dairy produce. In other words this is a severe condemnation of our selling methods. I am of the opinion that it should be our main consideration to see that our cheese is sold in the most business-like way. It always seems to me that if our cheese is worth all the time and all the money we spend in making it, then surely it is worth our utmost effort to see that our product is marketed properly. To maintain our position on the Home market wc must be prepared to do our selling better than we have ever done it before. “Sooner or later New Zealand must come to the system of marketing that we are trying to institute in Southland, namely, marketing our produce by its district. And the district that gets established first will reap the reward, provided always the quality is right. Mr Goodfellow has realized this himself in connection with the marketing of his butter. I am informed from a reliable source that he gets a premium up to 2/- a cwt for his Anchor brand butter on the Home market. This is a wonderful achievement.” OTTAWA AGREEMENTS SITUATION BEING EXPLOITED. (United Press Assn.—Telegraph Copyright.) (Rec. 7 p.m.) London, April 8. The News-Chronicle says that powerful commercial and political interests are trying to exploit the situation consequent on the expiry of the Ottawa dairy agreements in June, 1935. The President of the Board of Trade, Mr Walter Runciman, is so involved in foreign trade agreements and the Minister of Agriculture, Mr W. E. Elliot, is so entangled with British marketing schemes that the Government will probably restrict New Zealand dairy imports when the Ottawa agreement expires. A large farming section appears to be quite prepared to ruin local industry in return for unrestricted agricultural markets. British manufacturers have organized to support this attitude. British and New Zealand commercial interests arc issuing propaganda, stressing their individual desires. Thousands will be made and lost in speculating on an ultimate AngloNew Zealand agreement.