DAIRY INDUSTRY CRISIS

Taranaki Daily News, 5 December 1930, Page 11

DAIRY INDUSTRY CRISIS

.NEED FOR URGENT ACTION, IMPROVEMENT IN MARKETdiiG, I SEDUCED COSTS IMPERATIVE, i DECISION OF DAIRY COUNCIL. By Telegraph.—Fr<??s Association. ! ‘\ • Wellington, Last Night. With the dairy industry facing a crisis of the first magnitude extreme hardship could only be minimised by the co-operatiye dairy companies acting in unison to secure more efficient marketing and by general action throughout the | community to reduce the costs of production, said Mr.,W. Goodfellow, managing director of Amalgamated Dairies, addressing the second annual meeting of the New Zealand Dairy .Council to-day, Js:hen he gave a full analysis of the posi- - tibn. ■ ■ ■ ' . './ The council resolved to urge the- Government to endeavour to arrange for the British Government to tax foreign food imports, ■.New Zealand agreeing id re- ■ turn to a reduction, of duty on British goods. The-council also decided to in- ; : stjtute action calling on. London import; ers to devise methods to prevent marketing weaknesses and strongly favoured the organisation of the marketing end of the.industry by co-operating with Amalgamated'Dairies or adopting some other marketing scheme. ? ' •.•'* • The ..producer was riqw receiving less ‘ than pre-war value for his goods, said Mr. Goodfellow, and it was impossible to maintain, much less expand, the dairy industry unless immmediate steps were taken to reduce the farmers’ cost's. This should best be accomplished by. (1) an all-round reduction of Government, municipal arid,, county council expensed; (2) reduction in the duty on all dairy factory and farmers’-.requirements, some of -which were now levied as high as 20 and 30 per cent; (3) the establishment of the railways under independent commercial control to avoid the annual deficit whose burden was borne by the ,whole community; (4) by suspending the i. Arbitration Court and allowing a natural basis to be established; (3) by removing the duties du wheat and flour, thus reducing the cost of living and permit-ling-the expansion, of essential industries, such as- pig and poultry produc- ’ tion; (6) by ' the establishment of a ■ strong coalition government.

’ 'STRONG-GOVERNMENT NEEDED. In view’ of the heavy; reduction in 1 the prices of all primary produce and •its reflex in the national* income it was imperative that the' present three-party system be terminated as quickly as possible. Only a strong Government could .’reduce expenses. It was vital . for a strong Government to get together .and-cut. down national expenses right and left, i-"/; X-;-.■' /'■/'.? • In an exhaustive.-review of the dairy position, Mr. .Goodfellow pointed-out that in ; spite of- Britain’s heavy, imports -of ' butter there was room for considerable expansion of butter consumption in-the jUnited Kingdom, provided always that .the pricq was competitive with'margarine. There was no question that the < C problem facing . the -dairy industry exceeded in magnitude any prevjous. problem which had confronted the- industry. There was the'difficulty created by dairy production throughout the world racing ahead of consumption’,’and- the further difficulty of the general collapse in the . world’s,ygdues..of, all commodities. The reason "for this world-wide depression was attributable to three main causes: (1) A.shortage of gold; (2) the restricted purchasing power of 25, per cent, of the world’s population; (3) the adoption of exclusion tariffs by certain coun-

tries. What the dairy, industry would like to. know, said Mr. Goodfellow, was how long the present world depression was going to last. Some-authorities indicated that a specific improvement could be looked for in the United Kingdom in about two years’ time,- but there was no doubt in his-opinion That the future prosperity of New Zealand would depend very largely l upon the ability of the country to set its house in order. The 1921 slump was shortlived owing .to the worjd. shortage of food supplies. On the present occasion, however, the markets were amply- supplied -owing- to increased production. . ' Dealing with the need for more efficient marketing Mr. Goodfellow said that combined centralised buying, the multiple shop companies and the co-opera-tive societies in the United Kingdom necessitated a change in the highly competitive system of selling New Zealand dairy produce. Under the present, conditions the method-of marketing New Zealand, produce, was hopelessly out of date and ’ required/rationalising to eliminate as far-a's? possible all unnecessary ' competition. . This- was. the only method of securing to ' the producer the fair market; value for his goods. -The Danes . were securing a superiority of from 30s. to- '-iQs.-Tper cwt. because their marketing method Svas better,, and hot competitive in’the sense that New Zealand’s ; =. -'was/- ; “AGENTS DISGUSTED.” . I ■ Mri Goodfellow said that some of the best- agents’ in London were utterly disgusted, with the way the co-operative ’ dairy companies in New Zealand handled their’business. Frequently the consigning, agent Who hact.no' worth-while selling organisation in London secured produce from the factories by means of a clever plausible -commission agent and then deliberately undercut prices jby shooting the goods but through a broker prior to arrival and at a-nominal cost of J per cent. . -'.The market had been’ depressed by such. people, and in order to,hold their accounts the best Tooley Street firms had .had, no alternative but to do likewise or lose their business.

Last autumn Amalgamated Dairies had resisted' the fall in butter, with the, result that all New Zealand benefited/to the extent of a huge sum, but’ the average price received by them for 16 shipments was lower than that of “quick-quitters” who let '-the market down. The. result of that action of Amalgamated Dairies had been that the market had eased slowly. The. only, cheerful feature about the financial_ position was the premium secured’ Jtq' the producer by the exchange position. If the position remained as it was this premium to the dairy industry would amount in the coming season to approximately £’5OO,OW. The policy of the banks in encouraging the export of primary produce and imposing exchange rate/., against ■ the importer of overseas goods was absolutely sound. jjjiscussing the future, Mr. Goodfellow , emphasised that the producers stood to gain more by organising their market-1 ing functions properly than by any other single course. Action was co-opera-tive. Directors would have to take a more intelligent interest in the marketing erid of their business. All the co-op-erative companies should, cable their London agents urging them to get together , and reduce competition in the sale 1 of New .Zealand dairy produce. Cables recently ireceived showed that Tooley Street -Uould not. move in this

matter without definite instructions fro'm the owners of the. goods. The fact was that New Zealand had the worst marketing system of. any dairy produce exporting country. Every other country exporting dairy produce in ■substantial quantities had export organisation. controlled by experienced commercial men capable of exercising supervision over the sale of goods. In NewZealand 500 .factories divided their outputs among.3o agents without exercising any supervision upon the sale. At' the conclusion of Mr. Goodfellow’s address Mr. Dynese .Fulton (in the chair) 'stressed the need for the producers effectively'to combine to secure betterment in marketing methods.. .The directors of . Amalgamated Dairies were prepared to co-operate wit'h any organisation or group that could propose any betterment.

A special vote of thanks was accorded Mr. Goodfellow for his services to the industry, and confidence was expressed in him for future guidance. Resolutions on the lines of Mr. Goodfellow’s' suggestions were . adopted, including the suggestion that the Government should call a conference to include the ablest men representative of all interests in the community with the object of exploring ways and means of minimising hardship and obtaining a return to national prosperity.