MEAT QUOTA

Timaru Herald, Volume CXXXIX, Issue 20057, 14 March 1935, Page 6

MEAT QUOTA

KILLING RESTRICTIONS OPPOSED

MEETING OF PRODUCERS

“That in the opinion of this meeting of South Canterbury producers of fat stock no adequate reason has yet been shown for the unreasonable restrictions placed upon the killing operations of Thomas Borthwick and Sons (Australasia) Limited; that this meeting is satisfied that the removal of the restrictions will be in the best interests of the producers and the general public, and requests the Minister of Agriculture to reconsider his decision.”

By a majority vote the foregoing resolution was carried at a meeting held in the Scottish Hall yesterday to discuss the question. There was an attendance of about 80, but all present were not producers. Mr H. M. Whatman, of Waimate, was voted to the chair, and associated with him on the stage were Messrs James Begg, of Dunedin, a member of the New Zealand Meat Producers’ Board. Mr John Trotter, of Fairlie, a member of the Electoral Committee of the New Zealand Meat Producers’ Board, and Mr J. G. Ruddenklau, of Waimate, who convened the meeting.

The chairman explained that the meeting had been convened by Mr Ruddenklau in association with several South Canterbury farmers to discuss the restriction placed on Thomas Borthwick and Sons and to take any action that was deemed advisable. He desired to make it clear that Borthwick and Sons had nothing to do with that or any other meeting, or had it incited farmers in the matter. He apologised for the absence of the Hop. John Bitchener, M.P., Minister of Public Works, Mr T. D. Burneet, M.P. for Temuka, and Mr H. D. Acland, a member of the New Zealand Meat Producers’ Board. It was fortunate that Mr Begg had been able to attend. The chairman said that it was not for him to suggest anything in connection with the matter, but he thought it only fitting to say that many farmers viewed with great apprehension the restrictions that had been placed on Borthwicks in that these had a tendency to interfere with competition. Borthwicks had set the price for some time and no other company had challenged them, and \'L the restrictions were allowed to continue the farmers would receive a smaller price for their produce. Farmers had felt the dry season and the difficult times during the last few years, and they did not want any further handicaps. If Borthwicks were out- of the market the farmers were certainly going to be the losers. In Canterbury producers had to depend on reasonable competition to assure them good prices. That was their only safeguard. Some would claim that Borthwicks could be allowed to go on killing providing they did not freeze in their own works, but that was going to cost them money, and it was the farmers who had to stand up to that loss no matter what it might be. u nvener’s Address Mr Ruddenklau said that early in February this year he received word that a restriction had been placed on the killing operations of Thomas Borthwick and Sons, Ltd., at their Belfast works. This restriction was imposed upon Borthwicks by the Minister of Agriculture by virtue of the powers conferred upon him by the Slaughtering and Inspection Amendment Act of 1934. By that Act the Minister, acting upon the recommendation of the Meat Export Control Board could fix the maximum number of stock that might be killed in any works during any stated period. In this case Borthwicks, who had been slaughtering on an average 750,000 head of sheep and lambs a season, taken wer the last three seasons, had had their quota for this season reduced to 620,000, a reduction of 17.3 per cent. On the 14th of each month they were advised of the number of sheep they would be allowed to kill during the following month. No such restriction had been placed upon any other company operating in New Zealand. The Minister himself had admitted this and any statements to the contrary were untrue. Previous Meetings Mr Ruddenklau said that in the opinion of a large number of producers of fat stock in South Canterbury, the placing of this restriction on one firm only was, on the face of it, unreasonable and unjust, and a meeting was held in Timaru on February 12. This meeting was convened by Mr T. D. Burnett, M.P., and it was followed by a meeting, convened by the speaker, and held m Waimate on Saturday, February 16. At this meeting more than 60 Waimate County farmers were present, ?nd a resolution was passed protesting against the Minister’s action and calling upon him to remove the restriction. About the same time, a petition was circulated in the Waimate district, and was forwarded to the Minister. The two copies of this petition circulated in the Waimate County contained the signatures of more than 200 farmers, owning among them nearly 500,000 sheep. The total number of sheep in the County for 1931 was 669,644 sheep—so that it was obvious that the great majority of producers in that County felt deeply dissatisfied with the Minister’s action. In addition other petitions had been circulated in Timaru and Temuka districts, and had oeen signed by 142 farmers, owning 163,000 sheep. The result of these petitions had been disappointing, in that the only concession granted had been that, the Minister had added 10,000 to Borthwicks’ quota for this month, with the stipulation that these were to be Merino wethers first, and old ewes next. In the opinion of a large number of producers no satisfactory reason has yet been given for the imposition of the restrictions. It had been felt that the matter was too important to let drop at this stage, and that meet mg had been convened in order that producers from all quarters of South Canterbury might have a further opportunity of discussing it, and again making a protest to the Minister. The producers felt that their interests have been well served under the system of unrestricted competition that had been in force in the past, and felt that nothing which has so far been said by the Minister in explanation of his action had in any way justified it. “The Meat Trust Bogey” “The Meat Trust is the bogey that Is held up to frighten the producer,” continued Mr Ruddenklau. “I shall quote some figures to show you how little foundation there is for the wild talk about Trusts. The Minister of Agriculture has admitted that the report that restriction have been placed on other freezing companies is untrue. In a report in a Christchurch newspaper of February 18, he stated that other works were not restricted, because they were not threatening the extinction of similar concerns. He must therefore hold the view that Borthwicks are threatening the other companies with extinction.” The following figures were interesting. (1) Borthwicks

percentages of South Island killings:— 1930 16.06 1931 18.86 1932 14.37 1933 14.73 1934 14.55 Average, 15.63 per cent. (2) Percentage Of the average output of the freezing companies operating in Canterbury from 1928-29 to 1932-33: — N.Z. Refrigerating Coy. .. 30.53 Canterbury Frozen Meat Coy. 37.49 Borthwicks 22.25 N.Z. Sheep Farmers .. .. 9.71 Average, 100 per cent. “A concern which has handled under 16 per cent, of the South Island output, and a little over 22 per cent, of the Canterbury output, can hardly be classed as a Trust,” he said. The suggestion too that Borthwicks were endangering the existence of other companies was ridiculous, when one came to consider the position of the other South Island companies, their outputs and their profits during the last season or two. These were as follows:

The Long View “We are asked to take the long view of this matter, as much as to say, that if Borthwicks are not now a menace, they will be before long, if they are not suppressed,” continued Mr Ruddenklau.

“Actually the percentage of the South Island’s output shows no increase, the output for the last three years being under the average taken for the last five years.” From any figures available, there was no reason to draw the inference that Borthwicks were obtaining control of the situation. In spite of the alleged Meat Trust, the N.Z. Refrigerating Coy’s, profit rose from £79.994 in 1933. to £90,953 in 1934. The profit of the Canterbury Frozen Meat Company rose from £39,587 in 1933, to £47,714 in 1934. If Borthwicks were in fact a Trust, there is statutory authority in the Commercial Trust Act to deal with them. “Whatever the Minister’s reasons, we maintain that no statement so far made, has removed from the minds of producers the feeling that an unfair restriction has been placed upon the operations of a firm which has in the past efficiently handled a great deal of Canterbury meat, and has by open competition helped to maintain the level of prices for the producer. It is hoped that after the whole matter has been fully discussed a further appeal to the Minister will result in the present unreasonable restriction being removed.” The motion was proposed by Mr Forbes Wallace of Waimate, and seconuded by Mr J. Matheson, of Waimate. Caused Board Concern. Mr Begg expressed pleasure at the opportunity of being present, and said that while he came from Dunedin he did not consider himself to be Otago’s representative on the Board, but liked to believe that all members of the Board were there to conserve the interests of producers generally. “This trouble in Canterbury had caused us concern for some time,” said Mr Begg, who explained that the idea of restrictions was not a bombshell that had been dropped in the country. If the Minister had said that restrictions had not been imposed before he must have been misinformed as restrictions had been in evidence for years. Fletchers in Auckland had been restricted to a daily kill and before the chain system came into vogue restrictions were imposed on practically all concerns on the number of hooks that could be used. The policy had not been altered in any way. “I am making the statement quite deliberately that restrictions on works are not a new thing,” said Mr Begg, who added that whether restrictions were right or wrong was another question, and things in favour could be said on both sides. It was, however, a very wide question. Borthwicks were a very efficient firm, and he understood had well and economically conducted works. It was no good quoting what Borthwicks’ percentage of stock was outside the South Island, but there was no doubt that in Canterbury their stock had increased very largely. Their killing had, in fact, reached a third of the whole of the Canterbury output. In the province there were seven works and if one received a third of the killings the others were starved. Producers required all the works at the peak of the season, and if some of the works were starved they could not freeze cheaply and the present smooth running would not be apparent. He was not claiming that Borthwicks were a Trust, but they obtained over 20 per cent, of the killings in the North Island and 15 per cent, in the South Island. If they secured any more business they might develop into a Trust. He was a firm believer in freedom of competition, but he could not shut his eyes to what freedom in the meat business had led to in other countries. If South Canterbury producers had their lambs in Buenos Aires or Flemington in Australia they would not be receiving the price that was current to-day. Voices: Hear, hear.

Mr Begg explained that the Minister of Agriculture did not close the works, and Borthwicks could have spread their quota over a month if they had liked. In Buenos Aires and at Flemington the big meat companies controlled 90 per cent, of the output, and farmers’ concerns controlled 10 per cent, to nothing. There was no competition in those countries and lower prices were the result. The Meat Board was going to do everything in its power to prevent that sort of thing in New Zealand. There never had been unrestricted competition in Canterbury. The meat works were all protected and licensed, and if unrestricted competition arose the works could be outed in six months by two or three overseas interests. “Do you mean by unrestricted competition that Armours and Swifts should be allowed to open works where they like? Would you like them to do that? I do not think so,” said Mr Begg, who emphasised that the Meat Board was operating in the interests of growers now and in the years to come. The percentage of Borthwick’s killings in the South Island was beside the pcfcVß. The percentage in Crnterbury and not in the South Island was the big thing, and that percentage was in the neighbourhood of 30 per cent. The restrictions that had been imposed were not .particularly hard. Up to February 15 Borthwicks had killed 80,000 more stock than during the previous year. It was the policy of the Meat Board to maintain an open door in New Zealand and England, and there was nothing to prevent anyone from freezing and shipping produce to England and selling it there on a competitive market. If Borthwicks had been giving producers a little more

in price they must have an outlet for their purchases. The more one Company gained a monopoly the higher it was able to pay producers, but the time would come when growers would not receive this higher price. Alarm in Britain Mr Begg explained that there was a considerable amount of alarm amongst retailers in Britain concerning the steady advance of outside interests, the opinion being that if big interests secured a grip there would not be an open market in London. Any idea that the Meat Board favoured the local companies against overseas companies was not justified. Overseas companies had received a fair spin and controlled a large part of New Zealand’s exports, and the mere fact that they did that showed that it paid the companies to operate here and that restrictions did not materially interfere with the output they secured. There was a fall in r the price of lamb when Borthwicks 'closed down their works, and Borthwicks in the past usually followed the trend of the London market. The Meat Board had acted solely in consideration’ of growers of fat stock in New Zealand; there was no favour for any one works, the growers’ interests being paramount. The Board, however, was not infallible and was likely to make mistakes, but it was acting in the immediate and ultimate interests of the producers of the country. The chairman said that it appeared vitally necessary that the meeting should understand thoroughly what the resolution meant. It did not go so far as Mr Begg insinuated. No farmer in the hall would ask for free and unrestricted competition. They recognised the danger of trusts and combines, and agreed that the Minister should have the right of licensing. Confidence in Board Confidence in the ability of the Meat Board to handle the position was expressed by Mr B. E. H. Tripp, who said that the. Board was doing its best to 1 work in the interests of producers. He moved an amendment “That the matter be left in the hands of the Meat Board.” Mr Tripp said that he had carefully observed marketing when he was in England, and he was quite satisfied that the Board was doing its work well. “I am sure that the Board does not make many mistakes,” said Mr Trotter in seconding the amendment. As a member of the Electoral Committee for some years he considered that the Board had done a tremendous lot for farmers who would never have been able to put their meat on the market as they had done without the assistance of the Board. The Board had tried in every way to conserve the interests of farmers. To him it seamed very difficult to combat the problem before the meeting as a farmer was inclined to take the bigger money offered for his stock, and the trouble to his mind was caused to place the Board in a bad light. The extra price Borthwicks was paying might be a good thing but it had to be realised that the Board was necessary to keep farmers in order. “We put up works in the North Island and the farmers deserted them for an extra farthing,” said Mr Trotter, who considered that the Board was very near right in its outlook at present. A voice: Who is responsible for fixing the weekly price of lamb? The chairman: Borthwicks have done so for years and the other works have fallen in behind. Speaking in favour of the amendment, Mr W. T. Ritchie said that although some speakers had been very resentful of the Minister’s action there was no doubt that what they had to guard against in this country was control by one interest or section of interests of the meat trade. Borthwicks had fixed the price at 7iid per lb for prime grades and the local companies were giving 71 per lb for the same grades. Taking the local price at 71d per lb the corresponding ex-store price at London was up to 361 b 7 3-Bd, 361 b to 421 b 73d and 42ib to 481 b 7.44 d. The latest quotations were 6 7-Bd, 6 7-8 d and 6§d respectively. The companies based their prices on the London market, and if anyone dould tell him how Borthwicks were operating economically he would like to hear it. Borthwicks were forcing up the price in South Canterbury and it would be only a matter of time, if there was unrestricted killing, before the local companies must go *to the wall. “I wall leave it to you to judge what would happen then,” added Mr Ritchie. In Victoria during 1933 the Co-operative Freezing Companies killed 16 per cent, of the stock, leaving 34 per cent, to overseas interests. In 1934, .the co-operative concerns killed 9 per cent, and outside interests 91 per cent, and everyone knew what was happening over there. It was only a matter of time before outside interests would have complete control in Australia as was the case in the Argentine. If that position came about in New Zealand producers were going to get only what was offered them and there would not be the opportunity to ship that there was now. The trust business was not a bogey. It was a very definite danger to the country and the fact that the Board had taken the steps it had, showed definitely that the Board saw the danger. “The local farmer, with all due respect to him, does not see much further than his nose,” said Mr Ritchie. “If he sees a 3d or 3d he immediately jumps at it. He does want to look ahead and see that unrestriction will kill all competition entirely.” Mr Wallace said he could see quite easily that there were many against the resolution. In his opinion Mr Begg had been most unconvincing. Voices: No. No. Mr Wallace: Mr Begg said that Borthwicks were not a trust. He admitted that. Mr Begg: I said that I had no knowledge of Borthwicks being a trust. Ahead of the Times Mr Wallace said that Mr Begg had assumed that Borthwicks had 15 per cent, of the killings in the South Island, and a third of the killings in Canterbury. If Borthwicks withdrew operations in other parts it was open to other companies to operate in the other provinces. There was no analogy between Borthwicks and the people who obtained 90 per cent, of the killings in the Argentine. He quite believed that the Meat Board was trying to do its best in the interests of producers, but. in his opinion that Board was 10 years ahead of the times. The producers wanted the increase now. and if they could get it for the next 10 years, the Board could then, if necessary, and the other companies were not making profits, apply the screw. With all due respects to Messrs Tripp and Ritchie he considered that they had spoken from the point of view of shareholders and not from the point of view of producers. The speaker was a shareholder in a meat company, but he considered his best dividend was an increased price for his lambs. If Borthwicks, who operated one works economically, could give the producers more for their lambs that was not the fault of the producers. He considered that the restrictions should be removed to allow the farmers to get all they could from Borthwicks and then the Meat Board could, if necessary, get the law to work to put the stopper on. Mr W. H. Orbell: We did not hear how much profit Borthwicks made during the last year? The chairman: Borthwicks is a private company and I understand that its balance-sheets are not made available. Mr Orbell: Well, do you consider it

fair to compare the profits of other companies? I certainly do not think it is fair. It is rotten. Continuing, Mr Orbell asked if the meeting thought that the people of South Canterbury were prepared to send all their stock to Christchurch to be shipped from there. It would mean the closing of Timaru harbour, and the ratepayers would have to meet the loans. “It will also starve the local workers and I say it is wrong,” said Mr Orbell with emphasis. Mr Ritchie: I would just like to take this opportunity of explaining that I personally have not the slightest interest in any freezing company. Mr Matheson said that Mr Ritchie had remarked earlier that the farmers of South Canterbury could not see past their nose. It was a pity if he judged everyone else on his own outlook Just as the amendment was being put a member of the audience raised an objection to all present voting. He considered that it was a producers' meeting, and only producers were entitled to vote. The amendment was lost, only 14 voting in favour, and the motion was carried with the supporters of the amendment dissenting. BOARD'S ACTION ENDORSED By Telegraph—Pres* Association CHRISTCHURCH, March 13. Approval of the recommendation of the New Zealand Meat Producers Board to the Minister of Agriculture that the Canterbury killings of Thos. Borthwick and Sons (Australasia) Ltd., be restricted, was expressed by resolution carried at a representative gathering of farmers held to-day. Explanations of the Board’s policy yfere given by Mr T. A. Duncan, the acting chairman of the Board, and Mr H. D. Acland, a producers’ representative on the Board. A meeting of the committee of the Canterbury Agricultural and Pastoral Association carried the following resolution:—“That this committee is of the opinion that the action of the New Zealand Meat Producers Board and Government in providing for quotas covering the slaughtering of stock is in the best interests of the Dominion meat producers. The committee congratulates the Board on taking the long view of the problem, and is of the opinion that the restriction now being exercised will result in the retention of the control of the industry remaining in the hands of the Dominion producers.”

Approx. Output Profit Nelson Freez. .Co 1933 £ 1934 £ Stoke .. .. 45,000 2,460 3,111 N.Z. Refrig. Co. Picton .. Islington Smithfield .. 150,000 440,000 360,000 79,994 90,953 Burnside C.F.M. Co. Belfast .. 380,000 285,000 39,587 47,714 Fairfield Pareora .. N. Cant. F. Co. Kaiapoi .. 325.000 375,000 255,000 4.220 4,285 Borthwicks. Belfast .. 750.000 Not available Waitaki F. Co. Pukeuri . .. 370,000 17,038 S. Otago F. Co. Finegand 300,000 11,143 14,202 S’land F.M. Co. Makarewa & Mataura 730,000 74.933 51,572 Ocean B. F. Co. Bluff .. .. 450,000 Not available