DAIRY PRODUCE

Dominion, Volume 13, Issue 231, 24 June 1920, Page 6

DAIRY PRODUCE

CO-OPERATIVE MARKETING

SCHEME

PROPOSAL TO PALMERSTON

CONFERENCE

LINKING UP WITH ENGLISH SOCIETY

By Telegraph-Special Boportcr. Palmerston North, June 23. ' ■ The important, question of adopting a system of co-operative marketing was exhaustively discussed hero to-day by the largest meeting of producers of the Doniinioib on record. The gathering w-as held under the auspices of the National Dairy Association of New Zealand, and was presided over by Mr. A. Morton, chairman of directors of that body. The attendance numbered close on five hundred. Scheme Outlined. In introducing tho subject, Mr. Morton said that the gathering was the outcomo of a resolution passed at last year s annual meeting of the association, instructing the executive to devise some scheme for marketing produce on lines different from those hitherto followed. The executive had accordingly got in touch with its London office, and the scheme to be placed before the meeting' that day had been evolved by the wsooiation s London representative (Mr. Mlison). Ihe dairy producers of tie Dominion had carried on their co-operation right up to the point when their produce left the shores of New' Zealand. At ihat stage they had placed their produce in the hands of others and accepted the Teturn forthcomin". Eealising the disadvantages ob'triining under this system, -producers throughout tho length and breadth; of the Dominion considered it a desira>blo thing for them to strive to evolve some cooperative system which! would bring them into closer touch with tie consumer and lessen the number of those who at present stood between producer and consumer. • v

Identity of Produce Lost. < They were not aware, until they sold the produce to the Imperial Government, exactly what it cost to put their produce in the hands of the consumers, lhey had reason to believe that a great deal of the produce did not reach the con.sumcr,' but got 'into' the hands ,of tho blonder, and that the identity of New, Zealand's produce was lost. A voice: Shame I . . That was not in the best interests of the producer, said Mr. Morton. They wanted to be able to sell their article on its merits, so that the purchaser would Know that he was getting a good article. During his investigations, Mr. EUison got into touch with the Co-opem-tivo Wliolesalo Society of Great Britain. Speaking in regard to the magnitude of tnis co-operative society, , Mr. Morton said that its ramifications were well known and extensive. . It could not be disputed that it represented the great body of tho consuming population of the United Kingdom. It could not be denied that tho C.W.S. was a large buyer of buttor and cheese, and was a very large purchaser of Danish butter. Danish butter was the .highest-priced butter in tho market. It had beon said by opponents of tho proposal before the meeting that tho. sole aim of tho C.W.S. was to sell—and therefore to buy—as cheaply as possible' to its customers. ■ If this was so, how came it that they dealt so very largely in Danish butter, the high-est-priced-of all butters.? Our produce had to puss' through a large, number of hands before it reached'the consumer. It had been said 'that tho importers favoured decontrol. • Hofc camp it, then, that they: had recently, unsuccessfully endeavoured to obtain a charter from tho Imperial Government giving them the sole right to control the importation and sale of New Zealand produce? Such a scheme the best 1 interests of the producer, thowev'er much it was in tho interest of importers.

Details of the Scheme, . Mr.. Morton then outlined the scheme of co-operative marketing which the National Dairy Associatioifc l .commended to 'producers. Brieiiy put'; it was for the iorniatiou in New Zealand of a company representative of the producers, formed on the basis of butter-fat supplied. That company was to take up an equar holding of shares with the Co-operative Wholesale Society-of Great Britain in * third body to bo created in the shape, of a board of control located in London. This board would consist of an equal number of representatives of the producers of New Zealand and the Co-onern-tive Wholesale.Society of Great Britain. The whole matter of fixing i the price of produce would bo delegated by the board to a committee of tho board. On this committee New Zealand, producers would have an absolute majority of the representatives. The financing of the sale of our produce would be done by the'board through the medium, of CW.S. and the N.Z. Company. Finance would be ns- , sured, to the New Zealand dairy companies by the establishment of letters of credit with various banks doing business in Now Zealand. The Board of Control would sell tho produce at a price fixed' by the committee. A certain percentage would be charged for selling, and any surplus would bo the property of the English company, ami would be. divided between the New Zealand company and the CW.S. J On Sound' Lines.

... The matter had been laid before the producers at meetings throughout New Zealand, and it ,had been made quite clear that they had noi fault to find with the individuals who had been carrying on the export system. It was the system which they condemned. At every meeting held to consider the proposition unanimous resolutions were pass- ( ed in its favour. The proposal was on pound lines. The 'proposed connection with the CW.S. would be extremely valuable as putting the producer in direct touch with the English consumer. Air.' Ellison then addressed'tho meeting on tho subject. He said that tho, war having broken down all former connections, the way was left open at the termination of tho commandeer for something new in the direction outlined. During tho war a number of New Zealand soldiere in ■ London had from timo to time recommended to his notice tho value of 'establishing some connection with the CW.S., which body offered such a very valuable ami extensive outlet for dairy produce; He got'into communication' with tho CW.S., and ultimately they come to the conclusion that it ought to lie possiblo for the co-opera-tive New Zealand producers to link up with tho Co-operative Wholesale Society of England with a view to mu-, tiial benefit and protection. ' Straight and Honest, Mr. Ellison said ttoit ho had been mot by representatives of the CW.S.' in a very frank manner. He had found them straight and honest, wittil no personal aims or objects to servo. In fixing the price, the producers would be always guided by tho market conditions and tho prices ruling for produce of a similar kind from other countries. They wcro not proposing to create a. monopoly or trust, the impossibility of which was duo to the fact that New Zealand had only* a small proportion (10 per cent, in the case of butter) of the r.roduce entering the United Kingdom. The proposal to go in for co-operativo marketing was no new proposition, and might, vitl'i advantage bo applied to a variety of New Zealand products. The Australian States bad, ho believed, now arrived at a scheme for the handling and disposal of their produce on Now Zealand markets. Ho had also discussed tlxe, matter with Siberian representatives in Lovidon, and they had evinced great interest and keen sympathy in the formation of u scheme of this nature, and were very keen on linking up with New Zealand in the matter. The' CW.S., represented a very large body of consumers. There were some people who believed ltat> the best system of all would be for. New Zealand producers to open their own floor in London. He 'believed -that out of what they wore now proposing something of that nature would eventually o'volye. but tlie timo for this had not yet arrived. Meanwhile the offer rf.thn CW.S. was one that had never before boon made to any other British Dominion, The offer was confined to New Zealand. The Australian producers, who would jump at

the offer if it were mado to them, were going to open their own marketing floor in London. The C'.W.S. was prepared to take n large proportion of New Zealand oheeso and possibly tho whole of our butter. An Important Feature, Mr. Ellison declared that an important feature of tho scheme was that the C.W.S. was prepared to sell New Zealand butter as the produce of New Zealand. That in itself was a tremendous advantage. At present the shops simply sold butter at so much per pound, and cheese was sold in ihe si.me way. The C.W.S. was prepared to put the stuff on its counters labelled as Zealand produce. The C.W.S. ■ was proposing to find 50 per cent, of the necessary tapital to finance the marketing of our produce. There was no proposal to consign produce to the society. Our interests would bo in the hands of a board in London The society was practically prepared t» allow producers to fix their own prices. We were not giving the society an option over our produce; if we could get a better price, either in London or elsewhere, we would bo at liberty to accept it. If the producers evinced a desiro to go in for the scheme, ample opportunity would be given them _of reviewing the whole, proposition with a view to modifying it if deemed necessary. Mr, Ellison said that ho felt it would be a calamity to tho dairying industry of tho Dominion if they failed to tako advantage of tho offer of tho Co-opera-tive Wholesale Society. Opposition to Scheme. At thS invitation of the chairman representatives' of export houses addressed the meeting and put their side of tho case.

Mr. Pacey (Joseph Nathan and Co.) said that Air. ' Ellison had made the mistake of thinking that co-opdration was a shibboleth. Tho interests of cooperative producers and co-operativo con. sumere -were opposed just as much as proprietary interests were opposed to their consumers' interest. Ho held that the societies in England were composed of the Radical interest and were not on tho same plane as co-operative interests in New Zealand. Their aim wag to supply cheap food to their consumers. In Now Zealand we occupied a unique position in that we 'did not Lave to carry over from one season to another for our butter on the English market. Our clientele at present included som» of tho co-operative societies in the North of England and numbered about 160,000 retailers. Now came a proposition to turn down the system that had been operating for 30 years. He drew attention to the coming of a financial crisis and the danger of making experiments. He pointed out that the company, if formed, would be composed of ultra-Tadical Labourites on the English side and Conservatives on this side and that they were not bound to buy our produce if they could get cheaper produce later on. Let us go in to our own floor at once if thought advisable and not "foul our nest" by going against the'people who would be our best customers. It was all right for co-opera-tive societies. • They would dominate the position, The proposition to establish our own floor was bad enough, but this was worse. He had made a proposition to establish a committee in London to concentrate our produce that would be workable if they did not bring in outside'interests. If' they forced the lamb (represented by the New Zealand producers) to lie down with- the lion, they would find that the lamb would soon bs inside the lion. (Applauso and laughter.) An Inopportune Time. Mr. 'Buckrjdge (Lane and Co.) said the seemed to be in tho nature of a revoT.ution, being l placed before tho country at an inopportune time when tho nuances of the country were not stable. By allying themselves to theso people they ran a ehanee of alienating the other, 160,000 retailers with whom they had been connected in tho past. The 150,000 shops controlled by the society 1 were not all produco shons. When they entered into a partnership they should find out all thoy couf.d about their partHe had gathered information on the subject. Ho ihad endeavoured at one time to get representatives of the society to come out to New' .Zealand. They had told him that the New Zealand business wnjs no good to them, as it would be their duty to get the 'highest price they could get for the New Zealand producer. Some in the room had tried tho society, but hod found that its means of distribution were not suitable to them. As chairman of directors of the New .Zealand Co-operative Association, he had some years later approached the society,, and .in the end thoy had given ihim tho same answer as they had given him before." They had said that Now Zealand butter was not suitable for their purposes, and that New Zealand butter wouCd not sell to their public. (Cries of "Hot!'.') It might oe rot, but that was what they said. There was still a prejudice ajiainst New Zealand butter na against Danish butter. He, did not think 'it was a. sane proposal to take away the market prejudiced, in favour of New Zealand butter and put it on e. market which was prejudiced against it. ' Mr. Turner said that if the C.W.S. and Scottish C.W.S. had been the institutions it was claimed they were, would not the producers at their very doors have taken advantage of, the opportunity of associating with them? Tho Irish farmer had found that, the C.W.S. did not afford the means of distribution desired. Th.B Missing Link. Mr.'iW. D. Powdretf. summed up strongly in favour of the proposnl. The arguments of the exporters were largely discounted by the fact that they were fightingt a life and death struggle, and they (the expprters) knew it. There was a missing link between New Zealand producers and Home consumers, and cooperative marketing would supply this. The farmers of New Zealand were strong business men. Thev had never failed yet in any co-opera'tive venture, and they were not going to fail. Mr. 1. W. ißoblr-rtson, representing CCements and Son, replied on behalf of tho exporters, branding the scheme as an absolutely risky Socialistic experiment. The scheme was wrapped up in tho old, worn-out cloak of the wickedness of Tooley Street. Did they realise what the co-operative scheme meant? It meant aligning themselves with the British Labour movement. (Cries of "Hear, hear " and "Why not?") ,

A score or so of other sneakers followed, and after exhaustive debute, extending well into the night, Mr. W. D. Powdreir moved a recommendation Hint immediate steps should be taken to form a company in New Zfcilnnd to co-opernte with the Co-operative Wholesale Society iV marketing New Zealand produce in Great Britain.

Mr. MTnrkne seconded the motion. The chairman 6nid that it did not mntter if the meeting carriedjjio motion or not the company would still be proceeded with. ■-.■•.

The resolution was carried without dissent.

_ A subsequent meeting of those snpportine ;rhe schemo to consider mntfors of detail in connection with preliminaries for starting the company was hold after the conference.