THE BACON TRADE.

Pukekohe & Waiuku Times, Volume 5, Issue 233, 8 December 1916, Page 4

THE BACON TRADE.

The Co-operative Movement

A representative gathering; of dairy farmers was held in the Waiuku Public Hall on Wednesday, 29th November, for the purpose of meeting with representatives of the newly-formed New Zealand Farmers' Co-o t erative Bacon and Meat ' Packing Company. Mr H. 0. ( Mellsop occupied the chair. Mr 8. C. Baron, the General Manager of the Company, pointed out that the new Company was composed of several of the bacon inter ests in the North Island, and had been formed for the purpose of bringing about an improvement in the industry. In the pa«t certain conditions had obtained which did i not make for the advancement of the bacon curicg business As a matter of fact, these had proved a positive hinderance, and in consequenca the industry was not occupying that position which it should hold. It was, therefore, only natural that those engaged in the busi- ' ness should look for some measure of relief and endeavour to bring about an improvement in the interests of the producer. For some time past there had been two e'e- > ments handling the business, namely, the proprietary and the c )-operative companies, and just as it is impossible to get oil and water to mix soit was unreasonable to think that the proprietary companies would work in with the co-operative concerns, and vice versa. The proprietary companies had built up their good business at considerable expense and it was not at all likely that they would give away the business without a struggle. On the other hand the co-operative companies, having the interest of the producer to look after, would not give way to the proprietary concerns. It was recognised on both sides that a great deal of wcrk had been put into the industry, but that the returns were not commensurate with the energy which the running of the business called for and the amount of capital involved. There was a great deal of unnecessary expense incurred in the buying end of the business and in many cases unnecessary duplication and overlapping. The same conditions applied to the selling end, but with far worse results, and in many instances the grower has had to suffer to the extent of a id per pound by reason of this want of economy in working; but between these two ends the Bacon Curing Companies have had to contend with difficulties which might be characterised of an intei mediate nature. These could not well be eliminated and what cannot be cured must bo endured, but it was readily recognised that a considerable improvement could be made in both the buying and selling ends of the business, and it was pointed out that those managing the business would be lacking in their duty to the farmers if they did not endeavour to bring about some improvement. To that end a meeting of the representatives of the various companies was held in May last and there was almost unanimity of opinion expressed that some steps would have to be taken to bring about improved conditions. It was also agreed that the only way to effect any improvement was to merge the various interests into one. But the question was how to effect the amalgamation of interests. As already mentioned there was the difficulty of merging the Proprietary and Cooperative concerns. It was generally recognised that a very considerable sum of money is required in the running of a bacon business. Messrs Dimock and Company hal subscribed capital of £90,000 odd, of which approximately £74,000 was paid in actual cash. That amount did not, in any way whatever, represent goodwill or watered stock. The Waikato Farmers' Co-operative Company had a subscribed capital of £11,490 ana the Taranaki Ventures had £18,803. The difficulty that confronted Dimock and Company's shareholders wa3 this :- It was arranged that the directorship of the new company should consist of ten to be extended to fifteen when required; that the shareholders of Dimock and Company should have four representatives only on the Board and that the shares of Dimock and Company should ba created into preference shares. The shareholders of Dimock and Company would vote only for those shareholdrs belonging to the preference shares, but they would have no voice whatever in the election of six remaining directors. These woidd be voted in by the farmers' shareholders. Now with so large a sum of money at stake the shareholders of Dimock and Company wore confronted with this difficulty, that the farmers, being in the majority on the Board, might endeavour to manage the Farmers' Company in such a way that no profits would be available wherewith to pay a dividend, as it might well be thought that a farmer, in the first instance, would receive such a price for his pigs as to prevont the possibility of any surplus being available. A give and take policy was adopted and it was arranged that Messrs Dimock and Company's shares should be of a preferential nature bearing interest at the rate of G per cent. It was then explained that the first call ou the profits of the Company would be the payment of this dividend; then a bonus would be paid to suppliers. This arrangement proved satisfactory so far as the investment and payment of dividends was concerned. The next point upon which the various interests had to agree was the valuation of the tangible assets. This matter was fully gone into and upon a complete investigatiou of experts and those well versed in the business it was showu that the various Companies had assets in excess of their book valuations to the extent of £15,000. This surplus was obtained by reason of heavy depreciation which had been made from time to time. It was pointed out that the new company had come into vogue on the Ist October ; that the nominal capital is £200,01)0; subscribed capital at that date £121,011, that the paid capital was £'.t|,i;o4, These figures will, of course, be altering from day to day, as since the Ist October it was pointed out that no less than approximately J,OOO

shares bad bee 1 applied for and this number would be very considerably increase 1 in the near fut ue as there was a very widespread interest on the part of faruipn throughout the whole of the Island.

After the working of the new concern had been fully explained thequestion of the benefits derivable by tb.9 individual farmer w»s gone into. It was pointed out that in the buying end alone there would be sufficient savings effected to enable the Company to pay out a reasonable bonus to the suppliers and that even greater advantages could be obtained in the haudling act. It wag shown that in order to make the business a successful venture it was nec°ssary for tie farmers to co-operate and work closely together in order that the pork industry might be concen trated with as close a control as possible. With the new venture the export of pork was quite a possibility. Then very considerable savings would be effected in the working up of the by products. Hitherto it did not pay any one firm sufficiently to instal the machinery necessary to work up the by-products to the best advantage. That difficulty would now be got over as new machinery was being installed ; extensive alterations are being made at Frankton Junction, and the farmer by going into this venture could make sure that his pork will go through the best selling organisation that there is available for him in Now Zealand. Reference has been made from time to time to the operations of the meat trust It well be that the farmer in this country has no control over his selling in the London market, but if he will only be loyal to the Farmers' Company be can handle pork products to the very best advantage. The venture offers to him curiug works over prac tic illy the whole of the North Island, while the selling organisation would be in his own hands. It was punted out that the individual farmer would be required to take up 20 shares in order to qualify him for the receipt of a bonus. In the case of a dairy company the basis of entry was one share to each pound of cheese produced throughout the year, or two shares to every pound of butter produced. The Company welcomed either the individual or the dairy eouipauy, whichever was mo3t suitable to the convenience of different localities.

Mr Joseph Barugh, the chairman of the Farmers' Auctioneering Company, Hamilton, and a director of the Freezing and Bacoa Company, also addressed the meeting. He pointed out the great advantages that had been obtained by running the Freezing Company in Auckland as a co-operative concern by the farmers, and stated to the growers that it was impossible in the early stages for that company to finance without the aid of outsiders. He also pointed out that the same advantages obtained in regard to the taking over of the auctioneering business in Hamilton. There was no more striking illustration of the success of co-operation than in the Farmers' Auctioneering Company, and Mr Barugh stated that he saw no reason why as great a gucces3 could not be made of the bacon industry. As a matter of fact, he considered that the present offer was one of the very b9st propositions the farmers of the Auckland province had had placed before them The farmers had practically control of a new concern, and a great deal of capital had been found for thorn. He further urged every farmer to go into the venture, and to give it his wholehearted support. The trend of the times was in the direjtion of the farmers' products being handled through co-operative institutions, and it was due to the industry as a whole that every farmer should come forward and give the concern his whole-hearted support. The meeting was then thrown open to questions, and very considerable interest was shown in the new venture by reason of the number of questions that was asked. These wore all explained satisfactorily, and the general opinion was that the farmer could not do better than join in the new venture.