FUTURE OF FLAX

Sun (Auckland), Volume IV, Issue 978, 22 May 1930, Page 8

FUTURE OF FLAX

OVERSEAS INVESTIGATION URGED TO AID THE INDUSTRY The contention that the Government could best aid in the development of the flax industry in New Zealand by financing an investigation into overseas conditions was advanced by Mr. L. W. Holt in a lecture before the Economic Society of Australia and New Zealand at the University last evening. Mr. Holt, who introduced himself as a student interested in the industry, prepared a thesis on the flax industry in New Zealand for a New Zealand University degree examination. Mr. W. H. Cocker presided at the meeting. Mr. Holt referred to the obstacles that had been In the way of the industry since its foundation and dealt with the possible future of flax-grow-ing operations in the Dominion. The industry was hampered by high production costs, the causes of which were several. There were high transport costs owing to the scattered areas where flax was grown; there was insecurity by the private ownership of small tracts of flax-growing land, and then there was the unfortunate fact that certain small mills bad proved ‘‘boom” mills, operating for only a short time. It was thought that the formation of public companies about five years ago would do much to solve those problems following the introduction of large scale operations. There had been, however, unsatisfactory features in the company boom. “I am of the opinion that, in many cases, the main object has been the rewards of successful company promotion and not the development of the industry,” Mr. Holt said. The industry, the lecturer continued, was in a state of depression and its future was doubtful, depending on a number of factors. There was the Question of overseas competition in the growing of Sisal and manila hemp. Labour costs were less in most of the other countries where fibre was produced. There were also to be considered, tariff, the State assistance that the American Government, particularly, was giving the growers, the formation of large combines and the possibility of alternate crops such as coconuts.

Even supposing that, in spite of all those factors, conditions in New Zealand were still favourable to the industry, there was the vital question, within the Dominion, of the rivalry with the dairying Industry in regard to land. As drainage operations made more land available for dairying, the areas available and suitable for the growing of flax became less and the whole question depended on the future of dairying. Mix, Holt advanced a scheme for the ordering of the flax industry, but admitted that there were flaws in it. In fact, it was doubtful whether the Government expenditure required by the scheme would be warranted. The details of the proposal were that the Government should zone flax areas and allot certain tracts to certain mills to eliminate competition. The growers should contract with the millers for a long term, the millers being obliged to pay a fair price. The present exemption of the industry from taxation should be removed and, in its place, the Government should pay a bonus on high grade fibre. The exemption from income tax enjoyed by the flax dealer should be abolished, the lecturer holding that the operations of the dealer were not, in the main, to the advantage of the industry. The bonus mentioned should be paid on a sliding scale, in accordance with overseas prices. Mr. Holt approved of the setting up of the investigating committee recently appointed, which consisted of two representatives of the millers, two representatives of the growers, two scientists and a Government departmental head. He considered, however, that the committee should include an economist as the investigation was being conducted at Government expense and with the apparent assumption that the future of the industry must be safeguarded at all costs.

It was the lecturer’s opinion that the Government could do better by financing an investigation overseas into the important question of whether other countries could force out the New Zealand product. Markets, market methods and the uses of the fibre required investigation. The establishment of a bureau of information overseas would also be of advantage. Reference was made to the appeal made recently to the Government by a deputation representative of most of the millers asking for a Government advance of £4,000 to tide the industry over the winter. It was held that the price of hemp had fallen to £2l a ton, a price lower than production costs and that unless assistance was forthcoming many mills would have to close down, with the result that 400 men would be thrown out of work. The Minister of Lands had offered to lend £4,000 at 5 per cent., secured by the joint and several guarantee of the millers. ‘‘ln my opinion it is like a loan to a friend who is out of work and likely to remain out of work for some time,” added Mr. Holt. “The millers’ case is not strong enough to warrant any advance except as a straight-out advance for unemployment. I consider that it would be better to solve the unemployment question in the flax industry when the men are unemployed.”