Marketing Dairy Produce.

Taranaki Daily News, Volume LVII, Issue 25, 19 June 1914, Page 7

Marketing Dairy Produce.

AX IMBORTAXT CONFERENCE.

PKODUUUW ALIVE TO THEIR

INTERESTS.

(From Our Special Repot tor)

That dairy factory directors ami I those engagel in the'dairying industry generally arc not altogether satisfied wiMi the present conditions of marketing dsiiry produce at Home was evidenced by the very large ami representative gathering (over 350) at Jftilmerston North on Wednesday to discuss] two reports, a majority rnd a minority report, drawn up by the representative committee of North Island dairy companies set up to evolve some practical scheme giving effect to the resolutions carried at the Hawcra meeting, at which some fifty dairy companies were represented. These resolutions were: — "That this meeting of dairy representatives of the North Island of New Zealand desire to express their dissatisfaction with the present methods of marketing their dairy produce, and considi "i that the time is now ripe for dosing some improved scheme, which will Jte the whole of the producers, and establish some plan of control calculated to secure more satisfactory results than at presa.it obtaining," and ''That the policy of Homo, marketing he confined to open consignment and selling." The committee, consisting of eighteen members, reported that they had held several meetings, and ihad given the matter full consideration, as a result of which they fivhmitted a recommendation to the c-fect that there should be a Board of Management in New Zealand and the London Board. The latter would bo salaried representatives, of the dairy companies with, the object of controlling and marketing !New Zealand produce. The board of management would have the appointment and control of the London Board, but would give the latter very large discretionary powers. The board's services would «><? be available for those who wished to use oilier markets than the United Kingdom. The board of government would be elected at an annual meeting of the companies participating in the scheme on a voting power regulated by the output on a ■basis to be arranged. The maximum to be five Votes}, viz., one vote from 1 to 50 tons of butter, two for 51 to 150, three for 151 to 300, four from 301 to COO, and five for 501 tons and over; two tons of cheese to be equivalent to one ton of butter. The constitution of the Board >f Management would be: FTom Taranald (maximum) 4, Auckland 5, Bawkc's Bayand East Coast. 1, and Wellington 3, subject to the representation I being in proportion to the amount of I produce contributed. The London Board to consist of five members, and i the appointment to be for three years. Every compiny to contribute towards the scheme on a tonnage basis, irreipective of whether they consign or sell,', and that thy board will be nrepai'ed to ' make-sales for such companies as might desire to sell. A minimum of £1,000,000 worth of produce should be accorded to the scheme before going fully into the matter. That the factories might consign their their produce through the New Zealand Board of Management to any agent selected by the factorv company, who would agree to consult with the London Board in fixing the minimum price for the time being, and that any produce consigned to an agent in these terms might be .financed' direct through sucili agent. The committee further recommended that a limited liability company be formed, with a nominal capital of not less than £IOO,OOO. divided into 100,000 -hares of £1 e:.ch. the amount to be called up no more than necessary; the share;- to be allocated on a basis of the " output at th'> rate of not less than three shares lor each ton of butter and one and a half shares for each ton of eh?ese. Thoy were also of opinion that if such a company is formed the ques- . iion of financing, against produce shipped through the organisation, can be a] ranged on i, satisfactory basis: The estimated cost of the scheme was set down at £IO,OOO

The minority report, was of opinion that the pr.ipOnal to promote a company with a capital of £IOO,OOO is not desirably at present, and that the interests of the industry would be 'best served by a company with a capital of, fay, £iooo. such company to refrain from trading and other forms of profitmaking, but instructed to work as, follows:

Appoint representatives in London to negotiate and oversee all marketing conditions of dairy produce; negotiate with London agents iificl merchants througli such representation or otherwise for the f removal of all disabilities under which the industry was at present working; I confer with such a gem , and merchants On the question of rates to be charged from time to time for dairy produce, and to take such steps as were necessary and practical to .secure the. observance of such rates, subject to terms and conditions as mav he arranged; schedule the rates obtained by the several agents handling the New Zealand dairy produce and to circulate same with a report on the work of «uch agents amongst members of the company for their guidance in determining the channels for the following season's business; generally to promote the extension and i prosperity of the industry. The meeting was, presided over by Mr A. Morton, who said the gathering was a record one. lie did not think any one eould gainsay that there had been a feeling that they were not getting the treatment on the London market for the disposal of tlir-ir produce that ,thcy went entitled to. There might not bavc been good cau-.e for the whole of it, but thee was. no doubt, for some of it. From time to time, suggestions

had been made for improving the channels for tlie disposal of the produce. | but so fur they bad failed. The Na- j tional Dairy Association iliad tal;en up the matter* but unfortunately bad not obtained the support they were entitled to. Referring to the. report, he said that he did not submit that it was perfection hut it was, at any rate, an honest attempt by the committee to devise something which, ii: their opinion, was practically unanimous in its report, the minority'report representing hut a small .section of the committee. It was gencrallv felt Unit the best lines upon which Xew /(aland produce could he distributed was to m'l up a board or committer on (be lines of the Danish committee, which he had been led to - understand controlled the whole output, and met once a week to lis prices and regulate the supply in accordance wit i the demand. He had little doubt that , the result would be highly sfitis- ' factory to producers, it had been recognised for rears that the quality oi ! New Zealand .butter approached that of the Danish, indeed, they bad been I old by experts that one was- as good as tae other. Tf th: Dane- were, able to ohtsiin the host, prices by organisation.

I then the time was. ripe for New Zealand to do likewise, and living the prices nearly to the level of Danish. The Bame' applied to eheose. It was admit-

jted that its quality was nearly equal \to Canadian, and if they could realise /the same prices it was up to them to do so. lie then discussed Me report at length, pointing out that it only referred to the North Island, foecau'se it was not known if the South Island was coming in to tin: scheme or not. Provi.Mciu was made for tue constitution of the London Board, which was the most important body, because it was to thorn that they looked for the real improvement at that end. The agents on their part might find it advisable to set up an Advisory Board. There should be co-relation between the board and the agents. It was not intended to dis- i •pense with agents or brokers altogether, but one of the principal duties of the i board would be to meet, Fay, weekly. ! and fix the price and endeavor to ''bring agents and brokers into line, so tle.it j they would agree not to sell under the prices fixed by the London Hoard. Tf | the organisation could be carried tint •■ far, they would save its cost ten times ] over, as they would have succeeded in ' getting control of the prices at the London end, which was what they bad never done, tut was what they' bad wanted to do all the time. Provision was also made to meet those companies who were of opinion that they should sell here. Tt was also thought desirable to interfere as little as possible with the consignment methods in votmc, so that factories could sjtill continue to do business with the firms, that had been handling their produce in the past, subject only to f he provision that the firms would be required to come into line as regards the .prices set week by week. One of the principal ideas wasi the formation of a company with a. large capital in order to carry out the proposal as it might be necessary to financially assist some agents when the mnrket was weak, or its stability doubtful. Tt. might also be necessary to finance dairy companies, if at any time it was advisable to hold the, butter in store for a time. They h«d approached some financial heads who expressed a«t>roval o f the scheme, and were prepared to give every assistance. Tt was* absolutely eseiitial to the success of the wliemc that something mus|t rj c Ruling between Jiose enteric j n fo it. It would 'be fatal I m its success if the organisation was started with a promise of fifty companies, and that after liabilities hud bcC" incurred half of these should draw out, and they bad no powe r to prevent this. Cohesion was absolutely necessary. The cost was set down at f 10,000 per ainnum. hut he had little doubt that this could he reduced, as the very outside figure had been put down. He had commented fairly on the report, and did not at that time propose to discuss the minority report. Mr Grey (Lowgarth) seconded the adoption. > Before proceeding to discuss the rc- ' port it was resolved that only producers should take part in the discus- i j sion. During the discussion of this, Mr. Turner remarked that the agents had held an impromptu meeting previously, and had decided not to speak at the meeting; Mr. Paeey (N.Z. Dairy Association) moved as an amendment the adoption of tlte minority report, of which, he said, he had been one of the drafters, He was in entire sympathy with the re- c port which had called the meeting together, as it was generally recognised that things at times might have been better on the London market. Difficulties in the past had been caused mainly by speculating in butter and also by dealing with weak houses, with the result that the market took charge of J itself, and the producers suffered. If j there were sufficient cohesion among j producers to unite, considerable advan- j tage might accrue in the marketing. To adopt the open consignment only would ' be the best means to that end, and some metliod of weeding out the unfit among the agents at Home. He admitted that the scheme outlined by the chairman in a moderate, sane and statesmanlike speech was an honest attempt to solve an important problem, and represented his position. The majority, be argued, were not unanimous regarding the policy, as some advocated the organisation going in for warehouses and selling the butter itself. Others favored the retention of certain agents to do the work under the direction of the Board. Hither scheme would antagonise certain sections of the trade, and the opposition set up would render either alternative unpopular. A hundred thousand pounds would be quite inadequate as a fund for fighting millions. They would, he urged, find no difficulty regarding finance if the

market were buoyant, but it was very different in time of a slack market, if tlio organisation intended to undertake the responsibility of selling, a large capital would be required. If, however, only supervision or control were proposed, nothing like that capital would be required, and it only meant utilising the companies' capital and credit, which could he turned to a much better use. Mr. Pacey said that it was quite clear that the warehouse scheme was impracticable. The. scheme proposed was wrong in fundamental principles, and was therefore doomed to failure. It proposed to perpetuate the errors made by the National Dairy Association in their attempt to solve the problem some years ago, which failed because they consigned to certain agents and so roused the antagonism of others that the 'market broke down deplorably. The formation of the proposed .company would also, he thought, conflict with the interests of farmers by affecting other companies. Mr. Hubbard, in seconding, said that the minority report was supported by over 10,0(10 tons of butter from big factories in the Auckland province, 'Mr. Wise (Ekctahuna) considered the onlv difference between the two reports was in regard to the capitalisation of the company. ilr Dash (Otaraia) referred to the success that an Australian committee on similar lines had achieved.

itr. '.Marx did not claim the proposal to be perfect, and considered that it might oe improved if it were adopted. He considered they should control their 'produce themselves, ami not utilise any Oovernment official, whoever he might be. At present the firms handling' New Zealand butter worked separately, and 'it must prove of immense, beneiit it these all worked on the same lines on prices indicated l>v the London Hoard. They did not wish to make it a trading concern. . Mr. Gibson (Rahotu) was against both schemes, which, he considered, interfered with the channels through which some of the companies were now workin", inasmuch as he did not think all agents would agree to consult with the Loudon Board. He referred at length to the advantages Danish producers possessed, hut affirmed that if New Zealand produced a good article there would be competition for it, He suggested that they should set their minds to counteract food flavors and other dei terrcnts to a good article. He considered the saving would be very problematical, and would be very mue'h of a gamble in future. "Mr. Boddie (Te Kuiti) said dairy organisation was perfect up to the point where the produce was placed on the Home steamer, but there the producer

lost absolute control of it. He would like to see some system for selling butter and cheese here, as was done so satisfactorily in the case of wool. Instead of discussing' details, be suggested that tliey should affirm the general principle and leave a committee to evolve details.

Mr. Lord (Shannon) thought that the National Dairy Association should control the scheme, and so avoid the expense of another Board. . Mr. Marchant (CardiiV) did not agree with either of the reports. He thought that the contemplated £IOO,OOO was going to be too small an amount to all'ect the market. The producer should hold such a margin himself as to entitle him to say that the produce must not be sold below u certain price, Mr. D. L. A. Astbury (Mangatoki) thought that the National Dairy Association should form itself into a limited liability company and so handle the matter. .Many of those present, he said, had no authority for pledging their factories on the question, iloreover, he felt that there was the feeling among some that if several of the factories adopted it those that remained outside would be able to make better kwgains with the buyers. The National Dairy Association should be asked to take up the matter..

Mr. J. B. Corrigan considered that the producer had been gulled quite long I enough, and should now unite in -hia j own interests. It must co9t at least £30,000 for the agents who came round each year to buy their produce. Mr. W. D. Powdrell (Kaupokoirai) said that he was one of the originators of the agitation for the improved marketing conditions. He favored the smaller company because he thought there was a greater chance of it being adopted. Mr. Parsons (N.Z. Dairy Union) thought £IOO,OOO too little. Even if it tost a million it would be a good business proposition, and he suggested that the Government might borrow that amount at 4 per cent., and the factories ) would gladly pay five per cent, for it for the purpose. '■ Mr, Morton, in reply, said that the committee looked forward to the meeting: to make some suggestions. He considered that the minor;+y xaafaly stood fol' the" present conditions, as it I proposed, to appoint someone to do the j work that the National Dairy Association was doing in London now through I ite agent. It made no provision for I control or tor fixing the price. The amendment was then put and lost on the voices, and also on a division, which was called for.

• Considerable discussion then ensued on an amendment by Mr. Astbury that the National Dairy Association should amend its constitution so as to enable it to control the scheme outlined.

. The chairman was opposed to the idea, as the Association embraced among its members a great many proprietary owners and exporters, whose interests would not be served.

The amendment was lost, as was also a further amendment by Mr. Gibson (Rabotu), that it be referred back to the committee for further consideration and be dealt with in twelve months' time. | Mr. Boddie then moved that this meeting is of opinion that the time has come "to improve the methods of marketing our produce, and that the various delegates present bring the report before their companies, and that these be asked to report within one month, and that the committee be asked to remain in existence until after the replies have Hwen received. This was also lost.

Mr. Marx then moved that the majority report of the committee be amended by the alteration of the basis ,of allotment to one share for every ton of butter and half a share for every ton of cheese.—This was carried. After a further amendment, deferring the adoption of the report, on the grounds that those present were not able to pledge their factories, was lost.