THE MEAT POOL.

Taranaki Daily News, 31 December 1921, Page 7

THE MEAT POOL.

VIEWS OF PRODUCERS. MEETING AT NEW PLYMOUTH. DIFFERENT OPINIONS EXPRESSED. DELEGATE TO CONFERENCE. The proposed meat pool was discussed at a meeting of representatives of the A. and P. Societies, the Farmers’ Union and producers held in the Soldiers’ Club, New Plymouth, yesterday. There was an attendance of about fifty, and Mr. W. B. Grant, president of the Taranaki A. and P. Society, presided. The scheme was thoroughly discussed, opinion on it differing, and no expression of feeling was recorded by resolution. Mr. J. T. Quin, chairman of directors of the Taranaki Farmers’ Meat Company, was appointed a delegate to attend a meeting of producers at Wellington on January 10 to discuss the pool scheme. In opening proceedings, the chairman explained that the meeting had been convened by him, under instructions from the Minister of agriculture (the Hon. W. Nosworthy). As the meeting was aware, a committee, consisting of six farmer representatives in the House had been set up to make investigations and bring down a scheme for the better handling and marketing of meat. Mr. O. Hawken, M.P., one of the members of the committee, who was present, would outline the proposal, and the Minister had telegraphed inviting the meeting to discuss fully the scheme. It had already been discussed fully at a meeting in Wellington and approved, and also by the House of Representatives. It was the desire of the Minis- ■ ter, however, to know that he had the full backing of the country to carry out the scheme. There was no doubt everyone felt, with the Minister, that something had to be done to assist the prodncers of the country, and in bringing down the proposal, though it bristled with difficulties, the committee thought it would have the desired effect. Mr. Grant then called on Mr. O. Hawken, M.P., to address the meeting. PROPOSALS OUTLINED. Sir Hawken prefaced his remarks by explaining that he could not commit anybody and he could not say definitely that the proposals would be the exact scheme. Of course it was a Government scheme and in the end the Government would put it through should they get the backing. in explaining the scheme he would give i.ls expression of opinion as a private member. In order to go into the question they must take a view of the position of the meat trade as it stood to-day, and it must be evident to all that so drastic a proposal as this scheme was must have a cause behind it. Really he thought the cause of the proposal was in the commandeer. It would be remembered that when the British Government took possession of the meat, wool and butter that scheme worked all right at first, but towards the end difficulties arose. First, there came a big surplus of wool and a committee was formed to take charge, and he believed there would have been a of chaos if it were not for thw» steadying influence the committee was able to exert in this trade. The next difficulty which arose was in regard to meat. There was a hold up ana an over quantity at Home now being 100,000 tons. This, on top of/the market, was a great danger, and when it was remembered that a lot of this stale meat, and consequently harder to dispose of, the difficulty the producer was confronted with, and the cause of the bad market, would be easily realised. Mr. Hawken also pointed out that a similar position had now arisen in the dairy industry, and there were -21,000 tons of butter accumulated.

MISTAKE AT HOME. No doubt a very grave mistake was made at Home, and over which those ; n New Zealand had no control. Meat wks bringing enormous prices, but was not disposed of. Who was responsible was hard to say. but the result was there. In New Zealand we knew that an immense amount of harm had been done to the trade and the people were in the gravest difficulties, very largely through the holding up of those primary products which should have been used in the ordinary way of trade. Having too much money probably induced the responsible people at Home to hold on to those products, and this ruined the market, and would ruin the farmers if the Dominion was not careful. There had been a suggestion that New Zealand should buy the stocks at present being held in England, but his opinion was'"that if New Zealand was to take any action it should he to the meat in the country. Out of various proposals came the suggestion that the meat in New Zealand should be pooled. Particulars had been published, but there was a great deal of misconception as to what the proposals really were As vet thev were not hard and fast proposals, and it was difficult to give details until the whole scheme had been threshed out. • The proposal was to take possession of the meat on the hooks—that was, immediately it was killed and before it was graded, and to pay out to the farmers 90 per eent. of the value. A board was to be set up who would either be the managers or employ managers to conduct the business. It was not a <.ov ernment concern though the Governbacking. Legislative be required and Government nominees would sit on th? tZvd' verv much on the same hues as the Bank of New Zealand was run. The Government did not want to touch the management, except to help in the way f finance The idea that only farmer meat in under the pool an entirely mistaken one. ThXT was no discrimination: anyone could buy and up ' board S and conduct the selling. , THE GRADING SCHEME. Mr Hawken did not think that the each work’s meat, and the prothat tor this season the

grading already adopted by the works would be followed'out for the rest of the season. Each owner would lose his interest in his own stock. He would have certain sheep, cattle or lambs in pools of a certain grade. Mr. Hawken illustrated this point by stating that if, say, 5000 lambs of the first grade were killed the board would then start to sell that quantity of meat through the usual channels at Home. He saw no reason for departing from this, but a board would be set up to watch that end. The Usual channels would continue to be used for disposal, and in fact every channel that it was possible to use where the meat was treated fairly. Each pool would be cleared up and the owners would immediately get their money.

It would not be a universal pool, for if that were the ease it could not Mfe wound up till the end of the season. He did not think producers would find that the pool would keep on running from year to year, such as the wheat pool in Australia. It would be worked in rotation, each season’s meat to be disposed of as soon as possible. There might even be a good deal of forward selling. Many works had conducted business on these lines, and he believed it would be foolish to disturb the practice of selling forward in cases where it had been established.

. One great advantage of the pool would be that only one person would be selling the meat, and therefore the producers would not ’be under-selling. If the meat was mishandled after it was sold the pool always had the control of the next supply. It was a tremendously intricate scheme, but he believed that, when it was fully gone into the producers would find that it would have great advantages. Firstly, it was considered that a great saving could be made in regard to shipping. The price of shipping meat Home before the war was about 5-8, while the present cost was l£d on most of the meat, and 2d on some of it. When they remembered that a farthing per lb saved meant about £4do,000, it would easily be seen that a very small saving in shipping meant a large sum to the country. SHIPPING SUGGESTIONS. There was no doubt that during the war the producers got into the habit of using the shipping in a very wasteful manner. For instance, ships were going round three or four ports to pick up quite small quantities. The cost of shipping had now gone up to such an extent that the companies were getting more than the farmer who exported the meat. As a matter of fact the consolidated charge (the costs from the time the meat was received at the works till it was sold in London) in some cases amounted to 4d per lb. While this was the case there was a good deal of meat in New Zealand which was not worth more than Id per lb (probably a hundred million lbs), and it was extraordinary that the charges should have gone up to such an extent to amount to four times more than the product was worth. The charges had to come down, and the committee considered that with the meat under one control the producers would be in a far better position to say what these charges should be than if the meat was in scattered hands as it was to-day.

There was one factor which had tremendously weakened the prospects for selling the meat reasonably. The companies, or some of them, lost very heavily on the meat last, season, and thfs year it was found that the greater number would not buy at all. They were forcing the owners to ship on their own account, and !t seemed to him that for dozens and dozens of farmers to be selling meat must inevitably lead to a break in the market and a chaotic condition towards the end of the season. Another difficulty which had arisen, and partly from the fact that owners were sending Home on their own account, was that a lot of over-weight, second-class meat was exported. Whatever the board did when it got Charge there was one thing practically certain, namely, that a lot of the meat of the class mentioned should never go Home as frozen meat. Mr. Hawken said he had heard of one man who was sending Home 841 b wethers frozen, and it was quite possible

that producers might have to pay a rebate on the charges. It was quite ceitain that that class of meat would come into competition with the glut of secondclass meat at Home, and j robably he would not get the charges back. Thve was no doubt a good deal could be done in regulating this sort of thing. A good deal of meat should not be allowed to go Home as frozen n».*at. It should be disposed of in other ways, and by keeping it off the market »!.? producers would no doubt get tnc value hack in* other ways. Personally ho believed that none of the good companies would export the heavy grades, which wer? unsuitable. MENACE OF THE TRUSTS. Mr. Hawken again emphasised that a* lot of good could be accomplished by regulation of t)je market and by securing better shipping rates. He did not think that the producer could raise the price at Home, as the tendency was for all products to come down. If they could have got the prices existing to-day befbre the war they would have been shaking handsome profits, but the • charges incurred now in exporting left the producer very little. He believed expenses could be saved in a number of directions, including the charges incurred in cabling. Also, there was no doubt a great many people who would not be needed in handling the meat if it 'were controlled under a pool, and a great deal could be saved in the marketing of the meat. If the producers wanted to retain the control of the trade in the Old Country there was no doubt that they could not go on under the same conditions. If the meat trust was to be kept from handling New Zealand meat then the producers would have to do something. He had no doubt that in a very short time one or two would have been handling New Zealand meat -.in the London market. Though this was a big assertion to make he desired to point out that the Argentine meat, of which a gloat deal more was exported than from New Zealand, was in very few hands. They could not expect to compete with people, of this class in the way wp had been doing in New Zealand by sending Home a lot of farmers stuff. “I sav without doubt,” continued Mr. Hawken, “that if this pool is not undertaken by. the farmers of New Zealand, then somebody else is going to take the pool for us. A good many people think that it would be a good thing. The Government have fought against it for a lon«r time, and are distinctly of opinion that every effort should be made-to keep our food products in our hands within the Empire. They are prepar -d to put up a great fight to help the farmer and do as well for him or better than could be done by outsiders. That is one aspect that must appeal to everyone. Continuing on this question. Mr. Hawhe believed that a lot of the oxpaller coinpaides would have been at

the mercy of the trust. A freezing works might be owned by farmers, but was of no use without a supply, and once the meat trust became established it could ruin them all with the exception of one or two of the big works, by holding the supply and giving a little more to the farmer for the meat. REASONS FOR. CRITICISMS. The present works had been built up at great expense, and the Government wanted to see them have a fair run if possible. The only way this could be done at the present- juncture was to form a pool to give the companies a chance against the competition they would have to face. Any company or buyer who purchased sheep at the paddock would still be able to have the stock frozen, but would then have to sell it to the pool. He saw no reason however why buyers or companies, could not buy back the meat from the pool later, so that companies could re-pur-chase and continue business practically on the same lines as at present. This would be entirely a matter for the board, who would have the right to refuse to sell to anyone. Mr. Hawken thought that a great deal of criticism that had been levelled at the scheme had been caused largely by those who, perhaps, were interested. Naturally a scheme such as this»one would throw some individuals out of their positions, and in looking over criticisms in the papers he had a suspicion that there were some reasons behind these criticisms, and ones which he could pretty well trace himself. Mr. Hawken said he had seen some criticisms which were altogether beside the mark. For instance, he understood there was a petition going round now for signature by farmers which had for its main reason the argument that the farmer would have to put the meat into the works on his own account. This was not so, and he saw no reason why the usual markets should not go on in the same way. The farmer would get his money, probably 90 per cent., immediately the stock was killed, and as soon as a sale was effected he would get the full value. The freezing companies would have the right to the whole of the offal and probably would conduct the marketing of boneless beef and tinned meal. THE QUESTION OF GRADING.

In concluding, the speaker said the views he had given were his opinions of the scheme, but possibly there might be some variations. The reason that the meat should be pooled in each freezing company was that it was almost impossible to make a universal potfl or district pool. An instance was the handling of lamb, which was prdoably the principal meat in New Zealand. It camp in at different times, according to the district. In connection with grading, there was a feature that he had always stressed, and this was that they never received the proper price for the quality which they ought to grow, under the present system. Some of the works rip doubt studied this point, but others, he thought, paid out on a rough and ready basis, and the farmer never knew what he was being paid for. Paying by grading, as would be adopted by the pool, would draw the attention of farmers to the fact that a lot of the meat which Ijad been grown was 'not very suitable for the English market. He believed the scheme would have the effect that good quality would be paid for at a much better rate than hitherto. When the pool was formed it would be set up with a constitution that would be sufficient to carry it on for any time. It was not a pool for only twelve months, but it might only last for that period. The position depended on the farmers, but the Government would make provision for a continuous working of the scheme. They wanted the producer to be satisfied. however, before entering into the scheme Mr. Hawken was roundly applauded at the conclusion of his remarks, and questions were then invited. THE DISCUSSION. In response to a question by Mr. W. C. Weston as to where the money would come from to operate the scheme, Mr. Hawken said that it would come through the ordinary* channels the Government guarantee behind the money the banks advanced. Incidentally the speaker pointed out that New Plymouth was considered a cheap port for shipping meat, and there need not be the slightest apprehension that New Plymouth would not be used as a port in connection with the scheme. In fact, it might be found that other companies could profitably send their meat to New Plymouth. (Hear, hear). Mr.-Newton King wished to know why the pool board should hope to get cheaper freights than the associated freezing companies. Mr. Hawken. speaking as one who had to ~do with the last contract, said that the committee were admittedly in a weak position, being told by the freezing companies that they themselves would sign if the committee did not. Thus, to keep the companies together, ■ the contract was signed. 1f the handling of the meat was not in our hands, it was futile to talk cheaper freights. At present they were in a very weak position to argue about freights with’ shipping companies. Mr. King said all were faced with the gravest difficulties, and it behoved them to use their brains to get the best price possible. Mr. Hawken deserved thanks for the part he had taken, but the speaker confessed that he was not enamoured of the present scheme, which was a restriction on trade, and consequently dangerous. The present stor-. age of meat, butter, cheese and wool in England was due to the control of the Government or the boards who controlled the produce; if it had been in commercial hands, all would have been sold. Government interference in these matters, all would agree, was a failure. and was fraught with difficulties and dangers. Personally, he could not see where the advances' were to come, from. Ar. regards freights and finance, the speaker could not -see what advantage a poo) board would have over an organisation of freezing works. There was the further risk of buying the whole of the season ahead, thus gambling right ahead on the London market.° Directors therefore would have to be careful. At the present time directors of freezing companies had to judgje from report?,. Local works, he thought, would be better able to form an opinion than would some gentleman on the pool board who might form a correct judgment of the matter but. on the other hand, might judge quite wrongly. 7 FAITH IN THE SCHEME. In replying. Mr. Hawken admitted that there were difficulties to'be overcome, but nevertheless he w*as of the firin conviction that companies would be on a better footing under the scheme as far as legitimate business was concerned than in the past. A number of

smaller companies had been ruined by speculation. It was the speaker’s contention that the pool board’s information would be fully as good as, or better than, that of individual companies. The scheme would be of advantage to the freezing companies which should look to the offa] part of the business for profit. If the meat was taken out of their hands, the companies would be in a better position. Mr. Hawken stressed the point that the pool would be run by the producers’ own board with the producers’ —and not the Government’s—money. Whatever profit accrued the producers would get, or, conversely, a loss would be regulated they went along. No more would be paid for meat than it was worth. A short time ago, when the last contract was drawn up. the freezing companies were not united, and the speaker thought they were no better united now. Under the pool scheme, therefore, there would not be a whole lot of little contracts between freezing and the shipping companies.

Un reply to Mr. J. T. Quin, who said that the present market prices meant ruination to the farmer, even if the land were free, Mr. Hawken said all producers knew that the costs of putting meat on the market were altogether out of proportion, but he was convinced that normal conditions would return when, instead of a charge of 4d on meat, this would be reduced to the prewar charge of l£d to Ifd, but the difficulties in re-arranging charges would take time. The position could not be forced. Every farthing’s difference, said the speaker, meant nearly £500.000 to the producers. If the present charges continued much longer many farmers would have to go out of business. Commercial and farming interests were bound together, and if the farmer handed his liabilities on to the country the position would be very grave. The farmer was only receiving 20 per cent, on the previous year’s prices and was actually getting less than in pre-war times. Thus responsibilities were greater and all had to help, from the laborer up. PRICES AT HOME. Mr. Quin considered it was the absolute duty of the English Government to keep down the prices of foodstuffs for the English consumer. No food should be imported except at the lowest cost passible. ■“We must put our own house in order first.” replied Mr. Hawken. Meat was sold by the producer at a low price, but the rise of cost in retailing was far above the wholesale price. The prices between producer and consumer must be lessened in proportion. Mr. Roger Greenwood mentioned that meat that sold in the Old Country during the war at from 1/6 to 1/10 per lb. was actually sold to military camps in 'England at 7Ad. Why was there this great difference? He was of opinion that thp meat should be sold at about 1/- a lb. to remove the glut.

“This is a phase of the question that rose out of war conditions,” said Mr. Hawken. Efficiency and greater efforts were needed to bring prices down to normal. The proposed pool meant drastic alterations, but these were justified in the face of the confronting difficulties. Help would be given by the scheme and costs brought down quicker. As an instance of costs, the speaker stated that 61b. tins cost 1/1. whilst the meat in them was worth sixpence. The Port of London authorities had built storage at an exorbitant price, and, unless the producers were watchful, they would have to pay the cost. The pool board, he believed, could obviate this, and thus make a saving. • DETAILS WANTED. Mr. Quin said that sforage which cost 3-32nds of a penny in New Zealand cost nearly Id in the Old Country. As it was understood that a 90 per cent. advance would be made, Mr. Hawken was asked how the ’pool board would arrive at their valuation, to which he replied that this would be done in the same way as the freezing companies formed their estimates. The advance would, of course, .be without recourse.

Touching on the question of insurances, the speaker said that a great deal was paid out in New Zealand which might be lessened.— Insurances on produce going Home were very heavy, but if the produce were all under one controlling hand a great saving poirld be gained. Under the pooling system there would be no secret rebates with the shipping companies. AH would be on one footing, whereas previously the small man who shipped his meat homo often got “the tail-end” of the market. The board would advance as much as it could and would work on good lines. There was no big risk of the board advancing too much. The board might find it unwise to advance the full 90 per cent., and perhaps 85 per cent, would be advanced. Mr. Quin thought it was only a business principle that recourse should be had against the vendor. Mr. S. G. Smith,. M.P., said he had been asked by the Minister of Agriculture to support the proposals put forward, but personally he regretted that no definite scheme had been laid down, though he .understood, a definite scheme would, be formulated' at the producers meeting to be held in Wellington on January 10 next. The position, especially financially, was so grave that this’district ought, certainly to have a delegate at that meeting, but he should have no power to commit the producers or the district without their having an opportunity of discussing the scheme put forward. Details in .connection with the scheme should also be given. The Prirtit Minister of Australia said he would have nothing to do with any Government pools again. If the producers of New Zealand adopted the poolin" system this should certainly come "before the House. Mr. Smith concluded by thanking Mr. Hawken for the part he had taken, and sympathised with him in the difficult task. (Applause). SCOPE OF THE POOL. Mr. Hawken said he appreciated Mr. Smith’s remarks. He wished to point out, however, that the district’s delegate to Wellington would, have to affirm the principle or otherwise of the scheme, though it would not be necessary for him to go into the scheme, the working of which could be entrusted to the" board. Once the producers meeting was over, matters in connection with the proposal would be finished. Once the principles were laid down the details could be left to experts. Discussing another aspect of the question raised by Mr. Smith, Mr. Hawken said the wheat pool of Australia should not be confused with this pool, which was, as he had before, to be run with the producers’ and not with the Government’s money. Mr. C*. H Weston asked if any scheme had actually been formulated. What ! relation would the pool board have to •the association of fre- 5 ”- companies!

Would the two be antagonistic or would they fuse together? The questioner also asked if the .board would fix the price of the meat and see to its selling. Could the board fight the suggestion that a trust could come into a district and take away the freezing companies’ supplies? In reply, Mr. Hawken stated that the pool board would take possession, of ail meat when killed, and private trusts would have nothing to do with it. No one could send meat Home except through the pool, which would do all the selling and buying. The speaker understood that freezing companies and commercial interests would have representation on the board and act with it. That was, in reality, the principle of the scheme. Another point was that the pool had power to sell or to refuse to sell. Probably, if the proposal could be put in operation this season, the present grading system would continue for this season; it would be foolish to alter it. Ultimately, if the pooling system continued, the grouping of grading for the market might be instituted.

• Mr. Quin expressed the opinion that the producers, and not the freezing companies, should have the say on the pool board. This compile tied .the discussion, the question of sending a delegate to the conference on January 10 then arising, and Mr. J. T. Quin was appointed the district’s representative. POSITION OF COMMERCE. In moving a vote of thanks to Mr. Hawken for an interesting and instructive address, Mr. T. C. List (President of the Taranaki Chamber of Commerce) said he desired to express the thanks of the commercial community to Mr. Hawken for attending at some personal inconvenience and placing the matter t>o fully before the meeting. Referring to some observations made by Mj. Quin to the effect that the commercial community w T as “taking it out of the farmer,” Mr. List said that, though that speaker was quite entitled to his tilt, the commercial community was also confronted with similar problems to those which the farmer was up against. They had considerable troubles at the present, time, incidental to the readjustment and reconstruction following the war, and fully realised that if the farmer was not doing well the business people could not prosper. They were vitally interested in the welfare of the farmer, realising that they must share in his success or failure, and therefore the commercial men desired to meet and help the farmer in every way. The motion, which was seconded by Mr Newton King, was carried unanimously. Replying, Mr. Hawken said that anything which was of interest to the community as a whole always had his goodwill. He realised that the commercial circles also had their difficulties, and these should be faced together in order to consider the best remedy. In the present problem the commercial men would be consulted, and also the freezing works authorities, as wel? as the farmer. He reiterated that if -the present system was persevered in he had no hesitation in saying that the control of meat would pass out of their hands. . The meeting closed with a vote of thanks to the chairman. x