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(4) That the Institute have the following powers, functions, and duties : — (a) Co-ordinating and controlling all dairy-research work and dairy-laboratory work financed by the State and/or the Dairy-produce Control Board, except the routine dairy-laboratory work carried out at dairy-produce export grading stores. (b) Prosecuting research in all matters affecting the production and processing of milk and cream, and the manufacture, transport, and storage of products of milk and cream. (c) Taking over from the Department of Scientific and Industrial Research and assuming control of the Dairy Research Institute (N.Z.). (d) Establishing and controlling such district dairy laboratories as may be considered necessary for the carrying-out of its functions. (e) Testing in such cases as it considers it desirable so to do the efficiency and suitability of ingredients, preservatives, materials, machinery, plant, and equipment used or intended to be used in the production, processing, manufacture, packing, transport, and storage of milk and cream and products of milk and cream ; with power to issue certificates at its discretion in respect of machinery, plant, and equipment that conform to the tests of efficiency and suitability laid down by it; and with power to prescribe conditions and charges in respect of any test made by it; and with power also to revoke any certificate granted by it. (/) Entering into arrangements with the Department of Scientific and Industrial Research and/or any Department, institution, body, company, firm, or person for the prosecution of any approved research work which it cannot itself undertake. (5) That the Institute have power to set up committees from its members ancl/or staff, and co-opt thereto such persons as it may think necessary, to carry out such duties, and to exercise such of the functions of the Institute as the Council may decide. (6) That the Institute be required to carry out on behalf of the Dairy-produce Control Board such routine analyses of milk and cream and products of milk and cream and of materials, ingredients, and preservatives used in connection therewith as may be required by the Dairy-produce Control Board. (7) That the State contribute to the funds of the Institute £7,000 per annum for five years, and thereafter contribute annually for quinquennial periods such sum, not being less than £7,000, as shall be decided prior to the termination of each such period. (8) That the New Zealand Dairy-produce Control Board should contribute annually from its general fund to the funds of the Institute such sum as it considers necessary, but being not less than the sum contributed by the State. (9) That the Institute have control of its funds and be empowered to accumulate and invest reserves, to receive and expend grants, subsidies, bursaries, and gratuities at its discretion, to pay salaries, wages, and travelling and other allowances, and generally to use its funds as it thinks fit in the discharge of its functions. (10) That the Council be empowered to vote an honorarium not exceeding £100 per annum to the Chairman of the Council. (11) That the Institute have the power to establish or participate in any scheme it thinks fit for the superannuation of its staff. (12) That the Institute be required to submit annually to Parliament and to the Dairy-produce Control Board a report on its operations and a statement of accounts duly audited by the Audit Office. • ESTABLISHMENT OF COUNCIL OF PRODUCTION AND TRADE. 295. Introductory : For a number of years several Produce Boards have been functioning independently in the control of the export of the primary products of New Zealand. There are the Dairy-produce Control Board, the Meat Producers Board, the Fruit-export Control Board, the Honey-export Control Board, and the Poultry Board. The export of flax products, though not controlled by a Board, is under the supervision of the Department of Agriculture in so far as grading is concerned. 296. Necessity for Co-ordinating Body : The Boards have fulfilled a useful purpose in directing the export and marketing of the several commodities over which they respectively exercise control, but there has been little or no cohesion or co-ordination of effort among them. While a measure of co-ordination would doubtless have been advantageous in times of normal inter-Empire and international trading, its absence did not give rise to any notable difficulties. Under the conditions now prevailing, when an intense economic nationalism has severely restricted our export trade, not only with foreign countries but with other parts of the Empire and with Great Britain itself, a policy of co-operation and co-ordination for the Boards dealing with the products of the Dominion has become urgently necessary. Independent Boards, each concerned with the marketing of one group of commodities, are no longer able, as isolated units, to cope effectively with the problems confronting them. The investigation and opening of new markets for the disposal of surplus production can best and most economically be undertaken by a single central body acting in the national interest and having due regard to the requirements of all branches of production. In some instances, the interests of the producers served by the different Boards may conflict or appear to conflict, as is the case in respect of restrictions on the export to Great Britain of

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