H.—29a

Standardization of Accountancy Systems It is a recommendation of the Commission that the Central Authority should call a conference of representatives from firms engaged in the processing and distributing trade, with a view to establishing standard systems of accountancy and costing and the publication of standard annual accounts in a manner likely to give all the information required by the Central Authority. This would be similar to the position which already exists in the dairy industry whereby all dairy-factories are required by law to publish their annual accounts in a statutory form. The work of the investigating accountant attached to the Commission would be of considerable value to such a meeting, and no doubt full use would be made of the knowledge already obtained. Finance The Commission has given attention to the question of how the Central Authority should be financed, and in view of the fact that the nature, powers, and functions of the Central Authority demand independent and completely impartial decisions on all matters it is the Commission's recommendation that the Government consider providing all the necessary finance needed by the Central Authority. The Central Authority should be given all reasonable latitude in the spending of funds, but, apart from the amount necessary for the cost of running the office and secretariat, the Commission has in mind funds for publicity and research for the benefit of the industry generally, and also funds enabling the Central Authority to grant bursaries to approved• students who wish to take courses in market milk-production at Massey College along the lines indicated in the Appendix on education and research. Care should be taken to see that the expenditure of moneys on projects of this nature are not duplicated by the local Milk Councils, but this is a matter to which the Government in setting up the Central Authority would no doubt give fidl consideration. Metropolitan Milk Councils All that has been stated on the importance of adequate safeguards in the liquid-milk industry in order to ensure that the proper food value of milk is safeguarded and that its potential danger as a means of spreading disease is insured against to the maximum possible extent, lends emphasis to the Commission's conclusions that some form of organization and authoritative control over the treatment and distribution of milk is essential. The Health Department's activities are chiefly of a policing nature and arc not actively concerned with organization of the industry or its guidance. One controlling and guiding body for treatment and distribution is just as essential as a similar body dealing with production and collection. Such a body must, however, be completely divorced from commercial interests in the trade, although under proper circumstances it may need to take an active part in the processes involved. In the absence of a municipal milk scheme, therefore, the Commission recommends that Metropolitan Milk Councils be set up in Christchurch and Dunedin along similar lines to the Auckland Metropolitan Milk Council and with similar powers. The constitution of the Council should adequately provide for direct consumer representation and for the election or co-option to the Council of persons with a technical knowledge of milk and of the nutritional value of milk. The Council should also include persons with business knowledge and capacity, and it may be that at least one member with a detailed knowledge of the production side would also be of considerable advantage. The •general purpose of such a Milk Council would be to apply the policy of the Central Authority on all matters of standards, prices, and margins, and all other matters outlined as being the responsibility of the Centra] Authority. The Milk Council should direct and guide educational work in the consumers' interests and should actively assist in improving methods of processing and distribution. Its policy would be to co-operate with the processing and distributing interests in their efforts to achieve complete efficiency. The Milk Council would also be responsible for obtaining estimates from the vendor interests of the anticipated demand for milk so that this information could be passed on to the Dairy Farmers' Milk Supply Association for action in organizing supply. The Milk Council should co-operate fully with the Dairy Farmers' Milk Supply Association in seeing that proper and adequate steps are taken to ensure such supply. The Milk Council must further concern itself as rapidly as possible with organizing daily testing of all milk, and to do this would need to co-operate with both the vending-houses and the Dairy Farmers' Milk Supply Association. The Milk Council should ensure that proper standards were being observed and that all unsatisfactory milk was being rejected from the city-milk supply. In Dunedin the state of existing processing and distributing facilities is such as to necessitate largescale reorganization, and it will be necessary for the Central Authority to give careful consideration to the proposals which are advanced by existing institutions in order to ensure that the reconstruction which is so urgent and so desirable is carried out in the best possible manner. In any scheme of reconstruction it is desirable to consolidate existing interests as much as possible so that the cost of processing and distribution can be reduced to a minimum. Consequently the Commission suggests that, wherever possible, the issue of new licenses, particularly for processing plants and to small vendors, should be discouraged in favour of amalgamations. The Auckland Metropolitan Milk Council has stated a strong case to the Commission in support of its submission for increased powers, similar to those of the Sydney Milk Council, under which the Milk Council would have full power to purchase, process, and distribute milk. The Commission has given careful and detailed consideration to the submissions of the Auckland Milk Council, but the powers sought appear to us to be, in certain important respects, inconsistent with the creation of Dairy Farmers' Milk Supply Associations with powers as set out. For reasons already stated the Commission is satisfied that such a supply association is best fitted to organize adequate supplies of milk of high standard to the metropolitan area, and wo can see no advantage in transferring this responsibility to the Milk Council. Apart from consideration of the request for powers to purchase milk and to organize the supply, the Commission is not qualified, even if it were entitled, to pronounce upon the merits of the application for powers to process and distribute milk. Such an application is, however, one that should receive close examination by the Central Authority whose appointment we have recommended, and particularly would we suggest that that Authority give full consideration to the question of vesting in any of the metropolitan milk councils in whose area a Dairy Farmers' Milk Supply Association, for any particular reason, cannot be created, such powers of purchase and control as are sought by the Auckland Metropolitan Milk Council. In such event, however, completely adequate producer representation

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