1950-51

VICTORIA

REPORT OF THE SELECT COMMITTEE

on the

OPERATIONS AND ACTIVITIES

of the present

EGG AND EGG PULP MARKETING BOARD

and of the

TWO PRECEDING BOARDS

together with

AN APPENDIX AND MINUTES OF EVIDENCE

Ordered by the Legislative Assembly to be printed, 30th October, 1951.

!111 ~ntlt.orit)) : 8 J, J, GOURLEY, GOVERNMENT PRINTER, .'dELBOURNB.

D.-No. ·-10581/51.-PRIOE 1S. 9d.

Extracted from the Votes and Proceedings of the Legislative Assembly

3RD JULY, 1951. 8. EGG AND EGG PuLP MARKETING CoMMITTEE.-Motion made and question-That a Select Committee be

appointed to inquire into and report upon the operations and activities of the present Egg and Egg Pulp Marketing Board and of the two preceding Boards, and whether it is desirable, in the public interest, that there should be any change in the powers, personnel or organization of the Egg and Egg Pulp Marketing Board; such Committee to consist of six members, with power to send for persons, papers, and records, to sit on days on which the House does not meet, to move from place to place, and to report the minutes of evidence from time to time; three to be the quorum (Mr. Moss).

Amendment proposed-That all the words after "That" be omitted with the view of inserting in place thereof the words " in the opinion of this House a Royal Commission should be appointed to inquire into and report upon the operations and activities of the present Egg and Egg Pulp Marketing Board and of the two preceding Boards, and whether it is desirable, in the public interest, that there should be any change in the powers, personnel, or organization of the Egg and Egg Pulp Marketing Board" (Mr. Hollway)-and, after debate-

Question-That the words proposed to be omitted stand part of the question-put.

The House divided.

Ayes, 32.

Mr. Barclay Mr. Brose Mr. Cain Mr. Cochrane Mr. Cook Mr. Dodgshun Mr. Doube Mr. Dunn Mr. Fewster Mr. Fulton Mr. Galvin Mr. Hayes Mr. Holt Mr. Hyland Sir Albert Lind Mr. McDonald

(Shepparton) Mr. Itlerrifield

Mr. Mitchell Mr. Morton Mr. Moss Mr. Mutton Mr. O'Carroll Mr. Pettiona Mr. Randles Mr. Scully Mr. Shepherd Mr. Smith Mr. Stoneham Mr. Sutton Mr. Towers

Tellers.

Mr. Buckingham 1\Ir. Ruthven

And so it was resolved in the affirmative. Original question-put and agreed to.

Mr. Block Mr. Bolte Lt.-Col. Dennett Mr. Don Mr. Fraser Lt.-Col. Hipworth Mr. Hollway Lt.-Col. Leggatt Itlr. Mack

Noes, 20.

1\Ir. McDonald (Dundas) Mr. Mibus

11TH JULY, 1951.

Mr. Norman Mr. Oldham Mr. Reynolds Mr. Rylah Brig. Tovell Mr. Turnbull Mr. Whately

Tellers. Mr. Dawnay-Mould Mr. Ireland

17. EGG AND EGG PuLP MARKETING CoMMITTEE.-Motion made, by leave, and question-That the Egg and Egg Pulp Marketing Committee consist of Mr. Barclay, Mr. Cochrane, Mr. Cook, Mr. Galvin, Mr. Hayes, and Itlr. White (Mentone), and be empowered in its inquiries to avail itself to such extent as it thinks fit of the assistance of specially qualified persons (Mr. Moss)-put and agreed to.

REPORT

The Select Committee of the Legislative Assembly appointed to enquire into and report upon the operations and activities of the present Egg and Egg Pulp Marketing Board and of the two preceding Boards, and whether it is desirable, in the public interest, that there should be any change in the powers, personnel, or organization of the Egg and Egg Pulp Marketing Board, has the honour to report to your Honourable House as follows :-·

INTRODUCTION. 1. Your Committee feels that it would be advisable, at the outset, to give a brief

outline of the machinery under which the Egg and Egg Pulp Marketing Board was established.

Section 6 of the Marketing of Primary Products Act 1935 empowers the Governor in Council, when requested so to do by a petition signed by the requisite number of producers of a product, to issue a proclamation declaring that product to be a commodity for the purposes of the Act.

Thereupon a poll shall be taken on the question of whether a marketing Board shall be constituted in relation to the commodity. ·

If 60 per cent. or more of the producers entitled to vote at such poll have voted thereat, and 60 per cent. or more of the votes polled are in favour of the constitution of a Board, then the Governor in Council may issue a proclamation declaring that a Board shall be constituted and that the provisions of the Act shall apply to the commodity.

In pursuance of the powers vested in him by the Act and after the necessary formalities had been properly observed, the Governor in Council, on 23rd November, 1936, declared that a marketing Board should be constituted in relation to Eggs and Egg Pulp-such Board to consist of five members, of whom four shall be elected by producers of eggs and one shall be appointed by the Governor in Council. For the purposes of elections of Board members the State is divided into four zones, each returning one member. These four zones are, broadly, the Metropolitan Area, the Bendigo Area, the Ballarat Area, and, finally, the Geelong and Gippsland Area.

2. On 8th February, 1937, an Order in Council was issued appointing the Board and assigning to it the name of " The Egg and Egg Pulp Marketing Board ". Contained in the same Order in Council was the appointment of four members who had been elected at a properly constituted poll of producers of the commodity and the appointment of one member as the "Government Nominee".

Section 10 of the Act provides that a member of the Board shall not hold office for more than two years, and, in fact, by the aforesaid Order in Council, the period of appointment is fixed at two years.

On 2nd August, 1937, a proclamation was issued by the Governor in Council declaring, under Section 16 of the Act, that, for a period of two years, all eggs subject to the Act shall be divested from producers of eggs and become vested in and be the absolute property of the Egg and Egg Pulp Marketing Board as the owner thereof. Further proclamations have issued from time to time vesting eggs in the Board for additional periods of two years in each case.

3. The Boards which come within the Terms of Reference to your Committee, their personnel, and dates of appointment are as follows :-

Date of Appointment.

(a) 15th February, 1947 15th February, 1947 15th February, 1947 15th February, 1947 15th February, 1946

Name of Member.

Robert Edward Huggins (Chairman). John Henry Barnes. Keith Henry Holland. Charles Sleigh. Kenneth Leslie Oram MacLeay (Government

Nominee).

Da.te of Appointment.

(b) 15th February, 1949 15th February, 1949 15th February, 1949 15th February, 1949 15th February, 1946

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Name of Member.

James Carter (Chairman). Reginald George Dawson. Rhyl Pembroke Gwyther. Harold Owen Murray. Kenneth Leslie Oram MacLeay (Government

Nominee) (Resigned 31st December, 1949).

lOth February, 1950 George Robert Boulton (Government Nominee).

(c) 15th February, 1951 George Hawthorne Roadley (Chairman). 15th February, 1951 Clarence Aldous Hurst. 15th February, 1951 Carlie Samuel Gustav Nettelbeck. 15th February, 1951 Edgar Albert Piper. lOth February, 1950 George Robert Boulton (Government Nominee).

For convenience in this Report the 1947-49 Board will be referred to as the "Huggins Board," the 1949-51 Board as the "Carter Board," and the Board elected m 1951 as the present Board.

With regard to the present Board the following facts should be noted :-On 2nd October, 1951, Mr. G. H. Roadley resigned as Chairman, and the Government

Nominee, Mr. G. R. Boulton, was appointed Chairman in his stead. On 17th October, 1951, the Governor in Council issued a proclamation, pursuant

to the provisions of the Egg and Egg Pulp Marketing Board Act 1951, suspending the members of the Board for a period of three months and appointing Mr. G. R. Boulton to be the manager of the Board during the said suspension.

GRADES OF EGGS. 4. The following extracts from " The Egg and Egg Pulp Marketing Board

Regulations 1941 " set out the various grades and qualities of eggs :-" 31. There shall be three qualities of eggs of the domesticated fowl, namely :-

' Export Quality eggs,' which shall consist of eggs-(a) the shells of which are clean, uncracked, and free from stain, and which are not thin,

rough, or mis-shapen; and (b) which, when candied, are free from blood spots, the yolks of which are translucent or but

faintly visible, the whites of which are translucent and firm, and the air cells of which are not more than three-sixteenths of an inch in depth.

'First Quality eggs,' which shall consist of eggs-(a) The shells of which are clean, uncracked, and free from stain, and which are not thin or

mis-shapen; and (b) which when candied, are free from blood spots, the yolks of which are translucent or but

faintly visible, the whites of which are translucent and firm, and the air cells of which are not more than one-quarter inch in depth.

'Second Quality eggs,' which shall consist of eggs which do not conform to the quality or description of Export Quality or First Quality eggs, but which are fit for human consumption.

32. ' Export Quality eggs ' of the domesticated fowl shall be divided into two grades, namely :­'Export (1),' which shall consist of eggs of not less than It oz. each in weight, with

an average weight of not less than 24 oz. to the dozen. 'Export (2),' shall consist of eggs of not less than I! oz. each in weight or more than

It oz. in weight. ' First Quality eggs ' of the domesticated fowl shall be divided into three grades, namely :­

'Hen,' which shall consist of eggs of not less than It oz. each in weigll.t, with an average weight of not less than 24 oz. to the dozen.

'Medium,' which shall consist of eggs of not less than lt oz. or more than It oz. each in weight.

'Pullet,' which shall consist of eggs of not less thait I!; oz. each in weight but less than It oz. each in weight.

' Second Quality eggs ' of the domesticated fowl shall be divided into three grades, namely :-' Second Quality A,' which shall consist of eggs which are not cracked and are not less

than I! oz. each in weight. ' Second Quality B,' which shall consist of eggs which are cracked, but not leaking,

and are in a condition that will permit packing in fillers for sale in shell form. 'Second Quality C,' which shall consist of eggs which are fit for human consumption

in liquid form."

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5. Your Committee, with the knowledge that it was faced with a difficult and onerous problem in its allotted task of conducting a comprehensive and searching inquiry into the matters referred to it, realized that its investigations undoubtedly would be expedited by the eo-opting of expert assistance. It, therefore, exercised the authority contained in the resolution agreed to by the Legislative Assembly on the 11th July last, namely:-

"That the Egg and Egg Pulp Marketing Committee ..... _ .. be empowered in its inquiries to avail itself to such extent as it thinks fit of the assistance of specially qualified persons."

Under this authority your Committee sought the services of a barrister to assist in the examination of witnesses, and to this end approached the Government, who were pleased to brief Mr. Sydney T. Frost, of Counsel. In addition, Mr. Patrick Ryan, B.Agr.Sc., Chief Inspector of Agriculture, who is a recognized expert on Victorian marketing legislation, and who, as an officer of the Department of Agriculture, has a comprehensive knowledge of the operations of the successive Egg and Egg Pulp Marketing Boards, was made available, at the request of your Committee, by the Honorable the Minister of Agriculture.

6. The examination of witnesses commenced on 1st August, 1951, and in all, thirty-three witnesses appeared before your Committee. Evidence was taken on oath and in public, with the exception of that given by Mr. R. C. Blake, Chief Executive Officer and Superintendent of Exports, Australian Egg Board, who sought the leave of your Committee to appear in camera. In view of the position occupied by Mr. Blake, and its relation to the egg industry throughout Australia, this request was granted. A list of witnesses who gave evidence is appended to this Report.

Inspections were made of the grading floors conducted by the Egg and Egg Pulp Marketing Board at Box Hill and Oakleigh, and of those by K. L. Ballantyne and Co., an authorized agent of the Board, at South Melbourne, and the United Poultry Farmers' Co-operative Society Ltd., at Watsonia.

Furthermore, your Committee visited New South Wales and South Australia in order to acquaint itself of the constitution and activities of the Egg Marketing Boards in those States. References to these visits will be found on pages 24-25 of this Report.

7. Prior to 1943 the wholesale distribution of eggs for consumption in this State and the export of eggs from the State were in the hands of private firms and companies who, since the establishment of the Egg and Egg Pulp Marketing Board, had acted as Authorized Agents of the Board, and who, in some cases, had been engaged in the.handling of eggs for many years.

The continued operation of these Agents has been authorized by the issue by the Board, from time to time, of licences, which permitted them to receive eggs from the producer for the purposes of re-sale-the Agent being accountable to the Board for all eggs handled by him. The monetary return to the Agent for this service, at the present time, is approximately 7s. 8d. per case of thirty dozen eggs.

8. It was made quite clear to your Committee, in evidence, that one of the causes of unrest in the egg industry has been the divergence of opinion as to whether the interests of the producer would be best served by the continuance of this system or by the Board itself taking over the complete physical handling of all eggs subject to the Act.

One effect of these conflicting views has been a complete change of personnel at each of the last two elections for Board membership. It will be seen by a reference to paragraph 3 of this Report, wherein is set out the personnel of the Boards since 1947, that over the period covered by the Terms of Reference to your Committee no member of the Board has been elected for more than one term of two years.

9. From 1943 to 1947 eggs were subject to Commonwealth control under the National Security Regulations and the Board acted solely as agent of the Controller. During this period the Board established several grading floors and pulping factories and was remunerated by commission for these services.

It was due to these additional activities that the responsibilities of the Board grew during the period it acted as agent for the Commonwealth, and when the Board resumed full control of Victorian eggs on the 1st January, 1948, it was faced with the necessity of providing additional capital to carry on its operations. Its difficulties in this respect were overcome to some extent by the fact that the Commonwealth Egg Controller

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accumulated certain surpluses and after the cessation of Commonwealth control these surpluses were distributed among the States. In this way the Victorian Board received £217,076. As there is no provision in the Act for the distribution to producers of any money obtained in this way, the said sum has been regarded as working capital and thus has facilitated the operation of the Board.

10. The general methods followed by Boards may be briefly summarized as follows:-

The price to producers for the various grades of eggs is determined by the Board, which withholds sufficient to provide for administration costs and to meet equalization losses which may occur from the export and pulping of eggs. \Vith the approval of the Governor in Council part of the proceeds may be diverted to a reserve fund-leaving the nett proceeds of the pool to be accounted for to the producer.

11. Your Committee will now proceed to deal with certain specific matters which arose during the regime of the Boards in office since 1947 and which had a marked influence on the industry.

THE HUGGINS BOARD-1947-49. 12. It is necessary to refer back to the Board in office prior to the election of the

Huggins Board, as it was the action of that Board which completely changed the set-up in the industry at the time.

In August, 1946, the Board cancelled the licences of fourteen of the Agents operating in the Metropolitan Area, leaving only four of the largest Agents to continue in business.

This was done with the object of setting up Board floors, and it was stated in evidence that by so doing-" the industry would be in a position to compare operations under the agent system with operations as a result of the Board conducting its own floor," also that "agents were operating at a profit'' and "the industry felt, as an economic proposition, that it was entitled to any profits which accrued from the handling of its product. The industry did not think it right to produce the article and then hand it over to somebody else ".

This action took place shortly before the elections for Board membership for the ensuing two years, and the Huggins Board was elected upon a platform of the abolition of the agent system and the eventual complete control of the industry by the Board.

13. Your Committee feels that, whilst the Board no doubt acted in good faith with a sincere desire to further the interests of the producer, it nevertheless acted without due regard to the physical capabilities of the Board itself to handle efficiently the intake at the flush season of production, namely, the months of August to November. Furthermore, the effect was to cause dislocation and dissatisfaction in that section of the industry which had been in the habit of forwarding its eggs to the Agent of its own selection and strongly resented the restrictions thus placed by the Board upon its freedom of choice.

CITY IcE AND CoLD STORAGE Co. PTY. LTD. 14. In December 1948, the Huggins Board entered into an agreement with City

Ice and Cold Storage Co. Pty. Ltd., to lease the first floor of premises at the corner of Clarendon and Grant Streets, South Melbourne, so that it might be used for the treatment and storage of egg pulp.

It was stated to your Committee that this action was taken because of the feeling of uncertainty by the Board as to the security of tenure of the then existing plants, which were situated at Ballarat, Bendigo and Brunswick.

In addition, W. Angliss and Co. {Aust.) Pty. Ltd. were producing pulp for the Commonwealth Government in a building at Footscray. This company desired to make use of the building in their meat business, but were being held to their contract.

Because of their fear of the· possibility of W. Angliss and Co. relinquishing the pulping business, and having regard to the high production figures at the time, the Huggins Board considered it was essential that this additional space be available to supplement pulping and storage plants already controlled by the Board.

It must be mentioned that the pulp trade was highly profitable, and considerable quantities of pulp were being supplied to the Defence Authorities at home and abroad. However, not long after the lease of the South Melbomne premises was effected, these orders began to diminish, thus reducing one of the Board's avenues of sale.

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15. It was not until 28th September, 1949, that the Board entered into possession of these premises at South Melbourne, but in the meantime a change in administration had taken place.

The elections held in January 1949, had resulted in the return of the Carter Board, of which not one elected member had been represented on the Huggins Board.

As can be readily appreciated, a change of policy accompanied the advent of the new Board, which considered that the South Melbourne premises were unnecessary for the requirements of the industry.

It is a fact that production had decreased, and in the opinion of the Carter Board the existing facilities at Ballarat, Bendigo and Brunswick were quite capable of handling the necessary pulping, particularly as the method of equalization had been altered. Export was being expanded with an accompanying reduction in pulping.

Therefore the Carter Board, by paying a consideration of £10,000, cancelled the agreement entered into by its predecessor.

The nett loss involved in the foregoing transactions was, according to figures supplied by the Auditor-General-

Rent paid Minimum freezing charge

Capital Expenditure­Plant Other

Cancellation consideration

Less rent from sub-letting

Nett Loss

£ s. d. 850 9 2

4,917 18 0

2,854 5 0 325 5 7

£ s. d.

5,768 7 2

3,179 10 7 10,000 0 0

18,947 17 9 1,644 11 6

17,303 6 3

16. The Auditor-General stated that he was unable to ascertain whether the loss resulted from a " change of policy, a bad error of judgment, or a combination of the two ".

Your Committee is of opinion that the Huggins Board may have over-estimated the capacity of the market to absorb pulp, but, in any case, the alteration in personnel of the Board at the next elections, which was accompanied by a change in policy, could also have been a contributory factor to the loss incurred.

THE CARTER BOARD-1949-51. 17. As has already been stated in this Report, the elections held in January, 1949,

resulted in a complete change of elected personnel on the Board. Three of the four successful candidates fought the election on the policy of the

conduct of the industry on the old basis, that is, the joint operation of Authorized Agents and of Board floors.

One of the first actions of the Carter Board was to terminate the services of Mr. H. F. Fox, the General Manager. Mr. Fox had been appointed in 1947 by the Huggins Board to succeed Mr. E. Cameron.

The reasons given to Mr. Fox for his dismissal, as set out in a testimonial by Mr. J. Carter, Chairman of the Board, and dated 12th April, 1949, were that it was "due to the decision of the Board that the office of General Manager did not have any advantages to the Board or to the producers, and consequently that the position should be abolished".

Carter stated in evidence that his Board considered that the members of the Board themselves should handle responsibility as a Board of Management, and that, provided the Board was served by an efficient staff, there was no need for the services of a General Manager.

18. A further reason given for the termination of the services of the General Manager was that the Carter Board proposed to, and in fact did, restore the licences of those of the Authorized Agents whose licences had been cancelled in 1946, and who desired again to engage in the handling of eggs.

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On this occasion the Authorized Agents were assured of some degree of security of tenure in that a clause in the agreement which each was required to execute with the Board provided for the continuance of the agreement for a period of five years.

19. The pool year which ended on 2nd July, 1949, resulted in a deficit of £61,503. The first portion of this pool year came under the administration of the Huggins Board and the latter portion, i.e., from February to .July, under the Carter Board.

In the course of his evidence the Auditor-General stated that it must have been apparent when the Carter Board took office that the Board was faced with substantial losses for the year. It is in the first half of the pool year that funds should be accumulated to make up for losses in the latter part of the year when the decline in production reduces the income of the Board from pool deductions below what 1s necessary to meet costs of administration, equalization charges, &c.

20. In view of the position confronting the Carter Board when it took office, a substantial loss over the pool year could have been avoided only by that Board reducing the returns to the producer during the autumn and winter periods. However, in the egg industry prices have always been higher in the autumn than in the spring and it will be readily appreciated that any move to reduce returns to producers at this time would be most unpopular in the industry.

The Carter Board not unnaturally desired to avoid the unprecedented step of reducing prices when eggs are scarce and the cost of production is high, but it went further and increased the return to the producer by reducing the pool deduction from one penny half-penny per dozen to one penny per dozen.

It thus budgeted for a loss with the intention of meeting such loss by drawing on the surpluses carried over from previous years.

In the opinion of the Auditor-General this practice is not in keeping with the intention of the marketing legislation.

Whilst there is no apparent justification for this action by the Carter Board, evidence was tendered to your Committee which disclosed that the Huggins Board had increased the price of eggs as follows :-

On 20th December, 1948, from 2s. to 2s. 4d. per dozen. On lOth January, 1949, from 2s. 4d. to 2s. 7d. per dozen. On 31st January, 1949, from 2s. 7d. to 2s. lOd. per dozen.

It was claimed by Carter that these increases were made mainly as gestures to the industry in the hope of gaining continued support at the January election.

Your Committee feels that there is much justification for the claim. These increases in prices above those provided for in the Budget and in a year when a loss was shown are open to the interpretation that they were adopted by the Huggins Board to improve its record shortly before the election.

21. The circumstances of the cancellation by the Carter Board of the agreement with City lee and Cool Storage Co. Pty. Ltd. have already been referred to in this Report.

These two instances illustrate the disadvantage of elections taking place in the middle of the pool year, with the result that a new Board taking office is obliged to complete the administration of a pool commenced by its prodecessor.

THE ROADLEY BOARD-1951. 22. The election held in January, 1951, saw a repetition of the happenings of the

1949 election. Again a change in the personnel of the Board occurred. The elected members of the Carter Board all went out of office and were replaced by four members of the one organization, viz., the National Poultry Farmers' Association, including George Hawthorne Roadley, who was President of the Association, and Clarence Aldous Hurst, who. was Secretary.

The Board was elected with the following as the main planks of its platform :­" A complete re-organization of the present marketing system on the lines

of New South Wales, where the industry has prospered so markedly in comparison with ours in this State.

To review the present top heavy Head Office Administration.

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Inspectorial Staff-During the past few years this Staff has been increasing. We propose to stop harassing the producers and give them decent prices and conditions to encourage them to co-operate with the Board in building a better industry."

(Note.-These extracts are taken from an election pamphlet issued by Clarence Aldous Hurst.)

23. Signs of disruption were not long in becoming apparent. In accordance with the provisions of the Act the members of the Board ·appointed

Roadley as Chairman, but immediate steps were taken, without avail, to bring pressure upon the other members of the Board to have the appointment upset. This pressure was exercised through the medium of the National Poultry Farmers' Association, and evidence disclosed that it emanated from Hurst, who was a dominating and outspoken figure in the industry and who, as the Minutes of the Board disclose, had actually supported this appointment of Roadley.

The influence to be exercised by this Association upon the operations and determinations of the Board was soon to be felt.

Matters of policy which unquestionably should be the subject of discussion inside the Board Room were predetermined by the executive of the Association.

Although this was denied in evidence by Roadley and Hurst, your Committee feels that it must accept the evidence of George Robert Boulton, the Government Nominee, and of Edgar Albert Piper, the Northern Zone representative. Indeed, Piper so resented this outside dictatorial attempt to control the Board that he ceased to be a member of the executive of the Association.

Furthermore, if the Board came to any decision which was not favourably received by the Association, immediate action was taken by the executive to endeavour to have that decision altered by bringing pressure to bear upon members of the Board.

THE " SODING " CASE. 24. On 23rd February, 1951, the present Board implemented Instruction 25, which

required that all transfers of eggs for sale as between Agents should cease and that eggs which were surplus to the requirements of the Agent were to be forwarded to a Board floor for re-grading and sale. In addition, no Agent was permitted to sell more eggs than the number he sold for the week ended 24th February, 1951.

Soding Bros., whose main establishment was in Melbourne, but who had branches at Castlemaine, Charlton, Colac, and Kyneton, was one of the Agents affected by Instruction 25.

The city floor handled mainly those eggs which it received from its own four country branches and which it sold to a group of consumers approximating 500 in all.

When the Instruction was applied to this firm it meant that all transfers from Soding Bros. country branches must be forwarded to Board floors. Thus the city floor of the firm was deprived of the bulk of its supplies and consequently lost its large group of customers who henceforth would be obliged to purchase their requirements from the Board.

The Board claims that it took this action with a view to ensuring that eggs forwarded from the country for sale in the metropolitan area complied with its standards of quality.

25. A further Instruction, No. 26, dated 15th March, 1951, provided that, if any loss on regrading occurred, the loss would be debited back to the Agent if the regrade exceeded Five per cent.

The Board's contention was that Agents, with a view to retaining the good will of the producers froni whom their supplies . of eggs were derived, inclined to the practice of " up-grading " of eggs. By " up-grading " is meant grading to a standard higher than justified by the quality of the eggs, in order to ensure the maximum return to the producer. ·

It was claimed by the Board that, on the receipt of these transfers from the Agent, regrading was necessary because the quality of the eggs was not equal to that claimed by the Agent in his returns. If on the regrade it was found necessary to " down-grade " the eggs, the Board was faced with a loss to the extent of the value of the difference in grades.

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During the first few weeks of the operation of these Instructions the Board claimed a loss on regrading of £8,300, and debited the respective Agents accordingly on the grounds that this loss, being due to faulty or incorrect grading by the Agents in the first instance, should be a charge against them instead of being borne by the Board.

The counter-claim by the Agents was that the Board had adopted these Instructions in furtherance of its declared policy during the election campaign, namely, to do away with the Agents. The agreements entered into with the Carter Board ensured the continuance of the agency system for several more years but it was contended that the policy of the present Board would be furthered by the imposition of restrictive conditions that would eventually make the position of Agents untenable and would force them to surrender their licences as Authorized Agents of the Board.

A further claim by the Agents was that these transfers took place during a warm spell of weather which caused a rapid deterioration in the quality of the eggs combined with the inevitable consequences of handling and cartage which could be responsible for a certain percentage of necessary down-grading.

In the case of Soding Bros., the Board debited them with £360 for the first transfer. Further debits to this firm resulted in a protest to the Board against the down-grading and an assurance by the Board that an investigation would be made and the report thereon considered by the Board at its next meeting in two weeks' time.

The view expressed by Soding Bros. was that a continuance of down-grading could readily result in a debit of some thousands of pounds in that period, and accordingly their resignation as an Authorized Agent of the Board was submitted.

This resignation was accepted by the Board. Subsequently, legal proceedings were taken by Soding Bros. against the Board, one

of the points at issue being a claim for the reimbursement of the sum of £500 which had been deducted from amounts due to Soding Bros. on account of losses incurred by the Board on regrading.

However, upon the Board receiving legal advice that it had no power to recover from the Agents the aforesaid losses on regrading, this matter was settled out of Court by the Board undertaking to pay to Soding Bros. the amount previously withheld.

Soding Bros. then sought re-instatement as Agents on the grounds that their resignation had been forced by an illegal action on the part of the Board, but their request was refused.

26. Your Committee feels that, in applying Instruction 25, the Board should have made an exception in the case of Soding Bros. Theirs was an exceptional case and special provision should have been made tberefor.

In all the circumstances your Committee considers that the Board acted harshly in this case but its action was beyond doubt one step towards the achievement of the avowed policy to " get rid of the Agents ".

Your Committee is of the opinion that if eggs are forwarded to Melbourne from country grading floors in very hot weather some loss in grade is inevitable even though the eggs were correctly graded in the first instance. It would be unjust if the country Agents had to bear this loss.

On the other hand your Committee recognizes that there is an opportunity for an unscrupulous Agent to up-grade eggs to secure the good will of producers with the knowledge that any loss will be borne by the Board.

Your Committee feels that this difficulty could be overcome by thorough and more frequent check inspections of grading at country Agents' floors and by cancelling the licences of Agents found to be incorrectly grading.

Representatives of the Agents who gave evidence before your Committee stated they would be in agreement with any such policy on the part of the Board.

INTERSTATE TRADING BY A BOARD MEMBER. 27. The Act excludes from its operation all eggs which are the subject of interstate

commerce between the States, or as are required by producers for· the purpose of such trade, commerce or intercourse, or as are intended by the producers thereof to be used for such trade, commerce or intercourse. This exclusion is required because of the provisions of Section 92 of the Constitution.

Although interstate trade is lawful it is generally considered by the producers to be against their interests as it tends to affect the otherwise controlled marketing by the Board.

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The simplest case is the sale within Victoria of eggs produced in other States. As no deductions for equalization or otherwise are concerned, it is evident that the dealer can pay the producer more than the nett Board price and still be able to show a profit on his transactions.

28. It was freely admitted in evidence given to your Committee by Carlie Samuel Gustav Nettelbeck, a member of the present Board, that he was knowingly taking advantage of evasion of the Act and that the other members of the Board had full knowledge of the extent of his activities.

Nettelbeck informed your Committee that for some years he had been in the habit of purchasing eggs for re-sale from an agent in Pinnaroo, a town in South Australia, five miles from the Victorian border. Nettelbeck further stated that he was aware that Victorian eggs were taken to Pinnaroo and sold there to the said Agent.

The witness pointed out that these activities were within the law as the Victorian marketing Act does not affect interstate trading. Indeed it was contended that the practice of selling eggs in Victoria to South Australian or New South Wales agents as a purely paper transaction enabled such eggs to be re-sold in Victoria as interstate eggs without ever going outside the bounda!'ies of this State. This contention has been rejected by the High Court in the case Carter v. Queensland Potato Marketing Board.

Nettelbeck further stated that it was generally known in the egg industry that he was engaged in interstate trading.

However, no mention was made of it in the National Poultry Farmers' Association election propaganda. It is interesting in this regard to quote the following head-line from a pamphlet issued by Hurst :-" How long are you going to let the merchants and chilled egg speculators run your business and control your markets ".

Your Committee is of opinion that despite any justification by Nettelbeck of his actions on the grounds of legality, his position as a member of the Victorian Egg and Egg Pulp Marketing Board rendered such actions injudicious in a marked degree, particularly in view of the provision in the Agents' agreement with the Board prohibiting them from handling eggs other than eggs vested in the Board.

If others engaged in this practice to any extensive degree it could become so comprehensive as to lead to a complete break-down in the Victorian marketing legislation.

29. A further matter concerning Nettelbeck was brought before your Committee. This member of the Board has also been engaged for many years in the handling,

as an agent for a South Australian firm, of preserved eggs for re-sale, mainly to pastrycooks. On one occasion since becoming a member of the present Board N ettelbeck found

himself in possession of 120,000 dozen preserved eggs which, owing to staff shortages in his own business, he found difficulty in handling. He approached the Production Manager of the Board with the view of obtaining the services of a second-hand grading machine. In Roadley's evidence it was submitted that a loan of a machine was sought but Nettelbeck stated that he desired to purchase the machine. However, the Production Manager suggested that, as the Oakleigh floor was not fully occupied, the grading could be done there by the Board's staff as a business proposition at an agreed charge of ld. per dozen. Approximately 300 cases were put through this floor until pressure of business in regrading Board eggs caused the arrangement to be terminated.

This handling of Nettelbeck's eggs at the Oakleigh floor was done firstly with the approval of the Chairman of the Board, and subsequently with the approval of thew hole Board.

Your Committee considers that there is a grave doubt as to the legality of the Board's power to grad? eggs 'Yhich were. not its property a~d which it ~as not going to purchase. The Boards functwns are With regard to Vwtonan eggs whwh are vested in it under the provisions of the Marketing of Primary Products Acts.

Also, the use of the Board's facilities to further the interests of a member of the Board engaged in interstate trading is open to severe criticism.

DECLINE IN PRODUCTION DURING 1951. 30. The only figures available to your Committee regarding the Victorian production

are those furnished by the Board and these figures show a decline in production which although general throughout Australia, has a marked application so far as Victoria~ figures are concerned.

A table of production figures for Australia, compiled by the Australian Egg Board from information furnished to it by the various States, is set out hereunder. '

14

CoMMERCIAL EGG PRODUCTION (IN DozENs) CoNTROLLED BY STATE EGG MARKETING

BOARDS AND THE RELATION OF SUCH PRODUCTION IN EACH STATE TO THE TOTAL

AusTRALIAN CoNTROLLED PRODUCTION. -

- I 1947-48. 1948-49. 1949-50. 1950-51.

New South Wales .. 50,413,913 52,051,756 52,269,593 50,444,941

Queensland .. . . 9,660,737 12,143,885 11,176,439 10,858,463 I

Victoria .. . . .. 36,242,513 32,841,873 29,984,650 25,573,229

South Australia .. .. 14,618,996 14,114,941 13,088,729 11,662,900

Western Australia .. 7,497,239 7,939,199 7,652,926 I 7,436,331 I

Tasmania . . .. 842,365 1,117,382 1,514,240 I 1,296,509

Commonwealth Total .. 119,275,763 120,209,036 I

115,686,577 I 107,292,573 I I

-

It is significant that the greatest fall in production figures IS shown to be m Victoria which has the largest equalization deductions.

Charges operative on consignments to Boards m each State for 1951 are as follows:-

Pool Deduction. Handling Charge.

d.

New South Wales 4

d.

31

2! Queensland

Victoria 3

South Australia

8!*

1 3£

Western Australia 4 2

Tasmania 4!

• In September 1951, this charge was reduced by threepence.

31. Your Committee was informed that the drop in Victorian production figures may be apparent rather than real and that it would not be unreasonable to suspect that wholesale evasion of the requirements of the Act caused by the high equalization charges might well account for the substantial drop in production figures.

The amount of the equalization charges provides a margin whereby the unscrupulous trader is enabled to offer an inducement to the producer to sell direct to the trader instead of marketing his eggs through the authorized channels.

Corroborative evidence was submitted by Mr. R. C. Blake, Chief Executive Officer and Superintendent of Exports, Australian Egg Board, who said :-

" Actually I do not think the decline is as serious as the figures show. My own personal view is that with the imposition of heavy charges for equalization purposes this year there has been a sharp and pronounced drop in the intake of the Board. I am quite convinced that, in Victoria, large numbers of producers are selling their eggs without revealing the fact to the Board. I think that accounts for quite a large proportion of the trouble."

15

Evidence was submitted to your Committee by a number of witnesses to the effect that the following factors were responsible, in part, for the decline in production over recent years:-- ·

{a) The high cost of production was instrumental in forcing a number of the smaller or part-time producers out of the business ;

(b) The enhanced prices prevailing for real estate offered an inducement to those producers whose properties were situated in the rapidly expanding outer Metropolitan areas to dispose of their holdings for subdivisional purposes.

Whilst it appears from the figures submitted by the Board that there has been a decline in production in Victoria it is significant that there also has been a decline in sales by the Board over the same period.

In both New South Wales and South Australia sales have increased which seems to give added weight to the contention that the apparent drop in Victorian production figures is in part due to sales taking place outside the control of the Board.

PRODUCER AGENCY SYSTEM. 32. The following details of the "Producer Agency System" were supplied by the

Secretary of the Egg and Egg Pulp Marketing Board at the request of your Committee :--"A Producer Agent is a producer of eggs, whose flock's production is

exempted from delivery to the Board and who is permitted by written authority of the Board to dispose of such production---on the Board's behalf--by direct sale to retailers and/or consumers. The Producer Agent is obligated to account to the Board for disposal of production. During the period between the election to the Board of the members of the first session on 15th February, 1937, and the commencement of operations on 16th August of the same year, the Board, by advertisement and circular, invited producers to apply for the right to sell eggs on the Board's behalf. Prior to Board control many producers had built up a business of direct selling and the privilege of retention by these producers of this right--together with that of a convenience to producers whose production could not economically be delivered to the Board--was the basis of the Board's intention to inaugurate the system. During the inaugural period the Board was assisted by the Producer Agency Officer of the New South Wales Board, Mr. McKie. The system was modelled on New South Wales procedure and similar records were used in Victoria.

During the war period and indeed during the whole of 1947 the Board's inspectorial and Producer Agency departments were subject to the control of tlie Deputy Controller of Egg Supplies.

Approximately 2,500 Producer Agents held licences as at October, 1947, and during the whole of that year 644 permits were surrendered for the following varied reasons :--

{a) The sale of farms as a going concern. {b) Disposal of flocks. (c) Reduction of flocks to less than 40 adult female domesticated fowls. {d) Death of the permit holders. {e) Produ,ction wholly transferred to another member of the Producer's

family. (j) Production wholly delivered to the Board.

No Producer Agencies were terminated by the Deputy Controller for infringement of the regulations or conditions of appointment."

33. Statistics for the period 1st January, 1948 (the date the Board resumed control of the industry), to August, 1951, are as follows:--

-- 1948. ! 1949. I 1950. 1951

(to August).

Authorities surrendered for similar reasons to those previously set out . . . . .. . . . . . . 670 432 303 213

Board cancellations . . . . .. . . . . 158 168 40 1 Right to sell restored upon payment of outstanding indebtedness

and on assurance to Board of no future breaches .. 35 31 22 11

16

Producer Agents who conducted poultry farms within a twenty-five miles radius of the General Post Office, Melbourne, number 909, whilst those outside this radius number 483, total 1 ,392.

An analysis of the ownership and/or control of flocks by these Producer Agents is set out hereunder.

Ownership and/ or control of-300 birds or less 301 birds to 500 birds 501 birds to 800 birds 801 birds to 1,000 birds

1,001 birds to 1,500 birds More than 1,500 birds ..

Total at 20th August, 1951

602 Producer Agents. 224 Producer Agents. 219 Producer Agents 114 Producer Agents 109 Producer Agents 124 Producer Agents

1,392 Producer Agents

34. It is, and has been, generally acknowledged that theoretically the system of Producer Agents is sound and has much to commend it in the orderly marketing of eggs. In practice it relieves the Board of the physical handling of a large proportion of the production of flocks owned by Producer Agents. (In many individual instances Producer Agent production exceeds private sales during the flush period of production-J uly to December}. It also has the advantage of short-circuiting the true production of Producer Agents to consumers.

The system has one serious disadvantage-it conduces to an evasion of funds legally payable to the Board. The original accounting records are prepared by Producer Agents, and opportunity is presented for improper practices.

35. Your Committee ascertained in New South Wales that the Producer Agency system operates satisfactorily in that State, possibly on account of the efficient check which is kept on the Producer Agents' activities.

These Agents are required to forward to the Board monthly returns setting out their total production and the manner of its disposal. They are only permitted to sell their eggs to customers approved by the Board, which must be assured of the Agents ability to provide continuous supplies throughout the year to these customers. If necessary, the Agent can purchase eggs from the Board to preserve this continuity of supply.

A comparison between the Agent's production and the size of his flock, together with any variation in his monthly returns will readily disclose to the Board any irregular practices on the part of that Agent.

In Victoria similar returns are required of Producer Agents but the weakness in the system is that the Producer Agent may sell to whomever he chooses and a thorough check apparently is not made as to the correctness of his returns in this regard.

A restriction on sales to approved retailers only would enable the Board, as in New South Wales, to keep a close check on all the Agent's transactions.

THE BUDGET FOR 1951-1952. 36. An examination of the Budget prepared by the present Board for the pool year

1951-52, i.e., July, 1951, to June, 1952, disclosed the fact that .it was based upon an added sale in Victoria of no less than 2,300,000 dozen eggs, as compared with the previous year.

When questioned upon the Board's reasons for this assumed increased consumption Roadley pointed out that the average annual consumption in Victoria per head of population was at a much lower figure than that in other parts of the world, notably the United States of America where the consumption, according to Roadley, was between 350 and 400 per person per year. .

The present Board therefore was of opinion that there was room for considerable improvement on the home market and decided that it would embark on an extensive press and radio campaign to educate the people to eat more eggs.

The Budget apparently was framed on the assumption that this campaign would be successful.

Your Committee was advised that a budget cannot be based" on somebody's nebulous ideas of increasing local sales." If necessary, variations can be made in the Budget to meet the position if it is found later in the season that sales have increased.

17

Any losses which oecur through faulty budgeting must necessarily be made good from the Board's funds which in the final analysis belong to the producers.

It was alleged that the Budget in question constitutes an unnecessary gamble with the producers' money.

At the time of the compilation of this Report the Board's experience has been that, notwithstanding its intensive sales promotion campaign, actual sales of eggs have shown a pronounced decline.

This may be explained by a variety of reasons but the fact remains that the Board's expectations of increased sales upon which the Budget was based, have not yet been realized and the flush period of production is drawing to a close.

37. Your Committee feels that attention should be drawn to the action of the Chairman, Roadley, in seeking advice upon the proposed Budget from a source outside the Board.

The Budget proposals were compiled by officers on the staff of the Board and Roadley, acting upon his own initiative and without the authority of the Board, sought the advice of Mr. H. F. Fox, ex-General Manager of the Board, on several aspects of the estimated equalization accounts and the oash budgets fm· the 1951-52 pool year.

This. action by Roadley aroused concern amongst the staff of the Board in view of serious leakages of information which had occurred from time to time.

However, the Chairman refused to accept leg?-1 advice that this approach to Fox was improper and he assumed full responsibility for his actions in this regard.

It was stated in evidence by Roadley that the Board approved of his thus seeking advice, nevertheless, a perusal by your Committee of' the official Minutes of the Board disclosed that a motion was moved by Hurst endorsing the Chairman's action in seeking outside advice upon the Budget but the motion lapsed for want of a seconder.

INSPECTORS' REPORTS AND PROCEEDINGS THEREON. 38. The following information was furnished by the· Chief Inspector of the Board

at the request of your Committee :-

"NuMBER oF PRODUCER AGENTS WHo FuRNISHED FALSE RETuRNs AND ATTEMPTED To DEFRAUD BoARD OF PooL DEDUCTION.

1949. Hl50. 1951 (to date).

7 23

DISCIPLINARY ACTION ORDERED RE ABOVE FIGURES-PRODUCERS' AGENCIES CANCELLED.

19411. 191\0. 1951 (to date).

5 10 Nil

PRODUCER AGENTS. PROSECUTED FOR FURNISHING FALSE RETURNS.

11149. 1950. 1951 (to date).

Nil 1 Nil

During 1951 the Board cancelled the authority of one Producer Agent whose monthly returns were nine months outstanding a:n.d· ref~rreel: the: matter to Solicitors.

10581/51.-2

18

NUMBER OF PRODUCERS (NOT PRODUCER AGENTS) WHO SOLD EGGS ILLEGALLY AND BY so DoiNG TRIED TO DEFRAUD THE BoARD OF PooL DEDUCTION.

Hl49. 195(!, 1051 (to date).

29 36 18 I

NUMBER OF ABOVE PRODUCERS PROSECUTED. -~~-·---------------------------------------

1949. 1950. 19!>1 (to date).

4 13 Nil

FAILURE TO FURNISH RETURNS.

During 1949-50 a large number of Producers whom it was thought had sold eggs illegally were ordered under Regulation 37 to furnish a return showing production and disposals of eggs during periods specified on the notice or order.

During 1949 five producers who failed to furnish such a return were prosecuted and in 1950 eleven were also dealt with in the same way.

To date 1951 only one producer has failed to furnish a return and an instruction has been given to the Board's Solicitors to institute necessary legal proceedings."

39. When questioned upon the failure by the present Board to take action against producers for breaches of the regulations, Roadley admitted that there was considerable pool evasion but stated that the policy of the Board was that " it was far better to get the co-operation of the producers rather than try to force them to do something."

The apparent decline in production in Victoria can be traced, in part, to this attitude on the part of the Board which has the effect of encouraging producers to seek avenues for the disposal of their eggs which are not disclosed to the Board and in the knowledge that if found out the Board is unlikely to take action against them.

Your Committee is of opinion that, in view of the overwhelming evidence of wholesale evasion of the Act, this is evidence of weak administration and has its source in the previously mentioned influence exerted over certain members of the Board by the National Poultry Farmers' Association. These members, namely Roadley, Hurst, and Nettelbeck, who form a majority on the Board, presumably feel that their pre-election pledge " to give the producers a fair go " entails the non-enforcement of those of the Board's regulations which the producer chooses to flout.

Another effect of this attitude of the Board is that there is little encouragement for its inspectorial staff to act diligently in the discharge of their duties. Your Committee casts no reflection on the inspectorial staff but if their detection of breaches of the regulations were supported by appropriate action being taken against the offenders, it would conduce to greater interest and efficiency on the part of the staff.

In New South Wales the Board automatically orders prosecutions in all cases where recommended by the Chief Inspector.

ISSUE OF " INSTRUCTIONS " BY THE BOARD.

40. The Board from time to time issues what are styled " Instructions " to those engaged in the industry.

Whilst the majority of these Instructions are merely directions regarding methods of procedure as determined by the Board, others relate to matters which are the subject of Regulations.

One Instruction, namely No. 26, mention of which has been made in Paragraphs 24 and 25 of this Report, was ruled by the Board's legal advisers to be beyond the powers of the Board. Notwithstanding this experience the Board has since issued an Instruction first and obtained legal advice upon it afterwards.

19

It is apparent that the 1951 Board has acted unwisely in not ascertaining the legal position before issuing Instructions which later may be upset upon the grounds of their illegality.

In addition, any Instruction which is in effect a Regulation, is entirely beyond the powers of the Board.

An illustration in this regard is Instruction No. 38, issued on 30th July, 1951. This Instruction altered the definition of " First Grade Hen Egg," but the grades of eggs are defined in Regulations approved by the Governor in Council and can only be amended by obtaining a similar approval.

CARTER BROTHERS. 41. The Carter family's component parts, with their registered flocks in September,

1950, are-(a) Carter Bros.-50,000 adult fowls and 28,000 birds under six months old. (b) John Carter-9,000 adult fowls and 5,000 birds under six months old. (c) Roland Carter--6,000 adult fowls and 4,000 birds under six months old.

The very magnitude of their total undertakings exercises an undeniable influence on the industry. The Carter family managed their own affairs for many years and their attitude of resentment at what they feel is interference by the Board in the conduct of their business is quite understandable.

It is also feasible that they should have their supporters and their critics, and, of course, this has led to the formation of two of the factions in the industry.

James Carter has been a member of several Boards including, as mentioned earlier in this Report, the 1949-51 Board. His policy since the first Board was constituted always has been for a continuance of the system of Authorized Agents as opposed to the policy of that section of the industry-by no means a small section-which favours the Board itself taking over the complete physical handling of eggs.

42. Carter Bros. have been the subject on numerous occasions of legal proceedings by the Board for various breaches of the Marketing Acts and the regulations thereunder and many of these proceedings have been resolved in favour of the Board.

Allegations were made before your Committee that, even during his term of office as Chairman of the 1949-51 Board, James Carter was guilty of evasion of the Act, of defying the Board and of engaging in speculation.

43. A report from an Inspector of the Board regarding John Carter's activities smce 1st January, 1948, is summarized as follows:-

(a) Producer Agents licence granted 21st April, 1948; (b) Licence cancelled 8th December, 1948, for failure to keep . records of

production and disposal of eggs in accordance with his agreement ; (c) 12th April, 1949, licence again granted; (d) 24th September, 1949, licence cancelled for failure to fully account for

eggs sold; (e) 23rd February, 1950, prosecuted and fined for selling eggs without authority; (j) 23rd February, 1950, fined for failure to complete and return Form 5 (which

gives record of where eggs are disposed of); (g) 8th March, 1950, application made for re-appointment as Producer Agent

but rejected by the Board ; (h) 12th October, 1950, prosecuted for illegal sales of eggs but case dismissed

on ground that the information did not contain proper particulars ; ( i) 19th December, 1950, again prosecuted after successful appeal by Board

to Supreme Court and fined on several charges of illegal disposal ; (j) 5th March, 1951, application again made for re-appointment as Producer

Agent but rejected by Board in view of previous abuse of privileges.

44. For the period 1st July, 1950, to 30th June, 1951, it was stated in evidence that Carter Bros. admitted production was 431,181 dozen eggs. On the basis of their flock in September, 1950, that would represent an average production of 103 eggs per bird per year.

20

In the case of John Carter, for the same period, his production, according to the records of the Board, was 81,205 dozen eggs or an average of 108 eggs per bird, whilst Rola.nd Carter's figures were 16,880·8 dozen eggs or an average of only 33 eggs per bird.

The cost survey of the Cofil.monwealth Bureau of A-gricultural Economics is based on an average production per bird per year of 144 eggs and it will be seen that the Carter family's admitted production falls far short of that figure.

It was submitted to your Committee that the only conclusion that can be drawn from the afore-mentioned comparison is that Carters were selling eggs elsewhere than through legitimate channels and were evading pool deduction by not disclosing their total sales to the Board.

45. Carter Bros. have a licence granted by the Department of Commerce to grade and pack eggs for export. Allegations were made to your Committee that for the last export season this firm submitted 4,535 cases of eggs of which only 1,611 were accepted by the Department for export. Rejections of eggs submitted from all packing floors in the State, other than Carter Bros., amoll:nted to 7 ·51 per cent. of the total pack, whereas the rejections in the case of Carter B;ros. amounted to 64·47 per cent. The rejection of Carter Bros. eggs in this instance involved the Board in a loss of £933 7s. 6d., as eggs submitted for export and subsequently rejected are paid for at First Quality Hen prices.

It was suggested that the figures mentioned show that Carter Bros. favour themselves at the expense of the other producers.

46. Further allegations were made against Carter Bros. of speculating in eggs by putting them away in cool storage during the flush season and selling them when prices were high in the winter months.

47. James Carter, of Carter Bros., denied all the allegations made against his firm. He categorically denied the charge of speculating in eggs and blamed the high

percentage of rejection of eggs for export in the case mentioned upon labour troubles at his farm at that time. He further pointed out that the deliberate submission of an undue quantity of eggs not suitable for export would be foolhardy as it would render his export licence liable to cancellation by the Department of Commerce.

His explanation of the disparity between his returns to the Board and the production figures expected of his flock was that, firstly, the size of his flock was only approximated and was decreasing by a daily mortality of about 30 birds, and secondly, that large quantities of pulp from his own pulping plant at Werribee were sold to an Agent in Sydney. As they were for interstate trade, Carter claimed that the eggs pulped for this purpose were not subject to Board control.

48. Efforts have been made from time to time by the Board to investigate Carter Bros. establishment at \Verribee but they have been frustrated by the refusal of the firm to allow the entry of Board Inspectors.

It is apparent that there is a suspicion in the industry that the Carters are committing breaches of the Act and the regulations and this feeling re-acts to the dis-advantage of the Board. Other producers are tempted to practice evasion on the grounds that if the largest producers in the State can do so why should not they.

In the opinion of your Committee the position can only be dealt with satisfactorily by widening the powers of the inspectorial staff in order that they may investigate all premises used for the production or storage of eggs and egg pulp. In cases where flagrant breaches of the Act or regulations are detected the offenders should be prosecuted with the utmost severity.

THE GENERAL MANAGER. 49. The present Board decided to revive the position of General Manager which

had been vacant since the dismissal of Mr. H. F. Fox by the Carter Board in 1949. According to the evidence presented to your Committee the Roadley Board in the

first. instance selected a Mr. Gill who was Manager of the Greensborough Floor of the United Poultry Farmers' Co-operative Society Ltd. However, on being supplied by the Minister of Agriculture with certain information regarding the political affiliations of Mr. Gill, the Board reversed its decision and cancelled the appointment.

Resentment was publicly expressed by Roadley and Hurst at this interference by the Minister in the administrative· activities of the Board, but both declared in evidence that the Board itself, upon receiving the information concerning Mr. Gill, would not appoint him unless he could clear himself of the accusations levelled against him.

21

At a Board Meeting on 8th May, 1951, the Chairman, Roadley, suggested that because of the d~elopments respecting Mr. Gill's appointment and in view of the necessity for the immediate services of a General Manager, he was prepared to fill the position himself in a temporary capacity.

This suggestion was adopted by the Board and Roadley was unanimously appointed General Manager at a salary of £1,000 per annum-this office to be held in addition to that of Chairman of the Board.

50. A repetition of events which occurred upon the appointment of Roadley as Chairman of the Board followed upon his appointment as General Manager.

Although the Minutes of the Board reveal that no dissentient voice was raised against the appointment, Hurst immediately protested to the Minister of Agriculture and personally organized protest meetings among those engaged in the industry. Nothing was achieved by these protests.

The appointment of Roadley has been adversely criticized upon the grounds that applications for the position were not sought by public advertisement and that it was made as a matter of expediency without any due regard to the qualincations and fitness of the Chairman to fulfil efficiently the duties required of a General Manager.

A Mr. Mayo, General Manager of the Western Australian Egg Board, was then appointed to the position in spite of a request from the Minister of Agriculture that no major appointments be made pending the result of the enquiry by your Committee. It was pointed out to the Board that as a result of the said enquiry a re-organization of staff might well be recommended which could affect the position of General Manager or any other of the executive officers.

It is worthy of note that Boulton and Piper recorded their dissent to the motion relating to Mayo's appointment.

On the 25th July, 1951, a communic~tion was received by the Board from Mr. Mayo desiring the deferment of his appointment until after your Committee's findings were made public.

Still in disregard of the undesirability of major staff changes at this stage the Board asked Mayo to reconsider his decision, but on 30th July he declined the appointment.

Up to the time of the changes effected by the passage of the Egg and Egg Pulp Marketing Board Act 1951 Roadley continued to occupy the position of General Manager in addition to that of Chairman.

STAFF. 51. The staff-of the Board has no security of tenure. It is engaged by the Board

for such periods and upon such conditions of employment and remuneration as the Board deems desirable.

It was made apparent to your Committee in evidence that the constant threat of the biennial elections bringing about a change of personnel on the Board, with an almost certain change of policy, as has been the case since 1947, has engendered a feeling of uneasiness among the employees of the Board.

The Government Nominee on the 1951 Board, Boulton, gave evidence that the policy of at least some of the elected members was that " senior members of the staff who did not conform to the ideas of the administration of the new Board were to be dispensed with and certain junior members appointed to senior positions."

Members of the staff are, and have been, subject to pressure by aspirants to Board membership for their own private ends or those of the organitation to which such aspiring members belo~. If members of the staff succumb to such pressure it is only natural that they shalT' anticipate an ultimate return for past services rendered.

On thP; other hand, faithful service to one faction may disqualify from advancement by the opposing faction should it gain the day at a subsequent election.

Evidence as to actual happenings with regard to matters mentioned in this paragraph was submitted to your Committee.

52. When the present Board took office it appointed a Co-ordinating Committee which consisted of two junior members of the staff, namely, Messrs. Mapperson and Ferris, together with a person who was not an employee of the Board.

22

Upon the appointment of Roadley as General Manager of the Board the Co-ordinating Committee was terminated, but Roadley in his new capacity as General Manager appointed these two junior officers to senior positions on the staff of the Board. Mapperson was appointed Assistant General Manager and Ferris was appointed Regional Manager.

On 12th June, 1951, the Government nominee, Boulton, moved that these two officers be returned to their previous positions as the General Manager had not the right to make such appointments without reference to the Board. Piper seconded the motion, which was carried, and Mapperson and Ferris were ordered to revert to their previous positions.

At a meeting on 11th July, 1951, Piper, desiring to leave the meeting before its conclusion, f'nquired of the Chairman if there were any further business of a controversial nature. Upon being answered in the negative he left the meeting. Later Boulton left the meeting after having been informed by the Chairman that no further business remained for discussion.

Notwithstanding these assurances, the remaining members of the Board, namely, Roadley (Chairman), Hurst, and Nettelbeck, then passed a motion re-instating Mapperson and Ferris in the higher offices to which they were previously promoted.

The explanation given by Roadley was that "if any Board member leaves before the conclusion of the meeting, it is his (the member's) responsibility if further business takes place."

Roadley knew that Piper and Boulton were opposed to these promotions and, m view of the assurances given by him to these two members, his action, as Chairman, m accepting the afore-mentioned motion, was most improper.

53. Allegations were made to your Committee that Mapperson, whilst an employee of the Carter Board, supplied Hurst with confidential information which assisted Hurst and the National Poultry Farmers' Association in preparing for the 1951 election. Although Hurst denied on oath that he had received any information concerning the rolls of registered producers or which otherwise was of any assistance in the elections, your Committee rejects his evidence and accepts that of Piper, who gave evidence that Hurst openly boasted in his presence that he was receiving from Mapperson all the information he sought.

The inevitable conclusion to be drawn from the foregoing is that for the pre-election assistance given to members of the present Board, an employee of the Board received preferment to which he was not otherwise entitled.

One member of the Board, Piper, apparently felt so strongly on the matter of the afore-mentioned re-instateme~ts that he wrote to the Minister of AgricuJture disassociating himself from the Board's actwn.

Your Committee deems it most undesirable that the staff should "play egg politics" and regards the Board's actions concerning Mapperson's appointment in an unfavourable light. This appointment could not but create staff discontent and foster breaches of duty on the part of the staff.

54. Further evidence tendered to your Committee disclosed that the present Board has not availed itself to the fullest extent of the skilled services of its executive officers. Most of these officers are admitted to be highly trained and efficient, but the Board, during the few months in which it has been in office, has shown a marked tendency to disregard the advice of its own experts and formulate its own decisions whether they be based on sound premises or not.

Certain allegations of improper practices were made by Hurst against the Production Manager, Touhy. He averred that an agreement existed between Touhy and certain large producers to put their eggs straight into pulp at first qualit,.prices. Touhy denied on oath that any such agreement existed either verbally or in writing and your Committee could adduce no evidence to substantiate Hurst's allegations.

Until the present Board assumed office on the 15th February of this year it was the established practice for the Secretary of the Board to control the staff. Subject to endorsement by the Board he made appointments and promotions and effected dismissals, but these responsibilities of administration were assumed by the Board. Furthermore, evidence disclosed that the Secretary has been subjected to continual insults by Hurst, both at Board Meetings and in tP,e presence of other members of the Staff.

23

PRICE FIXATION. 55. The Egg and Egg Pulp Marketing Board acts as its own price :fixing authority. It determines the price at which eggs shall be sold to the retailer, who then adds

the margin as determined by the Grocers' Association of Victoria. This margin is fixed on the basis of the percentage of losses and, of course, varies

according to rises or falls in the price of eggs. At present a margin of six pence per dozen is added to the wholesale price of three shillings and nine pence fixed by the Board, and it can be appreciated that the higher the Board price the greater the margin determined by . the Association.

It was rather naively stated in evidence by Carter that the policy followed by his Board was to fix "a price that the public will pay."

However, it can be assumed that the general policy is to endeavour to obtain a price that will ensure an adequate return to the producer, having regard to his costs of production. The object of the present Board is to attempt to maintain a steady price throughout the whole year in order that the returns to the producer during the flush months of production will serve as some recompense for the reduction of his income in the autumn and winter when production is low and cost of production relatively high.

56. It does not seem equitable to your Committee that the producer who purchases practically all the requirements of his undertaking on a controlled market should be free to sell his products on an uncontrolled market.

The prices of his main poultry feed requirements, namely, wheat, bran, and pollard, are all subject to price control, as also are his building materials.

Your Committee is of opinion that some measure of price control should operate in the egg industry.

A system whereby the Board is permitted· to continue to fix its own prices, subject to the over-riding authority of the State Prices Decontrol Commissioner, if he deems it desirable to exercise that authority, would appear to your Committee to be worthy of consideration.

PURCHASE OF PLANT. 57. It was disclosed in evidence before your Committee that the Roadley Board

ordered a number of grading machines apparently in the anticipation that extension of the physical handling of eggs by the Board would necessitate increased plant to deal with same.

No evidence was offered to your Committee as to where the Board proposed to install these machines, but the Government Nominee on the Board, Boulton, expressed his opinion that some members of the Board " had a fear complex that the merchants might dispose of their agreements in one fell swoop and then they (the Board) would have these grading machines to fall back on."

The total purchase price of these machines was stated to be £18,000 and eight were of the type known as " Libra " machines.

Your Committee had the opportunity of inspecting the " Libra " machine in operation-at Gawler, in South Australia, and at the 'Vatsonia floor of the United Poultry Farmers' Co-operative Society Ltd.

This machine is manufactured in Holland and considerable differences of opinion have been expressed as to its efficiency. The machines your Committee saw in operation had been subjected to a number of alterations and improvements.

The present users of these machines claim them to be operating very satisfactorily and it may well be that any criticism is directed against the machine originally manufactured, as distinct from the machine in its altered and improved state.

THE EXPORT POSITION. 58. By virtue of an agreement between the Commonwealth Government and the

British Ministry of Food, eggs surplus to the requirements of the Australian market are exported to the United Kingdom.

Total shipments of eggs in all forms to the United Kingdom in 1949-50 and 1950-51 did not exceed 2! million cases and, with the object of expanding these exports, a price of 3s. 3d. per dozen (Australian currency) was offered to and accepted by the Commonwealth Government for eggs in shell. This price represented an increase of eight pence per dozen on the previous price.

At the time this price was agreed upon it was considered a reasonable one. However, having regard to the increasas in the costs of production, the export price is now too low and is resulting in heavy losses to the industry.

There can be no question of the fact .that, because of the unprofitable price for export, local consumers are required to pay more for eggs, and to this extent are subsidizing export.

Many witnesses gave evidence to your Committee that the export trade is uneconomic -and unprofitable, and expressed the view that the industry would be in a much better position if the home market could be expanded to the ultimate exclusion of any exportable surplus.

This contention is unanswerable, but, in the present state of the industry, export is necessary to prevent unmanageable surpluses accumulating during the flush production season. Accordingly your Committee is of opinion that the Commonwealth Government should ensure that the price agreed upon with the United Kingdom should be such that, at least, no loss is suffered by the industry.

NEW SOUTH WALES EGG BOARD. 59. Your Committee was impressed with the efficiency of the organization of the

egg industry in New South Wales. The Board in that State is comprised of five producer members elected for a term

of three years by registered producers who own 150 or more birds. In addition, there are two Government representatives.

The physical handling of eggs is the responsibility of the Board and there are no agents.

The harmony which exists in the industry is typified in the fact that the present Chairman has been a member of the Board for a period of nine years.

In these circumstances continuity of policy is assured and as a result the Board has been able to embark on a long-term policy of expansion of its activities.

Your Committee inspected the premises of the Board, situated at Lidcombe and Pyrmont.

At Lidcombe the Board has occupancy of a site of 21 acres upon which it has erected modern and well-equipped buildings comprising grading and candling floor, case­making factory and filler factory. In addition, the Board has its own pulping plant and its own drying plant. Cold storage premises to provide for the complete requirements of the Board are now in course of construction.

Staff amenities are provided in the shape of a well equipped canteen and dining room.

Finance for the erection of these buildings and plant has been arranged by way of bank overdraft which, it was stated, will be paid off within four to five years, by means of a levy of one half-penny per dozen on all eggs handled by the Board.

SOUTH AUSTRALIAN EGG BOARD. 60. The Board in South Australia is appointed by the Government and consists of

six members, of whom three are producer members, one represents wholesale interests, one represents retail interests and one is an officer of the Department of Agriculture, who is Chairman.

The Board is appointed for a three year term and the original Board appointed in 1941 is still operating.

The South Australian Act precludes the Board from setting up any floor of its own without the prior consent of the Minister, but since the inception of the Act this consent has not been sought by the Board.

Agents receive eggs and grade and pack or pulp them. For this service they receive a handling charge only.

A system of storekeeper agents operates throughout the country districts. These agents receive eggs from the producer and sell same, ungraded. Any surplus is forwarded to a Board Agent. The storekeeper agent charges a small fee for handling these surplus eggs and remits the balance to the producer.

Storekeeper .agents are .required to keep records of all eggs received and these records are open to inspection by the Board's inspectors.

South .Australia also .has a system of " exempted produeeDs " who . .sell under licence and whose selling price is fixed by the .Board. These .exempted produceiS are similar to the producer agents in other states.

The export price affects the industry greater in South Australia than Victoria or New South Wales because the bulk of the production in South Australia .is for export in shell or pulped for export or interstate trade. The home consumption amounts only :to 20 to 30 per cent. of production, whereas the reverse is the case in both the other Stat~s.

CONCLUSIONS. 61. Your Committee is satisfied that the quality of eggs .has improved since the

establishment of the Egg and Egg Pulp Marketing Board. The financial position of the Board at present is satisfactory and Board control is

to the advantage of producer and consumer alike. The majority of producers in the State appear to be in favour of the continuance

of the Board. Any criticisms in this Report are not directed against the system of organized

marketing but rather against particular aspects of the operation of the system.

62. It was made evident to your Committee that the main concern of each Board was that its administration should find ..favour in the opinions of the producers who elected it. The natural outcome of this desire was the adoption of a policy calculated to gain support at the all too frequent elections rather than a plan of broad vision beneficial to the industry as a whole.

The continual war of attrition between the various factions in the industry was fomented by a general endeavour on the part of each to out-do the other in the way of extravagant promises during the election campaigns.

A brief summary of the activities of a Board during its two-year term of office could be given as follows :-

(a) Five months devoted to administering a pool bequeathed by its predecessor in office.

(b) Budgeting for and administering one complete pool year. (c) Budgeting for a pool year and administering the same for seven months

in the full knowledge that the final five months administration must be the concern of its successor.

63. Your Committee considers that the term of ·office 'Of the Board is of too limited duration and that the Board should assume office at the beginning and not the middle of a pool year. It concurs in the almost unanimously expressed opinion of witnesses that elections should be held in May or June instead of in January as at present and that an extension of the term of office of Board Members would tend towards a continuity of policy which would establish greater stability in the industry.

64. Your Committee is of opinion that it is essential that one member of the Board should be a person with a wide knowledge of the problems associated with marketing and also with a sound business experience. The Egg and Egg Pulp Marketing Board, with an annual turnover approximating £4,000,000, can be classed as a commercial undertaking which, whilst having due regard to the business acumen of many engaged in the poultry industry, is too vast an undertaking to be entrusted entirely to the care of those whose experience has been limited to the conduct of their own farms.

The presence on the Board also of an officer of the Department of Agriculture who, in addition to giving the Board the benefit of his knowledge and experience, could act as a liaison officer between the Minister and the Board, would ·appear to ·be an ~advantage.

In the opinion of yom: Committee the m?st suitable Board would be a Board consisting of the two members mentmned, together With three producer members who would be representative of the industry and who would hold the balance of power.

65. The present method of preparation of the roll of producers entitled to vote at elections for mem~ers of the Board appears to your Co~mittee. to place too large a :neasure of control I~ the h~nds of the. sma.ll prod~cer who, m. ~r~ctiCe, only engages in the mdustry on a part-time basiS or as a side-hne to his other activities as a ·primary producer.

His stake in the i~dustry is much l~ss than _that ?f the producer who is d.upendent upon the returns from his poultry product10n as his mam or Bole means of livelihood.

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Your Committee does not consider that the large or full-time producer should have complete control of the industry, but that the minimum qualification for voters should be raised from the present requirement of the ownership or control of 100 birds to that of 250 birds.

Furthermore, your Committee considers that ownership or control of the requisite number of birds is not in itself sufficient qualification. The producer who gives to the Board full account of his production is surely entitled to greater consideration than he who evades his obligations under the Act. Taking the average return per bird per annum at 144 eggs, as adopted by the Commonwealth Bureau of Agricultural Economics, the producer with 250 birds should account to the Board for 3,000 dozen eggs per year.

Therefore your Committee is of opinion that a reasonable minimum qualification for enrolment on the roll of producers should be ownership or control of 250 birds plus a production return to the Board of at least 3,000 dozen eggs per year.

66. With regard to the Authorized Agents it can be said that they fulfil a useful part in the marketing of the product, particularly through, in most cases, their long association with the industry and the fact that they are concerned in staff problems to a lesser degree than are the Board floors. Most Agents handle other goods in addition to eggs and are thus able to provide full employment for their staff during the slack seasons of egg production. This is a problem which is of grave concern on the Board floors.

From the evidence given to your Committee it would appear that some Agents indulge in the practice of up-grading eggs in an endeavour to ensure the goodwill and retain the custom of the producers who supply them. As mentioned earlier in this Report the establishment by the Board of a regular and more thorough checking system would obviate most of the trouble caused by faulty or incorrect grading on the part of the Agent.

Your Committee has approached the subject of the Authorized Agent from the point of view of efficiency only.

The evidence disclosed that all Board floors, with the exception of that at Ballarat, are conducted at a loss, and although producers are free to forward their eggs to Board floors, it is significant that Agents handle approximately 85 per cent. of the total production.

Your Committee therefore considers that there is a place for the Authorized Agent within the present organization of the industry.

The Board may, by a gradual expansion of its activities, eventually reach the position where it is capable of undertaking efficiently the complete physical handling of all eggs produced in Victoria and subject to the Act. In the meantime the Authorized Agents should be relieved of their present insecurity of tenure which deters them from embarking upon any plans for improvement to their premises or equipment.

67. The operations of the Board are at present carried out in a number of establishments widely scattered throughout the metropolis and your Committee considers that investigations should be made with a view to the acquisition of an area in the Footscray or surrounding district.

Plans then could be prepared for the ultimate establishment of an undertaking modelled on that of the New South Wales Egg Board at Lidcombe.

In the opinion of many in the industry the present main intake floor at Port Melbourne is too inaccessible and Footscray district is suggested as being a convenient location for the intake from the main country egg producing centres.

Oakleigh and Box Hill floors should be retained to handle the production from areas contiguous to those floors.

68. Your Committee is of opinion that a diminution of pool evasion would be achieved by a system of licensing of retailers. If the retailer were required to keep a record showing the source of his purchases it would enable the inspectorial staff of the Board to exercise a greater degree of control over the producers.

69. In the opinion of your Committee the present insecurity of tenure of the staff should be resolved in order that the best brains in the industry may be attracted to the service of the Board.

70. Your Committee required the production of the Minutes of the 1951 Board and could not fail to notice the disparity on many occasions between proceedings of the Board as recorded in the Minutes and the public statements, both oral and written, attributed to certain Board members regarding those same proceedings.

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Distortion of facts to suit their own ends was apparent in these statements, which obviously were made with the view of misleading the producers. They are indicative of irresponsibility and lack of sincerity on the part of the members concerned who, it appears, speak with one voice at Board Meetings and with another in public.

71. Reference should be made to the repeated allegations both in evidence and in public statements by certain members of the Board of the existence of "rackets" within the· industry.

Every endeavour was made by your Committee to trace the origin of these allegations and obtain substantiation of the same, but, in most cases, no factual evidence was forthcoming either to prove or disprove them.

Your Committee therefore concludes that the said allegations are based upon hearsay only and that the so called "rackets" may, in the main, exist solely in the minds of certain persons in the industry.

72. It is the opinion of your Committee that inexperience and undue optimism are apparent in the compilation of the Board's Budget for the 1951-52 pool year and it concurs to the fullest extent in the opinion expressed in the following extract from a circular letter to producers, dated 19th July, 1951, and signed by Roadley, then Chairman of the Board :-

" The success of the budget will be achieved only by the attainment of the targets set. Failure to reach these targets will have disastrous consequences both to the Board and producers, and this fact cannot be too strongly emphasized."

The Board itself, by its weak administration, has imperilled the attainment of these targets.

Your Committee considers that the imposition of pool deductions amounting to 8!-d. per dozen was unjustified. It resulted in the consumer paying a price which was regarded as excessive having regard to the net return to the producer and it led to wholesale evasion of the Marketing Acts.

73. Your Committee considers that George Hawthorne Roadley, both in his capacity as Chairman and as General Manager of the 1951 Board, and Carlie Samuel Gustav Nettelbeck, a member of the Board, allowed themselves to be dominated by a more forceful character in Clarence Aldous Hurst-all three being executive members of the National Poultry Farmers' Association, which exerted a powerful influence upon the policy of the Board.

Not one of these producers' representatives on the Board can be classed as a "full-time producer". Nettelbeck is a merchant engaged in interstate trade, whilst Roadley and Hurst each have, as well as their poultry farms, other interests which necessarily occupy a major portion of their time.

7 4. Your Committee was not impressed by Clarence Aldous Hurst, a member of the Board, whom it regards as untrustworthy and unbalanced, and your Committee decided that no reliance could be placed on the evidence of this witness in the many cases where his e·vidence was at variance with that of other witnesses.

His lack of balance was shown by the many rash allegations he made on oath but was unable to substantiate.

As a member of the Board Hurst proved disloyal to his Chairman and overbearing and insulting to the staff.

That he is unscrupulous was made apparent by his actions-(a) in subornin~ ~t least. one ~mployee of a previous ~oard to divulge

confidential mformatwn whwh Hurst used to further his own ambitions · ' (b) in ensuring that such employee gained advancement over his fellow

members of the staff in return for services rendered ; and (c) in making most serious accusations against the integrity of the staff of

the 1951 Board which, upon investigation, also proved entirely incapable of substantiation.

Your Committee feels that a large measure of the unrest in the industry is undoubtedly due to the machinati_ons of H:n-st~ who displays an i;n~erent antipathy to all who prove themselves non-subservient to his dictates or whose oprmons are not coincident with his own.

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7f>. Y.our Committee's final conclusion is that, dul'ing the period covered by the .'lierms of Ueference, ,there has .been .no uniformity of policy followed by the successive Boords.

The violent fluctuations in Board policy, due to the success at the biennial elections of ,first one faction ·and then another, have had. a disturbing effect upon producer and consumer alike.

Since the appointment of the 1951 Board unrest in the industry has been accentuated.

Accepting the system in New South Wales as the model upon which control of the industry in Victoria should be based and faced with the possibility of their term of office being limited to two years, members of the Board apparently desired to implement, without delay, the policy upon which they were elected, namely, that of the National Poultry Farmers' Association.

Certain members did not appreciate the fact that the New South Wales undertaking had taken many years to reach its present stage of efficiency and even now was not completed.

The :Board',s judgment regarding the practicability or otherwise of immediate .implementatron of its plans to re-organize the industry was affected by lack ·of experience in the control of so vast an undertaking, the unwillingness on the part of some members to listen to reasoned advice, and the belief of those members in the complete autonomy of the Board.

Although the agreement1) made by the Carter Board assured the Agents of security of tenure for .five years, public statements by certain Board members that the objective of the Board was to get rid of the Agents and the issue of Instructions 25 and 26, not unnaturally convinced the Agents that the Board was attempting to make their position untenable by the imposition of irritating restrictions. Natural resistance on the part of the Agents to what they regarded as attempts to curtail their activities has been a further factor in the unrest in the industry.

However, your Committee is of opinion that the implementation of the recommendations which are set out in this Report should resolve the difficulties and differences hitherto existing -and achieve a stability which will be of benefit to all those engaged in or affected b! the industry.

RECOMMENDATIONS. 76. Your Committee recommends-

(1) That the Board be reconstituted on the following basis:~ The Board shall consist of five members, of whom~-

(a) One shall be a person appointed by the Governor in Council with sound business experience and a thorough knowledge of marketing.

(b) One shall be an Officer of the Department of Agriculture. (c) One shall be a full-time producer of eggs appointed by the

Governor in Council from a panel of names submitted by those organizations which, in the opinion of the Minister of Agriculture, are representative of the industry.

(d) Two shaH be elected by qualified producers at a poll conducted in accordance with the provisions of the Act.

(2) That the term of office of members of the Board be four years. (3) That elections for Board membership be held on a State-wide basis in

either May or June and that the Board year start on the first day of July to coincide with the pool year.

(4) That at the first election of members of the Board the elected member who obtains the fewer number of votes shall hold office for a term of two years, and that thereafter elections be held every two years~the elected members retiring in rotation.

(5) That the remuneration of members of the Board be increased from £250 to £500 per annum, and that of the Chairman from £500 to £750 per annum.

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(6) That the mm1mum qualification for enrolment on the roll of producers entitled to vote at elections- of the Board be raised to ownership of 250 adplt female domesticated.: fowls; together with a production return to the. :ijoard during the calendar ye;:tr imii1ediately p;rece.ding the d&te of election of not less. than 3,000 dozen eggs..

Note.-As it is understood that records kept. by the Board will not readily disclose the production. returns of indiwdual.c prod:ucers over a period of twelve months, your Committee recommends that the first election to be held, if the recommendations in this Report be implemented, be held on the basis of the above-mentioned ownership. qualification only. Further, yoUIJ Committee recommends that step~:~ should be taken immediately. by the Board to .. adopt. methods wher.e.by11 i11dividual production returns may be recorded and he kept llP' to date.

(7) That a General Mauag_er be appointed by the Governor in Council at a salary of not less than £2,000 per annum and for a term not exceeding five years. Such General Manager to be eligible for. re-~Wpointment at the expiration of his term of office. · ·

(8) That the duties of the General Manager be defined by the Board, but shall include the. appointment and control of the Hoard's:. staiD e:xroept such appointments as shall be made by the Governor in, CounciL

(9) That the General Manager be empowered to attend all Board Meetings with power to take: part in discussions on matters relating to his administration or on matters of policy but with no voting power.

(10) That the principal administrative officers of the Board be appointed by the Governor in Council for such fixed periods, not exceeding five years, as may be deemed desirable.

(11) That the inspectorial staff of the Board be empowered at any reasonable time to enter any premises where eggs or egg pulp are produced or stored or suspected to be produced or stored, and inspect such premises with a view to ensuring that the provisions of the Marketing of Primary Products Acts and the Regulations thereunder are being properly observed.

(12) That in order to handle the production of small producers in areas where no Board Floors or agents are operating and where eggs surplus to the producer's own requirements are disposed of to the local storekeeper, a system be set up of forwarding agents licensed to receive eggs on behalf of the Board. Such eggs to be despatched to a centre stipulated by the Board and the proceeds therefrom distributed to the. producers per medium of the forwarding agent.

(13~ That a system of licensing of retailers be inaugurated; arid .. retailersrequired to keep a record showing the source of all eggs received by them and the manner of disposal of the eggs.

(14) 'Chat the Board contin:ue to fix. the wholesale price of eggs but be subject to the over-riding authority of the State Prices Decontrol Commissioner and that the Commissioner fix the margin allowed to the retailer.

APPRECIATION. 77. Your Committee records its appreciation of the assistance rendered by Mr.

Sydney T. Frost, particularly with respect to the examination of witnesses. Indeed the following remarks of the chief witness, George Hawthorne Roadley, are worthy of mention:-" I would like to thank Mr. Frost for the job he has done .... The way he picked up the egg business is not only a credit to him but a credit to those who appointed him."

Your Committee is indebted to Mr. Patrick Ryan, Chief Inspector of Agriculture, whose vast knowledge of the working of the Marketing Acts and whose sound advice proved of great benefit to your Committee in its investigations.

In addition, your Committee desires to place on record its appreciation of the services of its Secretary, Mr. L. G. McDonald. His experience, industry and organizing ability greatly facilitated the work of your Committee and his assistance in the preparation of this Report was invaluable.

Committee Room, 29th October, 1951.

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APPENDIX.

WITNESSES. The following is a list of witnesses in the order in which they appeared before your Committee

Stanley Alexander Outerbridge Formerly Secretary, Egg and Egg Pulp Marketing

Robert Edward Huggins Henry Francis Fox Edwin Arthur Peverill J ames Carter George Hawthorne Roadley John Ro bert Alexander McCullough Keith Findlay Ballantyne

Thomas Phillip Moore William Birch Hunter Henry Frederick Boding ..

Archibald George Robertson Charles Clough

David Burns

Ian Robert McCann

William Henry Turtle Patrick Mulligan Clarence Aldous Hurst Allen Leigh Goldsworthy ..

Carlie Samuel Gustav Nettelbeck .. John Cyril Touhy

Harry Edward Cope John Denis Oakes

John Charles W oodier

Louis Herman Schulze George Robert Boulton Leonard James Roy McCabe

Clarence Harold Frampton

Ho race John Book

Charles Sleigh Mrs. Hilda Imray

Edgar Albert Piper Richard Charles Blake

Board. Chairman, 1947-49 Board. Formerly General Manager of the Board. Auditor-General. Chairman, 1949-51 Board. Chairman, 1951 Board. Manager, Crystal Ice and Crystal Egg Co., Bendigo. Director, K. L. Ballantyne Pty. Ltd., Melbourne;

Chairman, Authorized Egg Agents Section, Melbourne Chamber of Commerce.

General Agent, Warracknabeal. General Agent, Shepparton. General Agent ; Vice-Chairman; Authorized Egg Agents

Section, Melbourne Chamber of Commerce. Egg Floor Manager, L. K. Ballantyne Pty. Ltd. Manager, Box Hill Floor, Egg and Egg Pulp

Marketing Board. Manager, Oakleigh Floor, Egg and Egg Pulp

Marketing Board. Chairman, Poultry Section, Australian Primary

Producers Union (Victorian Division). Poultry Farmer, Research. Poultry Farmer, Eltham. Member, 1951 Board. General Manager, United Poultry Farmers' Co­

operative Society Ltd. Member, 1951 Board. Production Manager, Egg and Egg Pulp Marketing

Board. Egg Merchant, Ringwood. Golden Square, President, Commercial Egg Producers'

Association. East Preston, President, Poultry Farmers' Protection

League. Grovedale, Poultry Farmer. Member, 1951 Board (Government Nominee). Poultry Farmer, Dandenong ; State Treasurer, National

Poultry Farmers' Association. Poultry Farmer, Noble Park; Secretary, National

Poultry Farmers' Association. General Manager and Secretary, Grocers' Association

of Victoria. Member, 1947-49 Board. Chairman, Consumers' Committee, Marketing of

Primary Products Act. Member, 1951 Board. Chief Executive Officer and Superintendent of Exports,

Australian Egg Board, Sydney.

[Minutes of Evidence are not printed.]

By Authority: J. J. GoURLEY, Government Printer, Melbourne.