The Beginnings of the Honey Marketing Authority

The Honey Marketing Authority (HMA) began operations in 1954.  The HMA was ultimately to be a significant influence on the marketing of New Zealand’s honey for more than 25 years, until about 1980.  The establishment of the HMA and its first few years of operation were marred, however, by a series of poor regulatory processes and a seemingly high-handed approach to the industry’s concerns.

Marketing through the 1940s

The Government, using the Internal Marketing Division (IMD), had controlled NZ honey marketing since the late 1930s.  At the close of the war, the honey industry looked forward to a return to a less-regulated form of honey marketing.  The IMD had alienated beekeepers with demands of 40% and later 70% of their honey crops, backed up by regulation.

There was a recognised need for some form of marketing body capable of exporting enough honey to ensure that the local market was not over-supplied, which would lead to price cutting.  Two producer-controlled organisations, the Honey Producers’ Assn (HPA) and the New Zealand Honey Company had failed in the 1930s, but the desire was for this producer control, rather than the IMD’s (in fact, the Government’s) policies.

In 1945 “Wilf” Lennon, NZ Beekeeper magazine editor and Vice President of the National Beekeepers’ Assn (NBA), estimated the average NZ honey crop as 3,000 tons per year.  Of that, he felt beekeepers could readily supply the 2,000 tons needed to satisfy the NZ local market through door sales and the wholesale/retail trade. Most of that honey was subject to the Seals Levy, a 1/2 cent per pound levy collected at the point of final sale.  Apart from door sales, honey sold by beekeepers and packers had to pay this “equalisation” levy (though that term was not always used).  That Seals Levy could be used to effectively subsidise the exports of honey (which were not so profitable as NZ sales).  Lennon believed that beekeepers would voluntarily supply the critical 1,000 tons needed to be exported each year in order to provide a stable and consistent market for their honey.

A Beekeeper Controlled Marketing Authority – 10 years in the Design

While the Government was willing to have producers in an advisory role to the IMD, it was a slow process through the late 1940s and early 1950s as the industry refined its requests for a statutory marketing board with honey producer control and management.

Keith Holyoake became Minister of Agriculture in 1949, and was to hold that portfolio for eight years.  He was also Minister of Marketing until the Marketing Department was abolished at the end of 1953, and it was that role in particular that impacted the beekeeping industry.  Other similar primary production industries had transitioned to producer-controlled boards in various formats.  Holyoake seemed supportive, but wanted to ensure that whatever decision was adopted would have the support of producers.

The beekeeping industry argued through the related options extensively through the late 1940s and early 1950s.  By 1953 the wishes were pretty well consulted and agreed.  In August and September, the Minister called for specific meetings with both the NBA and the Honey Marketing Committee members to iron out the details of a producer-controlled honey marketing body.  Though the NBA had been calling for such an authority for nearly 10 years, when it all finally happened it seems to have been done with serious haste.

Failures in the Regulations

Ultimately, the Government’s delivery of the Honey Marketing Authority Regulations to put it all into place failed almost every requirement expressed by the industry.

Some industry requests may not have seemed so important to the Government.  One such issue involved the grants made from the Seals Levy fund to the NBA itself.  Each year the NBA was given a grant for operations, but the NBA felt this should be more certain, and identified it as something that was wanted and needed.  The NBA was near insolvent through this time, and the security of funding was seen as an essential element, and beekeepers wanted it to be clearly stated in the new regulations.

In exchange, producers had agreed that the Seals Levy rate would be doubled, to 1 cent per pound.  The increased Seals Levy collected was intended to support the industry representation role of the NBA through this grant that “shall” be payable to the NBA each year.

When the HMA regulations were gazetted in December 1953 the wording was that a payment to the NBA “may” be made, rather than “shall” be made.  A small thing, but indicative of the poor regulatory development process.  Holyoake seemingly dismissed the distinction, saying that the issue could be taken up with the newly established HMA to sort out if necessary.  There were no problems in increasing the Seals Levy rate…

HMA Elections

Other aspects of the new regulations were more glaring.  The issue of who could vote, and who could stand for election to the HMA, had been widely discussed for nearly a decade.  Ultimately a consensus had been achieved.

The industry felt that a honey producer who supplied honey to either a packer, or a producer/packer, should still retain the right to vote the relevant Seals Levy based votes.  Until then, the voting went to the packer involved, rather than the producer.  There was little resistance to this idea from anyone.  But the HMA regulations left it all unchanged, as if nothing had ever been discussed about the issue.  

The other, related, issue was the eligibility to stand for the new authority.  Members of the Honey Marketing Committee (Wallace Nelson, Bill Herron and Frank Holt) were resistant to the idea of non-suppliers of honey to the authority being able to be elected to manage the authority.  The level of honey supply to the HMA need to be supplied was not great – 2 tons per season made a beekeeper eligible to stand for election – but the industry felt strongly that the management of the marketing authority should be in the hands of all producers of honey.  Suppliers to the authority contributed through the supply, non-suppliers to the authority contributed through the Seals Levy collected from them.

Eventually, it was agreed that anyone with 30 or more hives would be eligible for nomination in the new authority.  It was a major agreement between beekeepers, generally, suppliers to the authority, the NBA and the Honey Marketing Committee.  They all agreed, not always the outcome when beekeepers argue.

And the HMA regulations that came after all this consultation and agreement?  It remained entirely unchanged from the old regulations!  

Regulation Without Consultation

It was about this time that the beekeepers realised what was going on – there had been another draft set of regulations from the Law Office that the NBA and Honey Marketing Committee had never been provided!  It was as if all that time and effort in late 1952 to get the industry agreement that the Minister insisted upon was wasted and ignored.  

The best the Minister would come back with was that  “…in view of the urgency of the preparation and enactment of the Regulations, it was not possible to refer the draft to your Association for comment.”  He said “it was just the hurry and bustle of that particular time.”  He urged beekeepers to give the new regulations a chance, and that he would be happy to put forward amendments to fix the numerous issues (that he had created going unsaid), but just not right now.  The existing Honey Marketing Committee would serve as “the HMA” until the first election – and the Minister’s slow responses to the NBA meant that the election was already initiated, so would be held before amendments would happen, using the “wrong” set of industry requirements.

Beekeepers were incensed.  Garnie Fraser, the NBA General Secretary, corresponded repeatedly with the Minister after the regulations appeared in late 1953.  The exchanges, included in the February 1954 issue of the NZ Beekeeper, display a degree of frustration and disbelief that the drafted regulations could have gotten it all so wrong.    

The HMA’s Operational Surprises

But it got worse fairly quickly for the new HMA, even before its first meeting.  The HMA (in fact, the previous Honey Marketing Committee) had its first meeting within a few weeks of the HMA’s establishment – and were informed that the 1% interest overdraft used by the IMD would not be available to them.  A 4% rate was going to be the best interest rate the Government would provide the HMA with.  On its own, that change was expected to take 1 cent per pound away from the beekeeper, a massive increase in costs for the new authority.

And the new HMA were also told that they could expect a significant rent increase on the property in Auckland previously used by the IMD for storage and packing of honey.

The Minister magnanimously stepped in to bat for the beekeepers – and made sure they knew it – and ultimately secured a better deal than what had been landed on the HMA initially, providing some cheaper finance.  The HMA reported a “temporary measure of relief” in the application of rental increases for the premises it had inherited from the IMD.  But for most of the errors his Department had created for the beekeeping industry, his response was to say it should be taken up with the HMA itself… 

Repairing the Damage

Sadly, after championing the NBA’s voice through this time, Garnie Fraser, the General Secretary, died suddenly shortly after the 1954 NBA Conference.  To read his letters and his keeping of the NBA minutes, his frustrations were clearly evident, and he did not live to see any resolution of the multiple issues with the new HMA.

It took several years, and a number of legislative amendments, before the industry ever got what it thought it was getting in the HMA.  Sometimes in reading it, you can feel the Minister’s desire to never have to hear about beekeepers and beekeeping again.  One could easily argue he brought many of the problems on himself.

Generally, articles I write about beekeeping involve disagreements, often between groups of beekeepers.  The beginnings of the HMA had some of that, with the Honey Marketing Committee and the NBA often at loggerheads.  

But when it came time for the delivery of the NZ Honey Marketing Authority, the beekeeping industry had valid reasons for feeling as if they were not being treated with due respect in the legislative development and consultation process.