Demise of the HMA – and the Creation of the HITs

Short version: The Honey Marketing Authority was dis-established by the honey industry in the early 1980s. The HMA assets were used to create the Honey Industry Trusts, which still provide funding to generally advance the honey industry…

Changes to Honey Marketing Were Imperative

Mr. R.L.G. “Rob” Talbot, the Parliamentary Under-Secretary to the Minister of Agriculture, put it pretty succinctly: “… the maintenance of a status quo [in honey marketing] was not on – some basic changes were necessary.” By the end of 1979 it was clear to almost everyone that the disestablishment of the Honey Marketing Authority was inevitable. But issues remained – how/how quickly to change the system, what might take the place of the HMA, and who actually owned the assets that the Authority had built up over twenty-five years of operation.

Three Significant Meetings of the Industry

The 1979 NBA Conference – Christchurch

The 1979 National Beekeepers’ Assn conference in Christchurch had made some significant decisions, led by president Michael Stuckey (who was also a producer representative on the HMA, though he was not in fact a supplier of honey to the HMA). The conference had been clearly opposed to the continuation of any sort of “stabilisation scheme” by the HMA and agreed that the HMA should not be obliged to accept all grades of honey offered to it. The conference favoured private packer exports of bulk honey, but still with some degree of control.

The stabilisation scheme was developed several years before. Also called the “base price” scheme, it enabled the HMA to have more autonomy in the payout to suppliers when overseas prices were high. The initial amount was paid to the producer, and if exports were profitable additional payments might be made. This same reserve fund was expected to subsidise payments to suppliers if the export returns were lower.

https://beekeeping.nz/NZBDA/NZBkpr/1979_09_NZBkpr.pdf#page=6

Two Industry-Wide Meetings

Paul Marshall, elected NBA president at the end of the conference, “… managed to get a consensus of opinion from representatives of all sectors of the industry”. The NBA, along with Hon. Rob Talbot, had set up two significant meetings to talk about the future of honey marketing. Both were well-attended by a wide range of the significant (and not so significant) industry bodies, and the discussions were full and frank.

https://www.beekeeping.nz/NZBDA/NBA_minutes/1979_Exec_minutes.pdf#page=43

https://www.beekeeping.nz/NZBDA/NZBkpr/1979_12_NZBkpr.pdf#page=15

By the time of that second meeting in March 1980 the discussions had evolved away from how the HMA might continue operations, and more to who should end up with the HMA’s assets. Rob Talbot told the industry –

“I cannot see why those beekeepers who wish to supply an industry board should not get together and operate such a body either as a co-operative or as a private company. The need for this organisation to be a statutory one, and the need for any Government involvement must now be closely questioned. It seems that a supplier company or co-operative could almost take over and run the present ‘Hollands’ side of the Authority’s functions, including the exporting markets.”

Shortly before the second industry-wide meeting such a proposal was being developed, supported primarily by a grouping of South Island honey producers. Rob Talbot had indicated that though there could be more than one co-op, that a number of smaller co-ops might not be supported. The HMA appointed a Timaru accountant, Noel Dellow, to investigate the feasibility of a co-op to take over some of the HMA operations and plant. (The HMA felt that the best course of action for the Auckland facilities was to sell them on the open market. It would, however, consider the sale of the South Island plants, Christchurch and Pleasant Point, to the emerging co-op.)

https://www.beekeeping.nz/NZBDA/NBA_minutes/1980_Exec_minutes.pdf#page=1

The HMA Agrees in Principle to a Co-op

At a meeting in March 1980 the HMA had agreed in principle –

To accept the principle of a voluntary co-op to replace its operations
To suggest that the Minister’s opinion be sought on the status of the Authority’s funds and assets
That if the setting up of such a co-op was found to be viable, the HMA could loan 80% of its equity at 1% interest and the remainder at Rural Bank rates.
That the HMA would propose its own dis-establishment at the appropriate time in the future.

https://www.beekeeping.nz/NZBDA/Packers_Assn/1980_07_Packers_Assn.pdf#page=7

The Packers’ Association took the view that the HMA should cease all packing for the local market, and contract to the existing packers for any retail sales. They felt the HMA should concentrate on the lower-cost exporting of bulk honey, and leave all packing (local and export) of retail packs to the packers.

https://www.beekeeping.nz/NZBDA/Packers_Assn/1980_07_Packers_Assn.pdf#page=2

Ownership of the HMA Assets

Lloyd Holt of Springfield Apiaries first proposed the setting up of a trust for the assets of the HMA. At the second industry-wide meeting, Holt said that “… the National Beekeepers’ Association could act as a trustee for the industry funds and that the Co-operative could borrow at reasonable rates of interest from the trust.” Later in the meeting he said that it was “… an industry fund and should be treated as such.”

The ultimate ownership of the HMA assets was still far from clear. Don Hayman, the Government representative on the HMA, said that he felt the suppliers to the HMA might have a stronger claim to the assets, but that any apportionment would need to be investigated carefully.

The packers were adamant that the reserves that the HMA had built up were primarily due to their payment of the Seals Levy. That levy, 1 cent per pound, had been charged on all retail honey on the local market – but not that sold by the HMA. The Seals Levy was intended to build up reserves that would all the HMA to export volumes of honey even when the overseas returns were relatively low. For the many years when the export returns for honey were poor, the Seals Levy enabled a somewhat stable market. Though the Seals Levy had been discontinued several years before, packers were still effectively asserting “ownership” of some of the HMA assets.

https://beekeeping.nz/NZBDA/Packers_Assn/1980_07_Packers_Assn.pdf#page=5

The Need for Arbitration

The HMA board had come to an agreement with the Steering Committee of the Co-op at a meeting in early July 1980, shortly before the NBA conference in Tauranga. While still supporting the concept of a loan to the Co-op at low interest rates, the HMA wanted to hear the discussions and remits at the NBA conference, and allow the arbitration to be completed before making the loan.

The 1980 NBA Conference in Tauranga

The conference supported the appointment of an arbitrator by the Minister. A last minute (amended) resolution also suggested that any low interest loan to the Co-op should only be for the purchase of the packing facilities and buildings in the South Island

https://beekeeping.nz/NZBDA/timeline/1980_08_HMA_chairmans_newsletter.pdf

https://www.beekeeping.nz/NZBDA/NZBkpr/1980_09_NZBkpr.pdf#page=10

Rob Talbot proposed the use of an arbitrator to investigate and report on –

How were the HMA assets built up?
Who owns the HMA assets?
If the HMA were to be dissolved, how should the assets be disposed of?
Could the HMA assets be used to assist the development of a national honey co-op?

Talbot wanted all parties to accept the arbitration, and its recommendations were substantially different from the agreement that the HMA and Co-op had made several months earlier, that the report should then determine the apportionment and interest rates for the loan to the Co-op.

Talbot approached a Wellington accountant, David H. Kay, of Hutchison Hull chartered accountants, to carry out the work. He also called one last unsuccessful meeting with the HMA and the Co-op in August.

An Injunction is Granted

By September 1980 there was a stalemate between the Steering Committee of the proposed Co-op and the HMA board. The Co-op was hoping to make use of low interest money to enable its startup, but the HMA was determined to ensure the ownership and ultimate allocation of the funds was clearly established before the loan would take place.

At a meeting on 16 September 1980 the HMA board passed a somewhat surprising resolution. It suggested that the low interest loan to the Co-op be progressed, even before the arbitration was complete. That decision came about when Jasper Bray (a packer who might normally have been expected to vote with Percy Berry and Michael Stuckey, also packers), sided with Ivan Dickinson and Government representative Don Hayman to progress the loan before arbitration was complete.

https://www.beekeeping.nz/NZBDA/NZBkpr/1980_12_NZBkpr.pdf#page=7

After Editor Trevor Walton criticised the role of the Government representative in the vote, W.L. Jobson, for the Director-General of Agriculture, came to Don Hayman’s defence.

https://www.beekeeping.nz/NZBDA/NZBkpr/1981_03_NZBkpr.pdf#page=6

Percy Berry challenged voting eligibility in that meeting, saying that he felt it a conflict of interest for Ivan Dickinson to vote on the issue, as it was possible he might become a member of the Co-op. The meeting voted that the resolution was in order.

https://www.beekeeping.nz/NZBDA/NZBkpr/1981_03_NZBkpr.pdf#page=6

Two days later a High Court injunction was granted. The injunction was issued to the HMA, naming Percy Berry, as chairman of the HMA, and Ivan Dickinson, as a producer representative on the HMA. The injunction was granted to Arataki Honey (the director of which was Percy Berry). Ray Robinson and his wife (beekeepers in the Waikato) had joined in with Arataki Honey to seek the relief. That injunction effectively precluded any transfer or loan of HMA assets to the Co-op.

Later, in a letter to the NBA Executive, Bob Blair questioned whether Ray Robinson and his wife should have been allowed to join in the injunction. Blair objected on the basis that Robinson was not actually a supplier to the HMA. The NBA wisely side-stepped by accepting the letter with no action to be taken.

Responses to the Injunction

NBA President Paul Marshall was quick to respond. He sent a telegram to Percy Berry, suggesting that Berry re-consider his role as chairman of the HMA in light of the injunction he had initiated. Paul Marshall said that by calling for an injunction while he was chairman, that it had “… placed Mr Berry on both sides of the argument”.

(Percy Berry did not, in fact, resign as chairman of the HMA. He was, however, replaced by Ivan Dickinson in a meeting of the HMA in November.)

Harry Cloake, a Co-op proponent, said –

“The authority and Mr Dickinson (one of the defendants named in the injunction) could have contested the injunction and legal opinion was they could well have been successful. However this would have taken some time, probably several months before a hearing could have been arranged and would have been costly.”

“This cost would have been on the hive levy account, a direct cost to the hive levy payers. It may have been necessary to have an increase in the levy to cover this cost — something the industry may not have agreed to and certainly the co-operative steering committee would not agree to.”

Percy Berry later claimed that naming Ivan Dickinson individually (as well as himself as chairman) in the injunction was done for “technical legal reasons”. Ivan Dickinson would say that the action was upsetting and hurtful to him personally, saying that it called into question his integrity and honesty.

Arbitrator David Kay Collects Information

David Kay proceeded to address the questions put to him by the Minister during the last months of 1980 . He received about thirty submissions to consider, though he noted that “… [the] great bulk of submissions made to me did not deal with the question of the dissolution of the Authority and the majority centred their arguments on how the funds generated by dissolution should be handled.”

He utilised a wide range of accounting and management information to consider how the assets and reserves of the HMA had been generated. He made a point of acknowledging the support and contributions of both Curtis Wicht and G.G. Chadwick, the general manager and the accountant of the HMA in providing all of the information he needed to evaluate the HMA’s operations.

The Kay Report

David Kay was soon ready to report to the Minister. He presented his findings to the Minister on 31 March 1981, with a covering letter to summarise his findings. The scanned copy also has a short covering letter to Percy Berry, dated 7 April, presumably the date the report was made public.

https://beekeeping.co.nz/NZBDA/timeline/1981_04_Kay_Report.pdf

Kay found that “… the net assets of the Honey Marketing Authority must be attributed to the whole of the honey industry (including packers and producers as defined in the legislation).” Kay then went on to recommend “… that funds resulting from the reorganisation should vest in a trust or statutory fund administered by the National Beekeepers’ Association.”

Kay’s last recommendation was that “… as an industry cost toward orderly restructuring”, and only once the feasibility has been confirmed, that about three-quarters of the HMA asset value should be loaned to the Co-op at concessional rates of interest. Kay repeated that he did not want the figures he provided to be definitive or limiting, but only indicative of his recommendations and in light of his findings.

Some Detail

The Kay Report contained considerable detail to back up the recommendations. Kay valued the HMA assets, in total, as $836,648.

The three buildings – Auckland, Pleasant Point and Christchurch – were valued by registered valuers. Kay ultimately accepted the current book value of the land and buildings, with those figures within the ranges provided by the registered valuers.

The Seals Levy that had been collected through the years was summarised, as were the reserves that had been created in the last few years, when overseas prices gave good returns for the HMA.

The report examined the issues relating to ownership, or attribution. Kay identified –

The original transfer of funds from back when the HMA was set up
The Seals Levy that had been collected through the years
The net revenue of the HMA that had not been paid out to suppliers (the “reserves”)
The effect of inflation on the HMA’s fixed assets.

Ultimately he concluded that no single group of beekeepers had any more rights to the money than the others.

Vesting of the Funds

David Kay proposed several options for the handling of the funds as the HMA was dis-established.

The NBA was identified as the only organisation representative of the whole industry, so Kay recommended that the funds be “… under the overall control” of the NBA, but separate from other NBA funds. He foresaw that the $800,000 or so in such a trust could produce up to $100,000 per annum to use toward the general interests of the industry, including such things as market promotion, advertising and financing apicultural education (seminars, field days, scholarships). He added that it had been submitted that the funds might even be made available as an advance to producers over their honey stocks.

Another consideration Kay raised was that the trust funds could be used to purchase honey in a season of over-supply, and thus act as a stabilising force for the industry.

Finally, Kay admitted that he had not examined the tax implications of the differences between a trust and a “statutory industry fund”, as it was out of his brief.

Dissolution

Kay said that the “buyer of last resort” powers of the HMA had been changed in recent years and no longer applied. He also noted that the right to export (at least for limited quantities of packed lines of honey) had been relaxed, so that regulatory power of the HMA might no longer be required.

The Kay Report acknowledged the strongly opposing feelings of different sectors of the industry, with the range of feelings from wanting to eliminate the HMA entirely, to wanting to retain the HMA in its present form.

Kay made a number of observations relating to any possible future functions of the HMA. He relied somewhat on Don Hayman’s report from just prior to the Tauranga conference. While knowing it was out of his brief, he was willing to comment from an accountancy point of view of financing the HMA’s activities in a time of high inflation.

Kay’s Conclusions

“… [The] total demise of the HMA is inevitable.” With the dissolution of the HMA there will be a necessary re-organisation of the industry, and one that would involve cost.

Kay was not ready to go so far as to say the proposed Co-op had fully made its case, however. Kay felt that more analysis was needed relating to the proposed cash flows and especially for seasonal cash requirements.

“The Authority requires an overdraft facility of approximately $1 million and if, as has been suggested to me, the co-operative proposal merely changes the name of the organisation without affecting its general method of operation, the need for seasonal finance remains.”

In the preparation of an independent feasibility report on the Co-op, Kay felt that attention should be given to points made by Michael Stuckey. Michael Stuckey had suggested that the Co-op could effectively utilise any private packing plants currently running at below capacity, reducing the Co-op’s need for investment in fixed assets.

Kay went into detail to explain his support for providing financial support for the Co-op. He said that the “stability of the industry” and the position of the HMA suppliers at the time of winding up were both worth considering. But if the Co-op’s feasibility was established he felt that industry funds should be used to support it “… in the form of loan moneys of, say, $600,000”. He suggested a ten year pay back period.

The Kay Report said that the transition period for the industry will be critical. He saw the progression as –

Dissolution of the HMA
Establishment of the Co-op
Transition of the HMA’s marketing functions to the Co-op

Kay said that there would need to be an appropriate level of co-operation between the HMA and the Co-op during a transition period that would ensure a smooth handing over. He said he would be surprised if it could all happen within two years.

Kay expected some agreement on the principles involved within three months, with firm timelines for the transitional period as the Co-op began to function.

Kay concluded his report by reminding all beekeepers of the drastic impact the demise of the HMA would have on the long-term HMA suppliers, adding to his arguments in favour of loaning moneys to the Co-op –

“For reasons either previously stated or implicit in this report I consider that the industry should appreciate that a considerable number of producers have had an assured outlet for their production for nearly thirty years and for this and other reasons the possibility of replacement by a co-operative should be explored fully”

Responses to the Kay Report

After getting approval from the Minister, the Kay Report was widely-distributed throughout the industry. In the June issue of the NZ Beekeeper magazine, Simon Mill provided most of the reporting and commentary.

https://www.beekeeping.nz/NZBDA/NZBkpr/1981_06_NZBkpr.pdf#page=6

Mill’s coverage, while glib at times, was accurate in describing the content and the import of the Kay Report. He covered it in two articles – one about the actual Kay Report and a second detailing the discussions of the NBA Executive.

The NBA Executive discussed the Kay Report in May 1981, with Vice President Michael Stuckey being both a member of both the NBA Executive and a producer representative on the HMA. Steve Lyttle, another Executive member at the time, was on the Co-operative Steering Committee. Ian Berry, Percy Berry’s son, was on the Executive. Mervyn Cloake, Harry Cloake’s son, was also on the Executive. The channels of communication were complex…

The NBA Executive decided to seek a legal opinion regarding setting up a trust within the industry to administer the expected funds. They also agreed to consult further with David Kay as to the practicalities and tax implications for such a trust. Kay and the Executive quite openly discussed “… the most satisfactory way of avoiding tax”.

https://www.beekeeping.nz/NZBDA/NBA_minutes/1981_Exec_minutes.pdf#page=7

https://www.beekeeping.nz/NZBDA/NBA_minutes/1981_Exec_minutes.pdf#page=13

1981 NBA Conference in Queenstown

In his presidential address to the 1981 NBA Conference in Queenstown, Paul Marshall admitted that it had not been all bad, though the use of an injunction was opposed by many –

“This form of action [the injunction] ran against the grain for many, but as time passed and with the arbitrator’s report to hand, I think we must all agree that it not only gave the industry time to reflect, but gave the arbitrator, Mr David Kay, a better climate in which to bring down his recommendations.”

It wasn’t until the passing of remit number 7 at the 1981 NBA conference in Queenstown that the injunction was lifted.

https://www.beekeeping.nz/NZBDA/NZBkpr/1981_09_NZBkpr.pdf#page=34

Other remits to the conference discussed leaving the HMA in place as a means to manage the expected trust moneys, rather than setting up a charitable trust. In the discussion, Allen McCaw, a future trustee of the Honey Industry Trust, was referenced several times. This was McCaw’s first NBA conference attendance –

“Mr McCaw asked about the trust fund. President Paul Marshall replied that the funds would be entrusted to the NBA, but the most suitable format for the trust was still to be decided. It was necessary for it to be set up to avoid paying tax on its income.”

A remit from the Otago Branch was moved by McCaw – “That the Executive Committee investigate the future and necessity of the hive levy if the Honey Marketing Authority is disbanded.”

There were multiple remits and notices of motion suggesting ways that the trust funds could be effectively administered and used.

At an Executive meeting in September, the NBA was told by David Kay that it was –

“… extremely difficult to avoid taxation except in circumstances where the funds were to be applied in a strictly limited manner, eg research foundations, Charitable trusts, or in a situation where the Association applied to be registered as a statutory Body such as the Pork Industry Council.”

That meeting also noted that with the winding up of the HMA, there would need to be changes to the Hive Levy Act. Though the HMA was no longer directly involved in the collection of the Hive Levy, it was still referred to in the regulations.

Development of Ideas for a Trust Fund

December 1981

In October 1981 the Co-op began to function…

In December 1981 there was a meeting of the NBA, the HMA, MAF, NZ Honey Producers Co-operative Ltd, and David Kay. The concept of a trust fund, separate from other NBA funds, was to be developed further by David Kay. The meeting felt that “about three Trustees” would be needed. It was expected that the NBA would be able to re-appoint Trustees when their terms of office (not specified) had expired, but that –

“… the control of the fund would be in the hands of the Trustees and not the NBA.”

The Executive went further, saying that however the trust might be set up, it should be done in a way that no special interest group could influence the use of the funds through becoming elected members of the NBA, or any other such way of influencing the fund’s use. The members of the Executive all agreed that none of them had any personal wish to influence the process in any way other than what would be acceptable to the industry.

The Executive acknowledged that the NBA was, as the Kay Report had put it, “… the only organisation which could be said to represent the industry as a whole” and that gave the NBA “… certain rights which it intended to exercise”.

The NBA Executive also stated a position regarding potential trustees, that there should be two independent persons (not NBA Executive members), one from the North Island and one from the South Island. Michael Stuckey felt that the North Island members of the Executive should appoint the North Island trustee, and the South Island members appoint the South Island trustee. President Tony Clissold noted that, regardless, the Executive as a whole would need to approve all appointments.

The disposition of the HMA funds had by this time been made clear. The assets of the HMA would be invested in short-term deposits with trustee security organisations. The Co-op would be borrowing a significant amount of the funds, with repayments scheduled over 10 years. The Co-op could borrow up to $600,000 of the funds for up to five years. All of this was to be done, administratively, by the Pork Industry Council, who anticipated no additional charges than already being paid by the NBA.

The NBA hoped that the trust deeds might be reviewable by the NBA Executive every five years. It finished discussion and said –

“Although the NBA Executive accept in principle and appreciate the value of the Kay report, it does not necessarily accept that every clause of it is exempt from open discussion and possible modification if necessary.”

https://www.beekeeping.nz/NZBDA/NBA_minutes/1981_Exec_minutes.pdf#page=51

March 1982

The March issue of the NZ Beekeeper carried reporting by editor Trevor Walton, and brought the industry up to date with what had been occurring in the previous months.

There had been fears that the Auckland honey handling building might need to be sold for less than its valuation. There had been, however, an offer of close to the $500,000 asking price. It was expected that the total HMA assets would be close to $750,000, but with $600,000 of that to be committed to the Co-op by way of a loan.

The NBA also had the concern that it might go through the process and expense to create a “… complicated and expensive trust structure with no funds to administer” until the Co-op repaid its loan in five years. The expected sale of the Auckland building was good news, even though it did require the vendor (the HMA, later the Trustees) to leave some money in as a second mortgage.

The expected trust could now be expected to have $150,000 along with annual interest from the advance to the Co-op, with a hope for a $40,000 annual return in these first few years.

The administration was to be through two trusts – one general trust that would be subject to taxation, and a charitable trust to fund education, research and similar activities without paying tax. The draft of the trust deeds was expected in March 1982, with the Minister wanting full discussion and agreement from both the NBA and the HMA before he would act to make the necessary legislative changes.

Editor Trevor Walton identified the new role of the NBA –

“As chief adviser to the trusts, the NBA executive will perform an important role – one which is underlined by the demise of the HMA. For in all fields relating to beekeeping, the NBA will from now on have far greater responsibility for co-ordination and leadership than it has ever had before. However, the presence of the trust funds and the industry’s future independence from government involvement and interference must give great hope to those who pin their hopes to the private enterprise star.”

https://www.beekeeping.nz/NZBDA/NZBkpr/1982_03_NZBkpr.pdf#page=7

Even before the trust deeds were drafted, the Packers’ Association approached the NBA, saying that several of its members wanted to make a private application for advances from the trust fund. The NBA General Secretary pointed out that they were a bit premature.

The instructions provided to the HMA’s solicitors to guide the development of the trust deeds indicated that –

There should be two trusts, one charitable and one general.
Same trustees for both trusts, with one from North Island, one from South Island and an independent chairman. The NBA suggested terms of three years.
Normal powers of investment, but also power to take control of the HMA assets, in order to secure the loan to the Co-op and a second mortgage on the Auckland property (a condition of its sale).
Expected that the loan to the Co-op could from the general trust, with the remaining $150,000 for the charitable trust. If transfers between the two were allowed it could minimise future taxation issues.
It was expected that the applications would be vetted by the NBA before being passed to the Trusts.

That NBA Executive meeting in March 1982 resolved that David Kay should be the chairman of the two trusts. It set his initial appointment period to be one year. It was still anticipating terms of three years. Russell Berry was chosen to represent the North Island, and Ivan Dickinson for the South Island. Ivan Dickinson, who was at the meeting, accepted at the time. Russell Berry had not yet been contacted.

https://www.beekeeping.nz/NZBDA/NBA_minutes/1982_Exec_minutes.pdf#page=7

https://www.beekeeping.nz/NZBDA/NBA_minutes/1982_Exec_minutes.pdf#page=9

June 1982

In June reporter Simon Mill wrote in the NZ Beekeeper magazine on the Co-op’s progress through its first season. Between October 1981 and June 1982, the Co-op membership had grown from 12 to 132. Though there had been more than double the tonnage from the North Island compared to the HMA days, poor crops on the South Island resulted in a failure to supply 300 tonnes (bulk honey) to the Japanese market. Overall, however, the Co-op was happy with its first season of operation.

https://www.beekeeping.nz/NZBDA/NZBkpr/1982_06_NZBkpr.pdf#page=7

The original purchase offer for the Auckland building had fallen through, but by June 1982 another (unconditional) offer had been made. The Trust deeds were still under discussion with a legal debate over whether the HMA could legally set up a trust. And David Kay was still trying to sort out some details of the Co-op with Noel Dallow. None of these were really significant or serious, but it seemed that little progress was being made on many fronts…

1982 NBA Conference in Waitangi

Apart from simply reporting on recent events, the 1982 NBA conference in Waitangi had few references to the HMA and the Trusts. One remit did call for a discussion at the conference, and the Executive responded by adding a “buzz group” with Ivan Dickinson leading it. The reporting of that discussion indicated the future uses of the Trust funds –

“Education was top priority for use of trust funds at both employer and employee level
Research
Lending to the Co-op for all aspects of marketing
Use for benefit of the whole industry rather than individual projects”

https://www.beekeeping.nz/NZBDA/NBA_minutes/1982_Exec_minutes.pdf#page=23

https://www.beekeeping.nz/NZBDA/NBA_minutes/1982_Exec_minutes.pdf#page=30

Slowly Winding Up the HMA

In September 1982, NBA Vice President (and HMA Vice Chairman) Michael Stuckey expressed concern at the slow progress for the HMA to be finally wound up. He suggested a deadline of the second week in November. He noted that the NBA president would be required at that meeting, as a meeting with the Minister would be necessary.

In December 1982 editor Trevor Walton wrote an editorial and said –

“Former authority chairman Ivan Dickinson feels it is ironic that the industry should be moving against the mainstream of horticultural opinion. As he points out, berryfruit, asparagus and other horticultural growers are now lobbying government for controls only a few short years after they fulsomely advocated unfettered private enterprise.”

The editorial countered, saying that the HMA had not really really been created as a grower-created body. Trevor Walton said “… there will be no going back” until there was over-whelming support for a new structure, and “… a suitable period of mourning for the authority that was.” He concluded with a call for co-operation…

The HMA had finished final trading on the North Island at the end of September 1982, and in the South Island a week later. There were some issues with both unions and staff members over redundancies. Ivan Dickinson said the HMA had not expected to need to negotiate redundancies for South Island staff, who would be taken over “holus bolus” by the Co-op, but that was not the case. He said that “… [the] motivation of legal people takes some doing … and can prove to be very frustrating.”

“The plan” was for a meeting of the HMA in Wellington on 2 December, attended by the NBA president, with the resolution asking the Minister to wind up the HMA. An appointment was made with Rex Austin, the undersecretary of agriculture, to sort out the regulatory necessities.

Ivan Dickinson said that he “… couldn’t see any reason why he wouldn’t be savouring the bottle of champagne promised by Percy Berry for the day when the HMA was finally dissolved.” He described the last year of the HMA’s existence as “… being the most trialling and demanding of all the years he had been involved in the industry.”

https://www.beekeeping.nz/NZBDA/NZBkpr/1982_12_NZBkpr.pdf#page=7

And the Process Dragged On…

In late March 1993 David Kay met with the NBA Executive. The IRD had required a change relating to the distribution of the funds when the Trust was wound up. It sounds as if the IRD also identified a range of typing inaccuracies in the draft that had been distributed. The Ministry of Agriculture and Fisheries, the National Archives and Treasury had each provided detailed requirements for further information from the Trusts.

Kay told the Executive that all the funds above the $600,000 on loan to the Co-op were in “at call” accounts, earning 13% interest. At this time the Trust Deed had not yet been signed, and David Kay noted that one of the Trustees (Russell Berry) would be overseas until August.

https://www.beekeeping.nz/NZBDA/NBA_minutes/1983_Exec_minutes.pdf#page=4

The Trust Deeds

As it turned out, the Trust Deeds were signed on 1 June 1983. They created two Trusts – the Honey Industry Charitable Trust and the Honey Industry General Trust. Trustees were named as David Hendy Kay, Ivan James Dickinson and Russell Arthur Berry. The two Trust Deeds were much the same, but with a number of sections that differed between the two.

The purposes of the two Trusts were spelled out, with the emphasis on education, study, investigation and research for the charitable trust, while the general trust would work to furthering the general advancement of the honey industry. Each was started with $10,000 from the “Settlor” – the Honey Marketing Authority itself.

The Trusts Deeds created a “date of distribution”. That is, eighty years from the date of establishment – 1 June 2063 – the Trusts will have to wind up. Or, at their discretion, the Trustees could wind up the Trusts at any time before that. The Trust Deeds specified to which organisations any residual funds will be distributed. They include Massey Agricultural College, Lincoln Agricultural College, the National Beekeepers’ Assn and the Ministry of Agriculture and Fisheries. If/when the Trusts are wound up, the Trustees have wide-discretion as to who and how much might be provided to these organisations, and in each case trying to (morally) bind them into an appropriate use of the funds – the same purposes as the Trusts themselves, but ultimately giving discretion to the beneficiaries.

The Trustees are given “… absolute and uncontrolled power and discretion in the management of the trust fund”. A wide range of powers are described in Section 5 of the Trust Deeds, the longest section in each of the two Deeds.

The NBA has the power to remove Trustees and appoint new Trustees. It is described as –

“… [the] Executive Council for the time being of the National Beekeepers Association or any body, corporation or association duly constituted to take over all the powers duties and obligations of the National Beekeepers Association and in substitution for the National Beekeepers Association.”

There is a requirement that there always be three Trustees – one from the North Island, one from the South Island and one “completely independent of the honey industry.”

Like any good legal document it provides a range of possible pathways, trying to remain clear about intent while knowing that organisations and Government departments might change names and structures over time.

https://beekeeping.co.nz/org/trust.htm

1983 NBA Conference – Nelson

The 1983 NBA conference in Nelson was the first conference after the signing of the Trust Deeds. Both the Executive and remits to the conference were made suggestions for the spending of trust funds for various purposes.

In his president’s report Tony Clissold said –

“At our last conference, I was sure that the Honey Marketing Authority would not still be in existence at this annual meeting, but government red tape was true to form and the HMA is still with us. Hopefully not for long, as the trust deeds are now finalised and should be operative soon. I am sure the moneys from the charitable trust will be used wisely so that all beekeepers can benefit. To Ivan Dickinson and Russell Berry, our two industry trustees, your work may only be just beginning.”

Dissolution Regulations

In late October the Honey Marketing Authority (Dissolution) Regulations 1983 were gazetted. Part of the explanatory note reads –

“These regulations provide for the dissolution of the Honey Marketing Authority and, after payment of its debts, the transference of its assets to 2 Trusts set up to further the general advancement of the honey industry in New Zealand. Provision is made in regulation 3(5) for money loaned by the Authority to the New Zealand Honey Producers Co-operative Ltd to become the property of the 2 Trusts.”

https://www.legislation.govt.nz/secondary-legislation/pco-drafted/1983/210/en/2007-09-03/

https://www.beekeeping.nz/NZBDA/NBA_minutes/1983_Exec_minutes.pdf#page=44

While that legislation laid the groundwork for the dissolution of the HMA, the actual disestablishment would still be some time away. It would take until 1 July 1984 before the final accounting…

The two Trustees from the honey industry, Ivan Dickinson and Russell Berry, participated in the Industry Planning meeting in early 1984.

https://www.beekeeping.nz/NZBDA/NZBkpr/1984_06_NZBkpr.pdf#page=14

1984 NBA Conference – New Plymouth

In his President’s Report to the 1984 NBA conference in New Plymouth Ian Berry said that though the winding up of the HMA and the setting up of the Trust Funds had been expected before now, it continued to drag on. Ivan Dickinson was still the erstwhile Chairman of the HMA, as well as being one of the Trustees for the Trust Funds. (The Minister of Agriculture had extended until June/July 1986 for any HMA producer representative elections.) It was estimated that the General Trust would end up with $600,000 (loaned to the Co-op) and the Charitable Trust with $170,000.

Those estimates were quite close, in fact. When David Kay wrote to the NBA to advise the full establishment of the two Trust Funds on 1 July 1984, he reported –

General Trust – $654,043
Charitable Trust – $163,511

Kay also estimated that there would be a tax paid income of $22,500 for the General Trust and $14,500 for the Charitable Trust.

There continued to be references to trust funding in the Executive minutes, and particularly for those uses which might well fit within an application to the Charitable Trust.

NBA president Ian Berry noted that the expected tax paid income from the two Trusts would be about the same as the NBA was currently getting from the Hive Levy. The NBA Executive discussed procedures for Trust Fund applications, and agreed that requests would be submitted to the Executive to be discussed at an Executive meeting, who would then forward applications to the Trustees with the Executive’s recommendation.

Executive and Trustees Meet

In September 1984 the NBA Executive decided to recommend to the Trusts that applications be accepted on an annual consideration basis, and that an application form be drafted. David Kay had by this time increased his expectation of returns to $50,000 after taxation from both Trusts. The Trustees and the NBA Executive agreed to an annual timetable of applications and consideration.

Concerns by Trustee

Prior to the September 1984 NBA Executive meeting, Russell Berry, one of the Trustees, wrote to the NBA with concerns over “… the security and financial implications relevant to funding of the Industry General Trust.” Later in the meeting it was agreed that Ian Berry (Russell Berry’s brother) would “… have further discussions with Mr Russell Berry relative to his concerns as a Trustee”.

https://www.beekeeping.nz/NZBDA/NBA_minutes/1984_Exec_minutes.pdf#page=42

https://www.beekeeping.nz/NZBDA/NBA_minutes/1984_Exec_minutes.pdf#page=49

In December 1984 the NBA Executive considered several draft letters to the Trustees, “… relevant to information and also the advance to the N.Z. Honey Producers Co-op”. A remit to the 1985 NBA conference in Greymouth several months later would provide some explanation of the concerns.

First Applications to Trusts

NBA president Ian Berry gave a clear summary of the demise of the HMA and the development of the Trusts in late 1984.

The Executive decided against creating an application form, deciding to wait to see how the first year of applications would go. The first application was received from the Bay of Plenty Community College, and the Executive agreed to consider it with any other applications in the following March meeting.

https://www.beekeeping.nz/NZBDA/NBA_minutes/1984_Exec_minutes.pdf#page=56

In March 1985 the NBA Executive said that the last two letters sent to the Trustees had not been responded to, while acknowledging that the Trustees had not met during that time. David Kay had told the NBA President that the last issues before the final winding up of the HMA related to the transfer of some trade marks.

The NBA Executive considered at least two Trust applications at that meeting –

A previously mentioned application from the Bay of Plenty Community College
N.T. Moar’s application, relating to pollen identification

1985 NBA Conference – Greymouth

The NBA Executive noted that “… there was nothing that the Association or the Executive could do” relating to the low interest being charged on the loan to the Co-op. The Executive hoped that several of the remits would be withdrawn during the conference. Several of the remits referred to by the Executive were, in fact, withdrawn with the leave of the delegates.

One, though, did not get withdrawn, and required discussion. Remit 1 from the Waikato Branch called for the NBA to do all it could to increase the interest rates for the loans to the Co-op. The branch was concerned that the real value of the money was eroding due to the very high inflationary rates. The remit lost “on the sticks” by 4 branches to 10 branches. This remit may well have been the concerns of trustee Russell Berry when he wrote to the Executive late the year before. As the Waikato branch delegate, Russell Berry would have been the one to move and speak to the remit. The chair of the meeting was NBA president Ian Berry – Russell Berry’s brother.

A late remit from Auckland, accepted by the delegates, called for a meeting of the NBA Executive, the Trustees, the Co-op and the Packers’ Association to develop a common marketing policy. Conference agreed to the remit 14-0, but only after amending it to remove the Trustees from the proposed meeting.

The NBA Executive was still having problems with getting responses to letters that had been written to the Trustees. It had sent two further letters in January 1985. The NBA expected to discuss that issue with the Trustees at the September meeting.

The first applications to the Trust were announced to the Executive –

$25,000 for Denis Anderson’s research into bee diseases
$1,000 for bursary for Telford Farm Training Institute – 1984 and 1985

The Executive was under the impression that its own application, for $561, had also been approved, but it was not on the list. It was left to the Executive Secretary to take that up with the Trustees. It was later paid to the NBA by the Trusts.

https://www.beekeeping.nz/NZBDA/NZBkpr/1985_09_NZBkpr.pdf#page=12

September 1985

The HMA was finally, fully dissolved by way of a notice in the NZ Gazette, appearing on 29 August 1985, giving the final dissolution date as 31 August 1985.

https://library.victoria.ac.nz/databases/nzgazettearchive/pubs/gazettes/1985/1985%20ISSUE%20160.pdf#page=15

At the NBA Executive meeting several days later, David Kay sought the opinion of the NBA on transferring $50,000 from the General Trust to the Charitable Trust. The NBA supported that suggestion. New procedures for applicants would have the Trust inform successful applicants, and the NBA would notify unsuccessful applicants.

https://www.beekeeping.nz/NZBDA/NBA_minutes/1985_Exec_minutes.pdf#page=23

A Meeting of the NBA, the Co-op and the Packers Assn

On 9 September 1985 a meeting was held to discuss the development of a common marketing policy, as recommended by the recent conference remit.

All six NBA Executive members attended (it was the morning of the first day of the September Executive meeting) – Ian Berry, Allen McCaw, Keith Herron, Tony Lorimer, Dudley Ward and Gavin White. The Co-op was represented by Noel Dellow (Chairman), John Nimmo (General Manager) and Steve Lyttle (Director). The Packers’ Association was represented by Russell Berry (President), Peter Bray and Robert Davidson.

David Dobson, the Pork Industry Board’s General Manager (and formerly NBA General Secretary) chaired the meeting. Steuart Goodman (NBA Executive Secretary) kept the minutes.

There was probably some animosity during the meeting. The Co-op, in an opening statement, said that they “… [were] not there to be cross examined.”

Ultimately, the meeting did not really make a lot of serious progress. They agreed that the NBA would co-ordinate an information and crop forecasting service, involving the Co-op, Packers and MAF. The meeting agreed to a committee to investigate further market research opportunities. John Nimmo (for the Co-op) and Dudley Ward (for the NBA) would be on the committee, which hoped to report by December. Peter Bray was chosen for the committee by the Packers’ Associaton.

https://www.beekeeping.nz/NZBDA/NBA_minutes/1985_Exec_minutes.pdf#page=28

https://www.beekeeping.nz/NZBDA/NZBkpr/1985_12_NZBkpr.pdf#page=11

Teething Problems for the Trust Applications

As the 1985 year finished the NBA noted that the call for applications and the closing dates had not been printed in the current issue of the NZ Beekeeper, as the Executive had requested. The Executive Secretary was asked to write to the chairman of the Trusts to determine the outcome of an application that had been made by MAF. The NBA also sought clarity from the Trustees that $50,000 had been transferred from General Trust to Charitable Trust. And there were still references to unanswered correspondence by the Trustees.

Even by the following March the NBA was listing non-response from the chairman of the Trustees to three topics raised with them relating to specific Trust applications.

1986 NBA Conference – Rotorua

Ian Berry’s final president’s report to the conference said that at the end of 1985 the Trusts had a total balance of $875,000, and a tax paid income of $63,000 for the year. The largest commitment to date has been toward funding Dr Denis Anderson’s work on bee viruses, a total of $37,500 over three years.

https://www.beekeeping.nz/NZBDA/NZBkpr/1986_09_NZBkpr.pdf

Allen McCaw was elected NBA President, replacing Ian Berry. About six years later, Ian Berry would be appointed an Industry Trustee, replacing his brother Russell Berry in that role. Russell Berry had been successful in his election as an NBA Executive member, and had indicated that he would stand down as Trustee to avoid any conflicts of interest.

It would be another 25 years before Allen McCaw would be selected to replace Ivan Dickinson as the South Island Trustee.

Shortly after being elected NBA President Allen McCaw explained why a previous request from the Waikato branch had not been carried out –

“Mr McCaw reported that the Executive had considered the Waikato Branch recommendation that the Executive ask the Trustees to give a report to conference, but was against such a proposal on the basis that it was desirable to retain the impartiality of the Trustees. It was suggested that grants awarded be recorded in the Association’s Annual Report.”

https://www.beekeeping.nz/NZBDA/NBA_conferences/1986_NBA_AGM.pdf#page=17

The Trusts Settle in to Operations

The funding from the Trusts was instrumental for many activities carried out to improve the honey industry in the following years. The relationship of the Trustees and the NBA Executive continued to concern the NBA, however. There are various references to lack of timely communications.

https://beekeeping.nz/NZBDA/NBA_minutes/1989_Exec_minutes.pdf#page=15

https://beekeeping.nz/NZBDA/NBA_minutes/1989_Exec_minutes.pdf#page=31

In 1989 the Trustees agreed to provide a financial summary and details of the grants that the Trusts had made in that year.

https://beekeeping.nz/NZBDA/NBA_minutes/1989_Exec_minutes.pdf#page=36

1992 NBA Conference – Hastings

At the 1992 NBA conference in Hastings, the Waikato branch President and delegate Russell Berry introduced a remit calling for the NBA to replace one Trustee every two years, making a Trustee’s term of a maximum of six years. The conference did not accept the recommendation, voting 3-9 by the branch sticks.

https://beekeeping.nz/NZBDA/NBA_conferences/1992_NBA_AGM.pdf#page=12

1994

As late as 1994 the NBA Executive was still trying to work with the Trustees to ensure a timely consideration and reporting for the Trust applications..

https://beekeeping.nz/NZBDA/timeline/1994_12_Various_Trust_related.pdf

And After That…

This article doesn’t provide the details of the times through the 1990s for the most part. There have been a few Trustee changes, some described here. No attempt has been made to identify all of the disbursements of the Trust(s). That could make another article in itself.

And it is “Trust(s)”, as now there is only one – the Honey Industry Charitable Trust. After a number of years of legitimately moving money from the General Trust to the Charitable Trust, in 2006 the General Trust was wound up, with the Trustees now managing only the Honey Industry Charitable Trust.