I move the following amendment:—
Before Section 23 to insert a new section as follows:—
"The duties of Excise chargeable on tobacco grown in Saorstát Eireann under Section 7 of the Finance Act, 1918, shall cease to be chargeable or leviable as on and from the First day of January, 1930, and no duty of Excise shall be chargeable or leviable on tobacco grown in Saorstát Eireann which is sold or kept for sale in Saorstát Eireann as on and from that date."
I would like before moving this amendment to say that it would be a good thing if the House agreed to a free vote. That is one privilege I ask for and the other is that the Ceann Comhairle would give as much licence as he may think it is possible for him to give during the discussion on this question. I know very well that the Minister for Finance and others will consider that this is a very big question. I am aware that something approaching three and a half million pounds in revenue is obtained from tobacco. It is at present almost entirely on customs or imported tobacco that that revenue is obtained. It is undoubtedly an extremely heavy tax, especially on the poorer class of people who are unfortunately the most numerous in the country. Several attempts have been made to revive this industry. We have had schemes and we have had subsidies and rebates of duty. They have all failed but that is no reason why the industry itself should be a failure in Ireland. There are times when industries are started, when cooperative organisations are started, times of big prices and perhaps times of abnormal prosperity when in reality it is not good for either cooperative organisations or industries to be started. People are inclined at such times to take abnormal viewpoints, which afterwards have serious reactions when we get into a normal position. A rehandling scheme was started in the tobacco industry which would undoubtedly have been successful — and which was, in fact, to a certain extent successful — but for the particular period of prosperity in which that occurred. We find that tobacco was grown then in competition with other crops which had a guaranteed price, a price which was higher than that paid for tobacco. It was then an infant industry.
People had not a great deal of experience, and it was not quite so well understood as other crops, with the result that farmers naturally went in for crops which, at the moment, gave them the greatest returns. In those particular times, those other crops gave that special return. Afterwards, when that scheme had fulfilled its time, a rebate of duty was given. That rebate had very extraordinary effects, because the Minister for Finance, and perhaps the Minister for Agriculture, will at once multiply that amount of rebate by 800 pounds, which is supposed to be the produce of one acre of tobacco, and will tell us candidly that the farmer pocketed that amount. That, of course, is not the case. The farmer, under those conditions, pocketed no money whatever except what the manufacturers cared to pay him. The manufacturer may have pocketed the rebate, so that that method was not a good one for reviving the industry. I have, in fact, heard a man who knows the industry pretty well say that if the intention really was to kill the industry, the proposal made to revive it would have effected that end. Tobacco, unfortunately, from the time it was first introduced into this country, became a means to political ends, and at other times it actually entered into international politics. Charles II. found that it was a good method for raising revenue, and he proceeded to prevent the growth of the crop in any of these islands, because he had the monopoly of colonially produced tobacco. The only colony that produced tobacco was the United States. Of course, it was not the United States then. We find, at a later period, that what is the United States now did not at all agree with the economic policy under which it had to live, so it decided to change things by force, and it did so. The British Government, in order to intimidate that country to a certain extent, allowed tobacco to be grown in Ireland, but there was a proviso that it should not interfere with the commercial prosperity of England. The crop was grown most successfully here, and up to 1830, after 100 years experience, the crop was well and properly grown.
We had then begun to compete with the biggest tobacco producing country of the world, the United States. We were then, according to statements made in the House of Commons, the only country capable of competing in quality with the United States. As it interfered with commercial interests in England and as London manufacturers found that Irish manufacturers were able to produce tobacco of superior quality and at greatly reduced prices, they at once took steps to crush the industry here. We find that in that year, 1830, amongst many who lamented the industry from the point of view of the employment it gave and from the point of view of the cultural effect it had on the people of Ireland, especially the farming community, was the Royal Dublin Society. They lamented the fact that unemployment would increase and they wondered at that time what would become of the people engaged in the industry. There were then thirty-two factories in Ireland and in County Wexford as much as a thousand acres of tobacco were grown. Before the Union an Irish acre produced 15 cwt. of tobacco. The producers got one and sixpence per pound and the Government of this country which then was the Parliament in College Green, in order to protect the industry, levied a duty of three shillings per pound on imported tobacco. It is an undoubted fact that Ireland from the agricultural point of view was then in a most prosperous condition. That prosperous condition excited the jealousy of the British Government and they at once took steps to bring about the Act of Union. I believe if we adopted to a certain extent the method then adopted to protect agricultural industries we would be successful. In moving this amendment, I am not asking for any subsidy or any rebate. Neither am I asking the taxpayer to contribute any sum of money. Therefore, I am in agreement with the Minister for Finance. As long as we do not interfere with the revenue or ask the taxpayer for anything else, I am quite sure we agree.
Another point in connection with the industry is this: This amendment, if passed, will not come into force until January next. In order to grow a crop of tobacco next year, it will be necessary to sow the seed in February and March. The plants will not be planted out until May and June, and the crop will not be harvested until September and October. The tobacco itself will not be ready for manufacturing for almost nine months or a year after that. Therefore, before anything at all could possibly happen to affect the revenue, two full years would have to elapse. After the two full years have elapsed, and if on the second year the industry is revived and home-grown tobacco replaces any of the imported tobacco, there will be a small loss, perhaps, in revenue, but it will be very small, and, like most other industries, especially agricultural industries, we may take it that there will be no displacements of revenue of any kind for at least three full years. If the then Minister for Finance finds that the displacement is very serious, he has his remedy. He has succeeded in establishing an industry, which is a native industry, and which will undoubtedly be capable of producing some revenue. The Minister for Finance will have made an investment, I hope not for himself, but for some Minister for Finance who may succeed him. At any rate, I take it, it is the duty of the Minister for Finance to make such an investment. As the amendment is not going to cost anything within the next two years that the country cannot stand, I do not see what objection the House should have to accepting it. There are a few difficulties, as I said before, but the Revenue authorities, with their ability, will easily get over any difficulties that may arise.
There was one point that struck me. I do not know much about revenue laws, but it struck me that certain trouble may arise in regard to stalks and wastes. As I understand the matter, on the imported article a certain rebate is given to manufacturers on what are called wastes and stalks. If an industry were started under those conditions, I am quite sure that subsidiary industries, such as the manufacture of nicotine and other things, would also be started. These would encourage the farmer to sell his stalks to the manufacturer in order that he might get a larger rebate. I am quite sure that the rebate could be easily settled on the question of averages. The revenue authorities must have data sufficient to calculate what would be the average rebate on a ton of tobacco for the last three or four years. That would not present any great difficulty.
There are no other difficulties that I see. We have only adopted this system of taxation of tobacco because of habit. I am quite sure the Minister will admit that he found it there, and found it very convenient and handy as there is not very much trouble in the collection of the tax. But I believe that the time has arrived when we no longer can use handy methods and no longer can get money by any of these handy methods. That is the reason that tobacco has been singled out as being a commodity that can be taxed indirectly with the greatest amount of convenience to the revenue authorities. The present tax was a war tax. It was a tax started when they multiplied £1 by two and got £3. These conditions do not prevail to-day, but the tax is the same, so that it is bearing rather heavily on the people whose income is greatly impaired. In those days people looked on tobacco as a luxury, but we have ceased to look on this industry as being anything in the nature of a luxury one. Tobacco is to-day to most of us a necessity and, therefore, that taxation habit should cease as far as possible.
It would be well in considering this to see what the world outside is doing. We find that the British Government some years ago decided to encourage the growth of tobacco in their colonies, and they gave 2/- preference on the British market. If we had the plant grown here and had a free market we could avail of that 2/- in selling any surplus. At present we cannot do that. Several commissions were set up in Great Britain to inquire into this matter. The Imperial Economic Committee's reports are rather interesting reading, and they give very definite figures regarding the position of tobacco-growing in the colonies. They tell us that in Nyasaland and in some of the South African colonies the industry is looked upon by the people as being their only hope from the agricultural point of view. But Nyasaland and some of the South African colonies do not seem to have the advantage of a free home market. They have not the advantages that Canada and other countries have. In order to give an example of what a home market really means to the industry, and what bearing it has on the prosperity or success of the industry, I may say that the following is the position, the figures given representing thousands of pounds. You have India, probably one of the greatest tobacco-producing countries in the world, and also one of the greatest consumers. Of every thousand lbs. grown in India, 970 lbs. are consumed in India and 30 lbs. exported. Canada, which is more or less similar to this country in conditions, and to a certain extent in history, has a local production of 47. She consumes 38 of that in her home market and exports 9. The production of the Union of South Africa is 20½. They consume 11 and export 9½, whereas Nyasaland and Southern and Northern Rhodesia export all that they produce. Their exports are: Nyasaland, 8 millions; Southern Rhodesia, 16; and Northern Rhodesia, 2½. There you have had the least development. The industry there gives the least employment because they have not any home market.
It may be said that we cannot smoke the tobacco grown in Ireland. In fact, people stated that it could never become a habit with the people. We find, however, in South Africa something of the same conditions prevailed. As the taste in smoking, like a good many other tastes, is simply an acquired one, we find that in all these countries price governs the taste, and that if a new commodity is introduced, like tobacco, and the manufacturer can get it at a reasonable price, and has a reasonable chance of continuity of supply, he will take that tobacco and put it on the market and sell it, and it will be acceptable at once to the purchaser. What happened in this country previously was that we never had either of these things. We did not have the tobacco cheap, nor did we have any chance of continuity of supply. As to South Africa, this is what the Committee stated on page 26:
"In South Africa cigarettes made from imported American leaf have been practically ousted by those made from local growth. There is a parallel change in progress in the United States to-day, where cigarettes of blended tobaccos of Virginian and Turkish types are gaining ground at the expense of the purely American."
That is a matter of taste. One of the arguments put up here has been that Irish tobacco would not be smokeable. We have it, however, on the authority of at least one of the managers of a very large firm here in Ireland that he is prepared to blend a very high percentage of Irish-grown leaf, and that it can actually be sold to the public without the public knowing that. Of course, it is known in all countries that new seed introduced into a country is neutral. The flavour of the plant is to a certain extent neutral for a number of years. Until the seed gets a sort of naturalised and acclimatised it will not adopt any definite flavour. Several experiments have been made here, but most of them were confined to one class of tobacco —the strong dark leaf, which grew without any trouble. That is practically the usual class of weed— because tobacco is really a weed— which grows without any difficulty. There was no encouragement, and perhaps permission was not given, to grow the other, which is the most important leaf to-day—that is the cigarette leaf. We find that in different counties plants of different qualities will grow. Kilkenny produced a really good class of cigarette leaf, while we have to-day a really good cigar being produced in County Wexford.
That brings me back to the point as to why I asked that the duties and restrictions should be removed. There are certain conditions which at present the revenue authorities will exact from the tobacco grower and one of these conditions is actually in existence in the County Wexford. There we find that an individual who is growing tobacco even against these odds, in order to comply with the excise regulations was compelled to build his factory at least three miles away from where the tobacco was grown. And he had to enter into very heavy bonds and at present such bonds are not easily obtainable. The result of the Agricultural Credit Corporation operations is a proof of that. People are timid in going security for individuals throughout the country for any purpose whatever.
These are some of the restrictions which I would like to see removed in order that the industry may have a fair chance and which will be gone into more deeply later on. The present position of the tobacco industry is that the colonies which in the world production have an advantage of 2/- preference, have made great progress. Of all the countries that have made progress in this direction Canada is the foremost and as I said a few moments ago Canada is a country that in climate and otherwise is most akin in conditions to those here. I am aware that statements were made that tobacco is a tropical plant and that we might as well try to grow tea or sugar cane. Of course I know these statements were made in a humorous way and that there was nothing serious about them. The person who made these statements did not mean them to be taken seriously because tobacco is grown all over the world. We find the Canadian Government are taking very definite steps to still further encourage the production of the plant. At the present time they are actually making a survey of land suitable for tobacco production, in order that that land may be earmarked for that purpose. To say, therefore, that the industry would be of no importance would be completely wrong. The industry is one that employs a great number of people. It is an industry which the small farmer can profitably engage in provided he gets these particular opportunities. It is an industry into which the human element very largely enters. The grading and handling of tobacco cannot be done by machinery. It is an industry in which the chief work is done when other work cannot be done and one of the best parts of it is that in order to grow half an acre or an acre of tobacco you must have tilled at least four times as much as you grow in tobacco. The crop is only a short time in the ground after which catch crops can be very successfully grown and one of the most successful catch crops that can be grown is wheat. The land is perfectly clean. I do not mean that wheat can be grown in big quantities but I mean that wheat can be grown for the purposes of the small farmer and for his own use. That has been done previously and with great results and it can be done again. It is with confidence that I ask the Dáil to accept this amendment.