The motion standing in Senator Baxter's name deals with a problem which has assumed its present interest and importance on account of the war situation, but I think it is only a special aspect of a general problem which is always with us, and part and parcel of what we should consider in framing our general agricultural policy. In this connection I should like to say that, although not a member of that body myself, I think that it is a thousand pities that the Agricultural Commission has suspended its sittings or has had its organic existence terminated for it, because already it has done valuable and important work and it could continue to add to the services it has already rendered in dealing with problems of this nature and other problems. I think, in fact, however, that there is reason why we should investigate, at the same time, the special problems of our present abnormal situation and the permanent problems which we have to solve in framing a long-term agricultural policy.
Now, as far as I understand the matter, the present crisis with regard to prices has arisen in this way. It has arisen especially with reference to the prices of oats and barley. Last year, when the war broke out, everyone anticipated a shortage of cereal products as well as of other forms of foodstuffs, and Government policy rightly urged and, in fact, compelled our farmers to extend the area under cultivation so as to increase as much as possible the quantity of home-grown cereal and other products that would be available as food for man and beast. Now, last year, owing to the effect of the war situation the prices of all cereal products rose to a very high level, and at the prices current last season there was no difficulty whatever in inducing farmers to extend their cultivation of oats because oats at that time—or during the latter period of the season at any rate—were as high as 13/6 a cwt.
The price of oats last March was 13/6 per cwt. With a price like that farmers were certainly more than willing to maintain and expand the cultivation of oats, but I noticed at that time, although the price of oats was rising enormously, the prices of the other things for which oats is used as the raw material had not risen in the same proportion. Eggs went up in price and also beef, but not in the same proportion as the increase in the price of oats. The result of that was, owing to the high cost of feed, that poultry keepers in particular found that egg production last winter did not pay, and did not look like paying, and consequently they cut down poultry stocks wholesale. As a result there were not enough birds and animals in the country to eat up all the available oats at the then existing price. A good deal of that oats was carried over to the new crop season, and when the new crop came along and was added to the available supply there was still the same problem, of an excess amount of home feeding and an inadequate number of birds to eat it. The reason for that curious phenomenon was this, that the relation between the price of oats and the price of animal products had got out of proportion.
We cannot in our agricultural economy carry on with any degree of comfort unless there is a suitable price regulation between the various aspects of our agricultural cultivation, so that the price of oats is reasonably profitable for a man who specialises in oats while, at the same time, the man who specialises in animal products will find that it will be profitable for him, even if he has to buy oats from his neighbour. The price was dislocated by the unexpected events of last winter, and oats fell to a level which was not profitable from the point of view of the oats producer. As an egg producer in a small way, I regard the present ridiculously low price of oats as something that I feel will be of temporary duration, because, owing to the unprofitable level of the price of oats to producers, I fear the danger that, in the next season, farmers will not be so enthusiastic about producing oats and, in spite of compulsory tillage, there may be a shortage then, following the temporary glut of this season and that then will come the turn of poultry producers to feel the effects. At the moment the position is favourable to them and unfavourable to oats producers. I want a situation in which every branch of our agricultural production will know that they are on an even keel, so to speak.
In the nature of the case, and in the circumstances of our agriculture, about 70 per cent. of the oats produced in Éire is not consumed directly as human food, but is used indirectly on further agricultural production, and finally goes to market and is exchanged for money in the form of eggs and beef or some form of animal product, so that oats, generally speaking, is not a commercial crop. It is a crop which, from the point of view of our agricultural economy, is produced as raw material for producing other things. That makes it practically impossible to fix a price for oats in the same kind of way as the Government, as we saw, successfully fixed a price for wheat, because so much of the oat crop is not sold at all as oats but walks off the farm on four legs or in the form of eggs. However, the fact remains that, in any kind of normal circumstances, in the long run the price of oats is governed by the price of the products for which oats is used as raw material. Eggs are one of the products and beef is another, because I understand that crushed oats are an important element in the ration in the now lost art of stall feeding fat cattle.
I had the curiosity to work out the proportionate relation between the price of oats and beef for the last 60 years, bearing in mind that it takes about 4 cwt. of a cereal product, of which oats forms an important ingredient, to produce 1 cwt. of beef live-weight, I compared the annual average price of 4 cwt. of oats and beef by 1 cwt. live-weight, and I found in the normal year that the price that 4 cwt. of oats bore to the annual average price of 1 cwt. of beef was remarkably close to 70 per cent. The variation was from 70 to 75 per cent. and was very slight. In other words, with the price of 4 cwt. of oats in or about 70 per cent. of the price of 1 cwt. of beef live-weight, then our economy is on an even keel, and it pays to use oats as feed for the stall feeding of live stock. That proportion means that if 4 cwt. of oats cost 32/-, with beef at 45/- per cwt. it should pay to stall feed. If the price of oats rises more than the proportionate price of beef, then the proportion is increased above the 75 per cent. level, and the stall feeding of cattle will be discontinued.
Actually our oat crop year by year is only a matter of about 12,000,000 cwt. and tends to diminish, although in the present season, on account of the expansion of our oat crop it has increased in a gratifying way. There are nearly 20,000,000 poultry in the country, and according to the books a hen, if let, will consume about 1 cwt. of cereal products in a year, and about half of that may well be native oats, or if our hens got all the oats they would like to get, they would go far towards using our whole oat crop. Personally I do not believe they get anything like the amount of oats they would like to get, or that they should get, but if our poultry population was properly fed I do not think this glut of oats would be so much in evidence and we might find that we have not half enough of oats, instead of having too much.
On the other hand, the diminution in the population of poultry has undoubtedly diminished the demands for the oats that are available, and has made it impossible for farmers who specialise in producing oats to realise those oats at a profitable price. The fundamental trouble, which accounts for our failure to use up the oat crop of last year and from which arose our difficulty in using up the oat crop this year, is the fact that the stall feeding of beasts has been discontinued now for many years and has not been revived to anything like the extent that is desirable in the long-term interest of our agricultural economy.
Reverting to that proportional thesis, I pointed out that, with 4 cwt. of grain about 75 per cent. of the price of 1 cwt. of beef live-weight, stall feeding was a profitable practice. For a number of years, however, during which the so-called economic war raged, that proportion was raised from about 75 per cent. to about 120 per cent., and no farmer was going to be fool enough to feed 3d. worth of grain in order to produce 2d. worth of beef. Now, on account of the very special circumstances that existed during this year, with stall feeding out of fashion—and it is not being revived—at the price relation between beef last winter and oats last winter, it was not profitable to stall feed. Oats were too dear and beef was too cheap. At the present relation between the price of beef and the price of oats, it would appear to me—looking at it as a mere matter of theory—that it ought to be profitable once more to revert to the practice of stall feeding.
However, there again we are up against another difficulty, and this time a difficulty not of our own creation but created for us by our neighbours. The British differentiate between the price they pay for beef which has been reared and fattened in their own country and beef which has been produced in this country, sold to them as stores, and only finished in their country. The position is that they give a pretty large differential price for beef which is altogether of their own production and a price which is about 10/- per cwt. less for beef which they import from us and kill immediately after importation. In practice, what happens is that our cattle go out, perhaps nominally as fat cattle, but after three months' stay in Northern Ireland or Great Britain they qualify for a lesser degree of subsidy, which adds about 5/- or 7/6 a cwt. to the price, as compared with the price if they did not get that subsidy. The effect of that three months' rule is that, from the point of view of a person selling a forward store in this country which would be ready for slaughter in March, if he kept it here and stall fed it during the winter, and sold it in March, he would only get the beef price for imported beef fit for slaughter which is, as I say, some 7/6 or thereabouts less than is otherwise obtainable.
On the other hand, if he sells it in January to somebody who keeps it for three months in the other country, that person can look forward to getting a differential price after three months, and the result is that the man selling the beast in January may look forward to getting a price nearly as high as if he kept it for three months more. During that final three months' interval, the animal will lose as much in the price per cwt. as it will gain in the net weight, and, consequently, the final three months, in the case of the fat beast, is not considered profitable for our farmers, and therefore stall feeding is not practised here to anything like the extent to which it should be. This differential price, which has put stall feeding out of the question for our farmers, is a price imposed by the British in their own supposed interests. They ought to be the best judge of their own interests, though—looking at it as an impartial outsider—I say that it should be in their interests now that we should feed and fatten as many cattle as possible during this coming winter, and sell them only when fit for slaughter.
By imposing this differential price, they compel us to unload on them in January cattle which would be better if kept until later. If we could get the British to alter that three months' rule to, say, one month, it would make the stall feeding of fat cattle profitable once more. Then, far from having a glut of oats and selling it at a rotten price, we would find that there would be hardly enough oats in the country to meet the increased demand. That is the primary and most important way in which we can use our oat crop.