asked the Minister for Finance whether any agreement was made with Messrs. Lippens prior to 16th June, 1925, in respect to the erection of a Beet Sugar Factory, and the amount to be given by way of subsidy; if so, will he state the general import of the agreement and lay on the Table of the Dáil a copy of same; whether any agreement was made with Messrs. Lippens or the Irish Sugar Manufacturing Company subsequent to the 16th June, 1925 (the date of the Second Reading of the Beet Sugar (Subsidy) Bill, 1925); if so, will he state the general import of the agreement and lay on the Table of the Dáil a copy of same.
CEISTEANNA—QUESTIONS. ORAL ANSWERS. - CARLOW BEET SUGAR FACTORY.
TOMAS MAC EOIN
No formal agreement was entered into with Sir M. Lippens prior to the 16th June, 1925, in respect of the erection of a Beet Sugar Factory or of the amount to be given by way of subsidy, but after a considerable amount of correspondence and informal discussion Sir M. Lippens had been notified on 30th March, 1925, that the Government was prepared to agree in general terms to certain proposals which he had made. A formal agreement was made between the Minister for Finance and Sir M. Lippens on the 1st October, 1925, which agreement was adopted by the Irish Sugar Manufacturing Company on the 26th February, 1926. A summary of the proposals and copies of the Agreement referred to will be laid on the Table of the Dáil. The only difference of importance between the proposals and the formal agreement relates to the sugar production on which subsidy would be payable in the first three years of the ten-year period. At first it was proposed that the Company should be authorised to produce 10,000 tons annually in the ten-year period, with the right to increase the annual production to 15,000 tons in the last five years of that period. The formal agreement, however, provided for the payment of subsidy on the total amount of sugar produced in the factory in the first three years of the ten-year period, and fixed the maximum production on which subsidy should be payable at 10,000 tons per annum in the next two years and 15,000 tons per annum in the last five years of the period, subject to an over-riding maximum of 125,000 tons in the whole period. The concession with regard to the first three years of the period was made because there were at the time of the agreement no reliable data with reference to the production of sugar beet in the Saorstát on a commercial scale, and no one could state with any certainty how many acres of sugar beet would require to be under cultivation in order to produce 10,000 tons of sugar. The Company consequently did not know with certainty at that time what acreage to aim at in making their contracts with beet growers. In order to secure the best terms for the farmer it was necessary that three-year contracts should be entered into, and the Government considered it reasonable to make some concession as regards sugar production in the first three seasons, when a high price to growers was insisted upon under the Beet Sugar (Subsidy) Act. It was recognised that a good beginning was essential to the success of the enterprise.
It will be seen that at no period was the amount of sugar on which subsidy was payable limited to 86,000 tons over the whole ten-year period. When I was making my annual Financial Statement on the 22nd April, 1925, I used the following words:—"The amount of sugar which will be manufactured in the factory here is, of course, problematical, but it has been roughly estimated that the amounts will be 5,000 tons of sugar the first year, 6,000 tons of sugar the second year, 7,000 tons of sugar the third year, 8,000 tons of sugar the fourth year and 10,000 tons of sugar each of the next six years." After giving an estimate of the amount of subsidy based on these figures I went on to say:—"In view of these figures and the fact that they might actually be exceeded, it is obvious that prudence dictates that we should not commit ourselves to more than one factory till our knowledge of all the factors governing the situation is considerably wider than it is at present." Again on the Third Stage of the Beet Sugar (Subsidy) Bill I stated on the 24th June, 1925, that it would be in the interests of the factory to get not merely 5,000 acres, but 15,000 acres grown if it could. The estimate of 86,000 tons in the ten-year period was based on the expectations of Sir M. Lippens and his associates, and was accepted by the Department of Agriculture. It must be admitted frankly that everyone concerned under-estimated the enterprise and adaptability of the Irish farmer.
Does the Minister recognise that he also said that the proposed cost of £2,000,000 is not greatly in excess of the experiment at Cantley, and the whole discussion centred round the idea of £2,000,000?
That was the best estimate that could be given, but it is quite clear that it was only an estimate. It is also quite clear that it was desirable to have more if it could be got.
Does the Minister suggest that there was any suggestion during the discussion that the State might be involved in the payment of £3,000,000?
It was certainly suggested that the State might be involved for more than a subsidy on 86,000 tons.
Having regard to the agreement between the Government and the factory in October, what will the real commitment be under that agreement?
I have said that it is on 125,000 tons.
How much does that represent in money?
Three millions.
No, that is what I want to get at. The subsidy on 125,000 at £23 a ton is £2,800,000.
The Deputy has omitted the fact that the subsidy includes not merely the subsidy actually paid but the benefit which the factory gets by having no customs duty charged, while customs duty is charged on incoming sugar.