Dáil Éireann debate -
Wednesday, 6 Jul 1927

Vol. 20 No. 6

ORDUITHE AN LAE. ORDERS OF THE DAY. - VOTE 29.—BEET SUGAR SUBSIDY.

MINISTER for FINANCE (Mr. Blythe)

I move:—

Go ndeontar suim ná raghaidh thar £198,000, chun íoctha an Mhuirir a thiocfidh chun bheith iníoctha i rith na bliana dar críoch an 31adh lá de Mhárta, 1928, chun Congnamh Airgid d'íoc ar scór Siúicre Bhiatais (Uimh. 37 de 1925).

That a sum not exceeding £198,000 be granted to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1928, for payment of Subsidy in respect of Beet Sugar (No. 37 of 1925).

The provision in the estimate is for a total production of slightly over 13,000 tons. It is well to say at this stage that it may be that that sum will not be sufficient and that an additional sum will have to be provided. It is not possible to say what that additional sum will be. It will depend partly on the yield of this year's beet crop and on the sugar-content of the beet actually supplied to the factory. The total amount paid by way of subsidy last year was £181,502 4s. 9d. That was less than the total sum voted, including both the original and supplementary estimates. The subsidy was paid on 11,979½ tons of sugar. There is no limit on the amount of sugar that the factory may produce and on which a subsidy may be paid during the first three years. But in the two years following, the subsidy will only be paid on 10,000 tons of sugar, and in any one of the last five years on 15,000 tons of sugar, but it will not be paid during the whole period on more than 125,000 tons. Therefore, if it is paid on more than 12,500 tons in any one of the first three years, the amount on which the subsidy may be paid in subsequent years will be reduced.

There is no doubt that the success of the factory was greatly facilitated by the fact that during the first years there was no limit on the amount on which the subsidy might be paid, so that the factory was able to go out and do its best to get growers. For a long time it did not seem as if it would be able to get sufficient growers, but it was able to go all out for getting growers and was not compelled to make any nice calculations as to whether the acceptance of growers would lead to exceeding some limited figure or not.

Mr. HORGAN

Would the Minister tell the House what is the policy of his Department as regards any future factories that an offer may be made to start? Would the policy of the Government be the same for any new people as it has been for the firm in Carlow?

AN CEANN COMHAIRLE

resumed the Chair.

Mr. BLYTHE

No decision could be come to until we had experience of another year's working, or perhaps two years' working, because we do not know exactly what profits a company may rely on. We do not know what may turn out over a number of years to be the average yield of sugar, or the average yield of beet, or the difficulties factories may encounter in their working. The audited accounts of this particular factory will be presented to the Minister for Finance in respect of the first year's working some time before the end of September, next, and when we have that set of accounts, including the profit and loss account, and when we have, perhaps, another set of accounts, we will then be in a position to see what exactly are the prospects of the industry, what subsidy it would be reasonable to offer a subsequent factory, and what are the prospects of the industry becoming established here, so that it could carry on on some very low subsidy, or perhaps ultimately without subsidy at all. But I do not think that we would be justified in agreeing to the erection of another factory until we had some further experience. The experience of the first year was, of course, extremely encouraging. It was an experience that would lead us to believe that we would be justified in agreeing to the establishment of further factories, and that the industry will become a most important one here. But it might happen that last year was an altogether exceptional year, and that the results over a period might be very much less satisfactory. In any case, while we can take the utmost encouragement from the results of the first year, we would require further experience before it would be fair to agree to the opening of another factory. We require more experience in order to know what would be the amount of the subsidy that we might reasonably agree to. We had to agree to a high rate of subsidy in order to induce people to come in here, where no sugar beet had been grown, where nobody knew what difficulties would be encountered, but a subsequent factory would not be entitled to receive anything like the present subsidy.

Mr. HORGAN

Would the Minister be prepared to receive representations from reliable people in connection with the erection of a factory, especially in view of the amount of unemployment, and the help that it would be in relieving it?

Mr. BLYTHE

I would say not for at least another year.

Mr. HORGAN

Am I to understand that the policy of the Government is that no representations will even be received for another year from people interested in starting factories and giving employment? Surely that cannot be the policy of the Government?

Mr. O'GORMAN

I should like to know if the Minister has seen the statement that 1,000 tons of pulp, the residue of this beet, has been shipped from Dublin to the United States, and if he can tell the House what effort has been made to familiarize the Free State farmers with the use of this pulp, and also at what price was this pulp offered to the Free State farmers and at what price was it sold to the American purchaser?

Mr. BLYTHE

In regard to the latter point, I could not give the information. I would say that one of the most important ways, of impressing Irish farmers with the value of the pulp would be to let them know that American people were willing to buy and use it. I happened to have a conversation with some of the officials of the factory about this question of the use of the pulp early in the last campaign, and they told me at that time for the first year or two they were not very hopeful of being able to dispose of anything like the whole of the pulp here, but that they did believe that in the course of a few years farmers here would become familiar with its value and certainly take a very large proportion of it. I understand, as a matter of fact, that the English factories have had to send a large proportion of their dried pulp to America. As to the question of price, I could not give any information to the Deputy at present, but you could not expect at any time that they should sell the pulp here at less than market price. I do not think that it would be desirable that pressure should be put on them in regard to the price at which they should sell the products.

Mr. O'GORMAN

Having regard to the statements that were made in connection with the starting of a factory, and the extremely high subsidy that is being paid, I think I am entitled to the information. I am not guaranteeing the accuracy of this, but I have been told that it was sold more cheaply to the Americans than it was offered to the Irish farmers. In view of the fact that Messrs. Lippens are getting a subsidy higher than the first cost of the article, higher than the article could actually be bought for, I think that the Irish farmers are not being treated fairly.

Mr. JOHNSON

I should like a little more information as to this decision which the Minister has announced— that the Government are not prepared to consider the question of a second factory before September, 1928. I should like to know when that decision was come to—whether it is since the election or before the election. If since the election, whether we can take it to be irrevocable; whether it is the new Executive which has come to the decision, and whether it is unconditional. For instance, there has been an increase in the price of sugar within the last year since the factory was first mooted. The price may continue to be high and it may even rise further. There are possibilities that other people may offer to establish a factory here and be prepared to go into the business for a much less subsidy. They may even offer a rate of subsidy which they would be prepared to build at. Are we to take it that in no case is the Government prepared to consider the erection of a second factory until after two years' experience and two years' accounts have been presented?

I am sure it will be received with dismay by many people in Cork County that the Ministry have no thought of assisting the establishment of another factory until at least September, 1928, because they were certainly given to understand that there were immediate possibilities in that direction. I think that in Offaly and other parts of the country similar projects were held out as likely possibilities. But Cork particularly is interested in this matter; they have almost begun to consider who is going to get employment in the factory. If we are to have it now definitely as a matter of Executive decision that no consideration is to be given to the licensing of another factory before the second year's experience has been shown in accounts—that is September. 1928—then the people of Cork will know exactly where they are, and they will not be building upon a false foundation. There are undoubtedly parties interested at present and seeking information as to the possibilities of getting a licence for building a new factory, and I think we should have some information as to the conditions which accompanied this decision—whether there are any conditions or not, or whether it is a complete denial of any possibility that a new factory will be established anywhere until the second year's experience has been proved.

MINISTER for LANDS and AGRICULTURE (Mr. Hogan)

With great respect, the point the Deputy has made is so much talk. If anyone comes along and offers to establish a factory without a subsidy we will accept it.

Mr. HORGAN

Thank you.

Mr. HOGAN

If anyone comes along and offers to establish a factory with a subsidy of 5/- or 10/-, we will accept it, and I have not consulted the Minister for Finance about it. It is when we come to 12/-, 13/- or 14/- that we have to talk business.

Mr. JOHNSON

Are we to take it that 14/- is the limit?

Mr. HOGAN

No, certainly not. That is not business, as the Deputy knows, and as Deputy Horgan also knows. It is when we go above 10/- 12/- or 13/—— I am not going to commit myself to a figure at this stage, with one year's experience of the subsidy. If we are to come to business we cannot discuss it in this way. The factory has been started for one years and we have got certain results. These results are encouraging, but as anyone who knows anything about agriculture realises, one year's experience of a crop is no good. Two years' experience of a crop teaches you a lot, and three years' experience teaches you a lot more. In order not to be argumentative, let me put it this way: We will know in two or three years a lot more about the crop than we know now. The question Deputies have to consider is whether, in a time of financial stringency, when everyone wants economy——

Mr. O'GORMAN

Except the Government.

Mr. HOGAN

I disagree with the Deputy. I hold that the Government are the only body in this country really serious about economy. In a time like this, leaving out the faults of the Government, when everyone wants to economise, when we are to examine every proposition with a microscope. when, as Deputy Redmond says, the country is in a serious financial position, we are to rush into unlimited beet factories.

Mr. HORGAN

No.

Mr. HOGAN

You cannot have a beet factory for Cork, Louth and Galway, that I happen to represent. We cannot do business in that way.

Mr. O'BRIEN

You could not compare Galway and Cork.

Mr. HOGAN

The Deputy would not, but I would. That is the trouble. You cannot have a factory for Cork alone or for Galway alone.

Mr. HORGAN

I did not say anything about Cork.

Mr. HOGAN

The Deputy did, and Deputy Johnson is interested in Cork also.

Mr. JOHNSON

I have been shaking hands with the Minister for Posts and Telegraphs.

Mr. WALSH

I do not think so. I did not promise to give employment to everyone.

AN CEANN COMHAIRLE

When the Minister for Agriculture desires to make a non-argumentative speech, he should surely be encouraged.

Mr. HOGAN

At a time when everyone wants economy, just for the sake of a little political capital, everyone rushes in and wants to know are we going to spend money immediately subsidising beet factories in every county. That is what it comes to. We must do things on a general principle. We cannot take out one county, no matter how deserving, and subsidise a factory there. We are told now we are to rush and subsidise a factory, and not wait a year to get experience that would be invaluable to us if we could have it. All that comes from people who complain of the high subsidy for the first factory. I do not consider any subsidy too high for the first factory.

Mr. JOHNSON

You do not?

Mr. HOGAN

Provided you are sure of getting exactly what you want. What you wanted for the first factory was the very last thing in technical competence. Any money spent in the way of buying technical competence would be money well spent. To extend the subsidy or anything like the subsidy you had to expend on the first factory to a number of factories, when the enterprise became a commercial proposition, would be the last thing in waste. Yet, you have the same people who complain of the subsidy on the first factory anxious that we should rush in and start further factories, and subsidise them, and that we are, with the insufficient data of the first year, to consider what we are to give some foreigner to start another factory here. Deputy O'Gorman said this was an extravagant subsidy. That is a question on which I would like to say one word. It has been repeated all over the country. Is it an extravagant subsidy? Consider the subsidy in England. People will say analogies lead nowhere in this, but I think they do, because even the sugar beet industry is competitive. Consider the industry in England. What is the average for 10 years, from 1922 to 1932 in England where they have fourteen years' experience, where there is no insecurity, in a country where money can be invested? It is 22/6 per cwt. What is our average? 23/-.

Mr. JOHNSON

What is the rate this year in England?

Mr. HOGAN

It is rather high in England this year—26/9. In Ireland the rate this year is 24/6.

Mr. O'GORMAN

Would the Minister tell us the present price of sugar duty free at Antwerp and London, and what the carriage would be to Dublin and Cork? Would the Minister also say if the price is kept up by restrictions on Cuban sugar?

Mr. HOGAN

That might be.

AN CEANN COMHAIRLE

We will give the Minister until to-morrow to answer.

Mr. HOGAN

I want to make the point that it is absolutely absurd to say that this subsidy is extravagant.

Mr. O'BRIEN

When replying to-morrow will the Minister say if the decision not to have a second factory in Cork was arrived at as a result of the Minister for Posts and Telegraphs becoming a member of the Executive Council?

AN CEANN COMHAIRLE

The Minister for Lands and Agriculture will resume the debate to-morrow.

Progress ordered to be reported.

The Dáil went out of Committee.

Progress reported, Committee to sit again to-morrow.

The Dáil adjourned at 8.30 p.m.