This is the first opportunity that this Party has had of discussing this very important estimate. A new industry has been created in this country with the intention of giving farmers a guaranteed price for a certain crop, and on this side of the House we are particularly interested to know whether the farmers are having quite as good a bargain as is popularly imagined. The Minister has just stated that the conditions last year were not quite so favourable as during the preceding year. As a matter of fact, I think the House is pretty well acquainted with the fact that the yield the preceding year was quite exceptional, and it was not taken as a criterion of the conditions which would ultimately develop.
This year, according to the Minister's statement, the sugar content has considerably decreased, and although the acreage under beet has increased, not alone in Carlow, but in various other counties, that is not an indication that the beet-growing proposition is as profitable to the farmer as we think. In the first place, there is exceptional depression in the farming industry; in the second place, there is a guaranteed price, and we all know that in a period of declining prices and great depression the farmer is only too anxious to seize any straw and to grow any crop which would give him a guaranteed price, even though, if his accounts were actually made up, it would be found that his margin of profit was very slender.
As I understand the conditions governing the sugar beet factory, they state that the farmer is to be paid 54/- for every ton of washed beets, and that includes delivery at the factory—from that 54/- the farmer has to deduct the cost of transport. When this question was being discussed here before, it was stated that favourable arrangements had been made with the railways company for cheap transport. I am not quite sure that that has been the case, and I would like to have some statement from the opposite benches as to what is being done to meet the farmers and the farmers' representatives with regard to transport and in other matters.
Besides the cost of transport, there is also the question of the determination of the sugar content, and I am told by the growers in Carlow that a great many subtractions are made which they cannot understand in determining the tares. I would like to know whether the promise which was made originally when this matter was discussed here, that the farmers would have an opportunity of having a representative there who would see that they got fair weight and that the sugar content was calculated in a fair manner for them, has been carried out. Furthermore, I would like to know how the scheme which was stated to have been put on foot by the factory for the supply of cheap fertilizers is working. One of the chief causes, apparently, of the high cost of production is the cost of fertilizers, and if the scheme is to go ahead on economic lines these matters, in which the farmers are particularly interested, will have to be tackled.
I submit that the Government has a duty to the growers as well as to the factory. The farmer is assured of 54/- per ton for his beet. The factory, as I understand it, is guaranteed 69/-, and unless I am contradicted I must take it that that means that the factory is getting its beet free and in addition is getting 15/- a ton towards the cost of manufacture. As well as having this favourable condition, the factory has also the advantage of having a contract which has been signed for ten years, and there is no guarantee, as far as I know, for the farmer. It is a great cause of complaint with the farmers in my constituency that, after the first three years' term has expired, they will not know what to do. It has been stated that the subsidy here is less than in England. It is also the case that the higher the sugar content is, the lower, I might say, is the proportion which the farmer gets; when it goes beyond 15.5 he gets a lower price for the extra content, and while the factory is guaranteed the subsidy for ten years, after a period of three years the farmers will be thrown on their own resources. The Government cannot refuse to accept responsibility for what will happen to the farmers at the end of the three years.
When they started this factory they had before them the example of the beet sugar industry in England and in other countries. They knew that the question of providing a huge annual subsidy from the taxes was bound to be an insurmountable problem in due course. They accepted the proposal of the foreign syndicate on experimental grounds. Now they have had a certain amount of time in which to develop the experiment, and the farmers, who are somewhat disturbed by fears and anxieties, would like to have a guarantee that their interests, as well as the interests of the factory, will be looked after.
Although the Minister for Agriculture as well as the Minister for Finance laid special emphasis on the fact that this was only experimental, and although he knew that the financial basis of the thing would become a matter of great difficulty after some time, the Minister said in 1926: The growth of the beet crop at the rate of ten tons "was a small fortune," that "£26 a statute acre was a very fine profit" and "if the farmers were asked to take a lot less, as they would be later on when the business became commercialised, I will not have much sympathy with them." In other words, when the time would come that the question of the abolition or the reduction of the subsidy would have to be very seriously considered, the Minister for Agriculture and his colleagues, who did so much to encourage the growth of this crop all over the country, are prepared to let the farmers down and to put them in the position of making the best terms they can with the syndicate.
A discussion that took place in the British House of Commons a few weeks ago, in which this whole matter was mooted and the representative of the producers, a Mr. Alexander, pointed out that while during the subsidy period the growers were assured of 46/- when the subsidy ended, and when they were in the position that the producers will be in this country at the end of three years, when they will have no contract to fall back on, 16/- was all they could get where they were formerly getting 46/- or 48/—in other words, a reduction of two-thirds. It is very easy for the Minister for Agriculture to come here and lay down the economics of a 200-acre farm, especially when he is able to eke out his remuneration from the farm with a salary, a pension, and emoluments of various kinds. But when the Minister for Agriculture is reduced to the position of the farmers of Carlow, who are trying to grow a few acres of beet, and who do not know what is going to happen to them when the three years' contract has expired, perhaps he would have a little more feeling, and perhaps he would then try to put into operation that economical adage which I read in one of his speeches, that when you have producers you ought to try to keep these producers in until you get more producers. Well, our opinion of the Minister for Agriculture is that whenever a producer is in a decent way to keep himself on a footing and to make himself solvent, he and his colleagues take every possible opportunity they get to drive him out of business and out of the country as well.
The alternative which I suggest the House might consider is, in this matter, as in other matters connected with agriculture, the transfer of the factory in some measure to the control of the farmer. As a matter of fact, when this proposal was first brought forward there was a suggestion that the Government should accept responsibility for half the share capital, and that the factory should not be run on the present basis, but on the basis of a sliding scale arrangement by which, while the subsidy might not be as large as it was in the beginning, it would be run on a sliding scale and be dependent on the duty on sugar. It seems to me that that arrangement might become permanent and there might be a real basis to-day which would enable it to live, and furthermore, if the Government were represented on the directorate of the factory they would have a considerable say in the policy and in the development of the factory, and, what is more important, the development of subsidiary industries around about it. We have heard a great deal of criticism about the economics of the raw sugar-beet factory, and it has been argued that in order to keep the industry going properly, and make it last we ought to have a refinery and make any further sugar-beet factories subsidiary to it. If a refinery were started it would open up the way to jam factories and to the development of the fruit-growing industry in this country.
The Government ruled itself out of all that because at the time that this alternative proposal was before them the Minister for Finance decided that the £150,000 which was demanded would be an ultimate loss, and that the Government could not undertake the responsibility. Even under the management of the Department of Finance, I think the Minister would have had a very good chance of getting his £150,000 back, because the factory has earned, for the period for which its accounts have been published, a profit of £114,000, after paying all expenses for the raw beet, for other raw materials of manufacture, salaries and wages, and so on. There is a gross profit of £114,000. That works out at a gross profit per ton of sugar of £9 11s. 9d. If we work that down further, assuming that 12,000 tons of sugar were produced, the net profit would be about 4/7 per cwt. That is the profit the factory is making, but no part of that profit is going to the Government, although the Government is subsidising the industry to this extent.
The items in the balance sheet and the accounts are worthy of examination. Generally, when the directors of an enterprise publish their accounts for the first year we expect that they would be rather conservative, and put a sum of money aside for reserves, and to meet future contingencies. They will not pay very big profits. In any case, they will hardly have very big profits to pay, because they will have heavy preliminary expenses and so on. But the sugar beet factory for the period from its incorporation to the 30th June, 1927, as well as having a gross profit of £114,000, has been able to pay off £40,000 for depreciation of plant and machinery. The plant and machinery cost originally £382,000, so that, roughly, one-tenth has been written off. It seems to me that that is a very large amount for the first year, particularly when we take into consideration that the factory is only working for 100 days. That £40,000 represents depreciation in machinery and plant of £400 per day. That, of course, reduces the amount of the net profit. In addition to that it has been able to pay off all the preliminary expenses, amounting to nearly £10,000. In most enterprises that would take a period of several years. Most remarkable of all, the wages sheet, according to the "Irish Trade Journal," came to £100,000, a figure that I think is grossly exaggerated, because the employment in the factory represents about 500 men for 100 days. That is about £1,000 weekly for 14 weeks, or £14,000. Of course, there is a maintenance party kept for the rest of the year, but there are only a very small number of men employed in that way. That £15,000, or perhaps £20,000, is a very small figure in comparison with the handsome remuneration that the directors have paid themselves. I notice that in concerns which the Government is responsible for bringing into existence we have twice as many directors as in private enterprises. While five or six men can run the Munster and Leinster Bank or the Provincial Bank, we have to have twelve directors to run the sugar beet factory.
I do not know whether they are engaged for the whole year round, but, in any case, they are paid £4,252 for the period; in other words, £236 5s. for each director per year. I want to call attention to these figures. I have no doubt that the Minister for Finance will point out that he has no responsibility for them, but his Government were responsible for setting up the factory in the first instance. They are faced with a very serious responsibility towards the people whom they instructed to grow beet all over the country, and in a short time, now that President Cosgrave has seen fit to be take himself to a healthier atmosphere, probably the question will loom in the air. I want to have a definite statement from the Minister in regard to the development of the factory and the subsidiary industries connected with it, and to the question of giving the farmers some representation and control in the management of the affairs of the factory which concerns them. Finally, I want to know whether the Minister is satisfied that the farmers are getting a fair deal in this matter, and whether he regards the accounts and profits of the syndicate as reasonable.
