I move: "That the Bill be now read a Second Time." The Bill has been printed for some considerable time, and Deputies have had a fairly long interval to read it. It is a complicated Bill, and I propose to explain the important sections. I want to say first that this is not a Co-operative Bill as Deputies probably recognise. I have been asked why the Co-operative Bill has not been introduced. That Bill will be a very complicated Bill. You cannot draft a Bill until the interests concerned make up their minds as to what they want. The Co-operative Bill will be a very big Bill. It will be a Bill that will regulate the position of co-operative societies, whether they be creameries, co-operative egg societies, co-operative bacon factories, co-operative stores, or any other form of co-operation. The interests concerned, namely, the I.A.O.S., the co-operative societies, and the Department, have been considering for a very long time what exactly they want. Up to the present, while they have made considerable advance in regard to the sort of regulations which they require in order to organise and establish and maintain co-operation in the future, there are a great many very important problems unsolved. I cannot introduce the Co-operative Bill until the interests concerned have made up their minds in all details as to what they want. Then the drafting is for me. Of course, it is for me also to say, before the Bill comes to the Dáil, that I agree or disagree with the provisions. Finally, I suppose it is for the Dáil to say that they agree with it or disagree. While people speak of the necessity for a Co-operative Bill, or legislation to supplement the Friendly Societies Act, it is only when you come to sit down to consider what exactly you want that the difficulties begin to arise. There are very obvious things needed which could be very easily inserted in a Bill, but it is considered that when we are introducing such a Bill we ought, as far as possible, make it a complete Bill, and produce a Bill which will deal with any possible development of co-operation in the future. This is not, therefore, a Co-operative Bill, and these are the reasons why that Bill has not been introduced already.
This is a Bill to deal purely and simply with the societies which are concerned, directly or indirectly, in the transfer of the properties of the Condensed Milk Company of Ireland and the Newmarket Dairy Company, purchased in the year 1927. That is to say, that it concerns nearly half the societies of the country. For that reason it is a very important Bill. It is a Bill mainly to legalise and validate the transactions which have occurred. The first section is a definition section. The second section is an important section. There are really three parts in the Bill. In the first place, it deals with the following sort of case: A co-operative society, "A," purchases the milk supplies of a creamery, "B," which formerly belonged to the Condensed Milk Company or the Newmarket Dairy Company. By far the greatest amount of these milk supplies goes to the co-operative societies that purchase them. But perhaps a certain amount of the suppliers to the creameries of the Condensed Milk Company, which have been closed, instead of sending their milk to the co-operative creamery which purchased it, send it to another creamery in the neighbourhood, which has not purchased it. There are some such cases. That is because there are some districts where creameries are very close together and where, notwithstanding that we have closed something like forty or fifty, there is still redundancy as between co-operative creameries. You have some such cases. You have cases where creameries that bought milk supplies have not got the whole of them. The second section deals with such a situation. It tries to make arrangements for the payment for these milk supplies by the societies, which, in fact, have got them. That is one case. Sections 2, 3, 4 and 5 deal with such a case—the case of a society which has not bought milk supplies, but which, in fact, has got some milk supplies that another society has bought.
Section 6 deals with a different case. It deals with the case of a creamery being purchased belonging to the Condensed Milk Company. All these creameries that I speak of belong to the Condensed Milk Company or the Newmarket Dairy Company. It deals with a creamery belonging to the Condensed Milk Company being sold as a going concern to a co-operative creamery in the district. That is the second class of case dealt with. Arrangements are made for the payment by the creameries of the full amount of the purchase money, both for the milk supplies and for the buildings, because the creamery is sold as a going concern, with plant, equipment and milk supplies, to a co-operative society in the area. Arrangements are made in Section 6 and following sections, first of all, for the payment by the purchasing creamery of the full amount of the purchase money to the Dairy Disposals Board. Alternatively arrangements are made under which the purchasing creamery shall recover that payment from the suppliers of the creamery which they purchase and which formerly belonged to the Condensed Milk Company.
Section 7 deals with a third case: that is the case where a co-operative society buys, not a creamery with plant and equipment, but merely the milk supplies; in other words, buys a redundant creamery, a creamery that has been closed. In that case, the co-operative creamery merely buys the milk supplies. Section 7 makes arrangements under which the purchasing co-operative creamery pays for the milk supplies at a certain rate which is stipulated, and which I will explain later, and makes arrangements under which the purchasing creamery can recover the price of these milk supplies from the milk suppliers. So that the Bill deals with three cases, the only three cases that arise in connection with the purchase, transfer or sale of the property of the Condensed Milk Company. I will not give them in the order which they are in the Bill: First of all it makes arrangements whereby a co-operative creamery may buy a creamery which formerly belonged to the Condensed Milk Company; may buy not only the creamery itself, with the buildings, equipment and milk supplies, but the whole thing as a going concern. That is in Section 6. Secondly it makes arrangements under Section 7 by which a co-operative creamery may buy the milk supplies of a redundant creamery that has been closed. Finally, in the beginning of the Bill, there are arrangements made to deal with the case where suppliers to a creamery, which formerly belonged to the Condensed Milk Company, and which has been purchased by a co-operative society in the neighbourhood, go to a third creamery, that has not paid for and negotiated for these milk supplies. All this, of course, is dealing with the purchase and sale of redundant creameries and milk supplies.
When I speak of the purchase of creameries, I mean the creameries as going concerns with their equipment, plant and milk supplies. So far as the purchase of creameries by a neighbouring co-operative society is concerned, all that has already been covered by agreement. That is the agreement set out in the first schedule which is a common form of agreement. That agreement is validated by this Bill. The same thing applies to the cases where the co-operative society buys merely the milk supplies of a creamery which has been closed. That is the agreement set out in the Second Schedule and which is validated by the Bill. Then you have the third case, which is not covered by any agreement, for the simple reason that it deals with milk supplies, which have gone to creameries other than the creameries which bought them. Provision is made for that. In the light of these observations, I will read Section 2:—
(1) Where a creamery or a company owning a creamery was (whether before or after the passing of this Act) acquired with moneys provided by the Oireachtas, every person engaged in the manufacture of milk products or in the sale of milk who obtains (whether before or after the passing of this Act) a supply of milk (in this Act referred to as a new milk supply) from a person who supplied milk to such creamery during the whole or any part of the period which commenced on the 1st day of January 1927 and ended on the 30th day of June 1927 shall, unless he obtained such new milk supply under an Agreement with the Company in the form set out in the First Schedule to this Act or the form set out in the Second Schedule to this Act, be liable to pay in accordance with this Act to the Company a principal sum calculated in the manner hereinafter specified with interest at the rate and from the date hereinafter mentioned.
The amount is set out later on. If Deputies will now turn to Section 2 (d):
The said principal sum payable by such person to the company shall be calculated by the Department at the rate of one pound for every complete gallon of milk in the peak day quantity.
Of course Deputies know what the meaning of that is. That is the date at which there is the largest supply of milk—some time in June or July. That section means that a creamery that has obtained milk supplies which formerly went to a creamery of the Condensed Milk Company, and obtained them without agreement, shall pay for the milk supplies at the rate of one pound per gallon. That is the standard amount which has been accepted generally by farmers, with practically no exceptions. There has practically been no difference of opinion about that. It has been accepted generally that one pound per gallon is a fair price to pay for milk supplies. That provides that where a creamery, without agreement, has got such milk supplies, they shall pay one pound per gallon for them. That, of course, is obviously fair.
It is obviously most unfair, where a creamery has agreed to buy certain milk supplies, that certain suppliers should first of all prevent them from getting these supplies, and then be able to transfer their allegiance, free, gratis and for nothing, to another creamery and let it get all the advantage of the increased milk supplies without paying for them. Section 3 deals with the interest on money advanced, namely, 5½ per cent. Section 4 is important. It sets out that the creamery that has got the milk supply shall be liable to pay to the company, namely, the Dairy Disposal Company, the principal sum, namely, £1 a gallon and the interest, "stated in such certificate in the manner following, that is to say, to pay the said principal sum by eight equal annual instalments, of which the first instalment shall be payable on the 1st day of November next after the issue of such certificate." It provides the method of payment. It provides, in other words, after the shares are issued to the suppliers for the purpose of covering this £1 per gallon each year, that a creamery which has issued these shares shall pay half-a-crown on each share. They shall pay off eight half-crowns in eight years, and the creamery itself shall be liable for the interest. Section 5 is important. Up to the present we have been dealing with the liability of central creameries. They are liable to pay to the Dairy Disposal Board £1 a gallon for milk, and pay it in eight yearly instalments, with interest at 5½ per cent. Section 5 deals with the arrangement under which the said society which has this liability to the Dairy Disposal Board may get money from the suppliers supplying the milk. Sub-section (1) says:
"When the Department has issued under this Act to the company a certificate of liability in respect of a society, it shall be lawful for such society to issue and such society if and when so required by the Department shall issue to the supplier of milk on account of whose milk supply such certificate of liability was issued such number of shares (in this section referred to as debt shares) of the nominal value of one pound each in such society as shall amount to three shares for every cow then owned by such supplier as certified by the Department."
That looks rather complicated to people who are not used to these transactions, but it is simple to dairy farmers. If it is found that if you issue three shares per cow you get in, approximately, £1 a gallon. The arrangement under which the transaction is carried out is that the creamery which buys pays £1 a gallon for the milk. Remember we are dealing with creameries which get merely milk supplies. The arrangement that is being carried out is that the creamery that gets supplies pays £1 a gallon and, if it issues shares to the extent of three shares per cow at £1, it can cover that liability, and that is provided for in Section 5. On Second Reading I need not go into the other sections as that is the principle of them. I am leaving out Section 6 for the moment to deal with Section 7, because that section falls more naturally with the others with which we have been dealing. It deals with the payment for milk supplies received by creameries which have not signed any agreement. Section 8 validates an agreement made by the creameries with the milk suppliers. The agreement in the Second Schedule sets out exactly the provisions contained in the Bill in connection with milk supplies which have been obtained but not signed for by other creameries. It sets out that they shall pay £1 a gallon and that they, in order to find that, shall issue three shares per cow to their suppliers. Those two sections are in line. Section 6 deals with cases where a co-operative society buys not only the milk supplies but the creamery as a going concern, in other words, buys the supplies, the creamery, and the equipment in the creamery. In that case the agreement is slightly different. It provides that the society shall pay by eight annual instalments the amount agreed on, whatever that amount may be, and that the society shall find the money by issuing share capital to the extent of not less than three shares per cow. Deputies will see the distinction.
We now come to deal with the case of a Society that is buying a creamery as a going concern—its milk supply, its buildings and its equipment. In that case they agree to pay a certain sum for it. They agree to pay that sum in a certain way to the Dairy Disposals Board and they agree to issue shares at a rate of not less than three shares per cow to cover that. Section 11 extends the limit of shares which may be held by any one person under the Friendly Societies Act. Section 13 deals with the prohibition of unlicensed establishments. We bought 113 creameries from the Condensed Milk Company and we are also endeavouring to buy out the fifteen or sixteen remaining proprietary creameries in the country. Our policy is to hand over to the farmers of the country the manufacture of butter and the manufacture generally of all kinds of dairy produce. It is quite obvious that once we have adopted that policy we ought to carry it out and to make arrangements under which there shall not be redundancy in future. The taxpayers of the country have been called upon to pay in respect of the creameries £60,000, to close certain redundant creameries and to put the dairy industry on a proper footing. The losses that must have accrued over a long period owing to unnecessary competition between co-operative creameries and proprietary creameries existing side by side, must have been enormous, and we are making an attempt to nationalise the industry once and for all, to establish creameries as economic units and save them from competition until they are able to compete with the Danish and New Zealand creameries. Once we have done that and handed them over, we must make provision to prevent a number of redundant creameries being established again.
There will always be a real danger of redundant creameries. The one economic question that used to arouse real excitement in the country was the site of the creamery. It was the one economic question that aroused passions which were somewhat akin to the passions aroused by political issues. There might be jealousy amongst members of the Society, and after a time a split in the Committee. You then got back to the old situation where there were two fairly rich men or strong men in each camp. They may start to establish a new creamery and then you will have redundancy all over again. This section aims at the prevention of that. Moreover, there are some foreign concerns which are very much concerned with the competition which they have to meet from the creameries we have purchased. They would be delighted to come in and start factories here, for the production of milk products. They have very big amounts of money behind them, and they would be very glad to come in here in the hope of wiping out the co-operative system and taking over part of the industry from the farmers again. We are determined to stop that. They are nibbling at it at the moment, but under Section 13 no factory dealing with milk products can be set up without the consent of the Department.
