Dáil Éireann debate -
Wednesday, 30 Apr 1930

Vol. 34 No. 9

Marketing of Butter. - Motion for Establishment of a Tribunal of Inquiry.

Minister for Agriculture (Mr. Hogan)

I move the motion on the Order Paper:—

"Go bhfuil sé oiriúnach Binse do bhunú chun fiosrú do dhéanamh i dtaobh ní áirithe go bhfuil deabha agus tácht phuiblí ag baint leis, sé sin le rá:—

(1) an tslí inar cuireadh ar an marga i rith na gcúig mblian dar chríoch 31adh Mí na Nodlag, 1929, im do rinneadh i Saorstát Eireann, agus go sonnrách an deifir a dheineann có-mhargaíocht don éileamh ar im agus do phraghas ime a deintear i gcomhar-uachtarlanna, agus

(2) an modh chun im do chur ar an marga feasta is mó do chabhródh chun méadú do dhéanamh ar an éileamh ar im a deintear i Saorstát Eireann agus ar an bpraghas is féidir d'fháil ar an im sin i gcompráid leis na praghsanna is féidir d'fháil ar shaghsanna eile ime, agus san gan an costas margaíochta do mhéadú ró-mhór.

That it is expedient that a tribunal be established for inquiring into a definite matter of urgent public importance, that is to say:—

(1) the marketing of butter produced in Saorstát Eireann during the five years ended 31st December, 1929, with special reference to the effect of combined marketing on the demand for and price of butter produced in co-operative creameries, and

(2) the method of marketing butter in future which would conduce more effectively to increase the demand for butter produced in Saorstát Eireann and the price obtainable for such butter relative to the prices obtainable for other butters, without adding unduly to the cost of marketing."

Up to the end of 1927 butter was marketed in this country by each creamery. In 1928 a marketing body was set up by the creameries and it has been in operation for two years. During that time there has been considerable canvassing amongst parties interested as to whether the operations of that body have been fruitful or not. I should say that roughly, 80 per cent. of the creameries are affiliated with that body and the I.A.C. is the biggest exporter of Irish creamery butter, but there is a big percentage of important creameries exporting besides that particular body. During the last two or three years there has been considerable discussion in the Press, and wherever farmers meet, as to what the effect of the operations of that body has been on the price of butter, and, generally, as to whether the operations of that body are what they might be. Recently, Farmers' Unions, and bodies like the Irish Dairy Shorthorn Breeders' Association, met and passed resolutions suggesting that the Minister for Agriculture should establish some tribunal which would inquire generally into the marketing of Irish creamery butter, and, in particular, the marketing of co-operative creamery butter, examine into such methods of marketing as have been in operation in the last four or five years, and make any representation which that body, after inquiry, would consider best for the purpose of more efficiently marketing Irish creamery butter. I see no reason why we should not yield to such a request. I think it is entirely an advantage that the Department of Agriculture should get that information as far as it is available. I think this is a particularly suitable time to set up such a body, for I am assured beforehand that the Irish Associated Creameries Marketing Board that is in operation will give us the benefit of their views and of the experience they have had in the last two or three years. I hope such an inquiry will elucidate the position, and come to conclusions which will be valuable from the point of view of satisfactorily marketing Irish butter. A similar resolution must be passed in the Seanad. The tribunal will have power to summon witnesses and to examine witnesses on oath.

Mr. Aiken

Could the Minister give us any idea as to the sort of tribunal he is going to set up? Will the members of it be civil servants, or what type will they be?

Mr. Hogan

I have already asked the following gentlemen to act, and I think most of them have consented to do so:—Mr. Dulanty, who is our chief trade representative in England; Mr. McAuliffe, of the Department of Agriculture; Senator Bennett, who is a rather well-known dairy farmer, as well as being Chairman of the Senate; Mr. Duggan, who is Chairman of one of the most important creameries in the south, and, I think, Mr. Colbert. It is difficult to get a suitable body that is capable of examining accounts very closely and that understands something about the production of butter on this side and marketing on the other side. I think the body I have mentioned is suitable. Mr. McAuliffe is the officer of the Department of Agriculture who has most to do with the marketing of the butter of the five or six creameries which the Department owns. It is proposed to add to that number some capable accountant who will be whole-time at the disposal of the body.

Mr. Davin

I strongly support the action of the Minister in bringing this motion before the House. Personally, I never had any sympathy with any creamery or number of creameries who believed it right to stand outside the Irish Associated Creamery Organisation. I was glad to hear the Minister say that in the inquiry that will be held that body is prepared to give every assistance possible in persuading those outside the creamery organisation that there is a good case for the organised marketing of butter in the British market. The time for this inquiry is certainly overdue.

Dr. Ryan

I believe there is a case for investigation into this matter of the I.A.C., but it appears to me that this suggestion is in keeping with the habit of the Minister for Agriculture, when it is a little bit too late, always to set up a tribunal. I think the Minister ought to be ashamed of himself, when the price of butter has reached its present stage, to ask us to consent to the setting up of this tribunal as a matter of urgent public importance and so on. Some six or eight months ago when the tillage farmers found that they had to give up tillage as a means of livelihood the Minister set up a tribunal to find out what could be done for the tillage farmer. That tribunal was to report in the middle of December last, but later the date of the report was postponed until early in January. The fact of the matter is that we have not heard anything since about what they are going to do. When the farmers found that they were unable to compete with the British farmers or the Northern Ireland farmers in the British market because of de-rating, a Commission was set up here to consider de-rating. That Commission is still in session and we do not know what is going to happen. When it was found that farmers were paying rates and annuities on land that was washed away by the sea a Commission was set up to deal with coast erosion. They are still deliberating and nothing has been done. Notwithstanding all the Commissions that are sitting, nothing has been done for our farmers. I do not know whether this proposed tribunal will be able to do anything effective. Possibly there is something legal in the form in which this proposal is drawn up, setting out that this tribunal is of urgent public importance.

Mr. Hogan

That must be set out.

Dr. Ryan

Then that is the reason why those words were put down. I notice in the second paragraph that the tribunal is to investigate the price obtainable for Saorstát butter relative to the prices obtainable for other butters, without adding unduly to the cost of marketing. The Minister has given us the names of men who will probably act on this tribunal. I think I know only one of them personally, but from what I know of the others I believe they are sensible men and I am sure they will do their duty to the best of their ability. What I would like to know is, are they going to listen to reliable evidence given by the I.A.C. or are they going to be treated to the sort of statement the Minister has made both here and outside—that the price of Saorstáat butter is catching up on the prices obtained by other countries or is as good?

Mr. Hogan

I will not give evidence.

Dr. Ryan

I am glad to hear that.

Mr. Hogan

I knew you would be.

Dr. Ryan

I was wondering whether the tribunal would be asked to listen to the Minister, but he has assured me now that he will not give evidence. I know, therefore, that the tribunal will have a better chance of getting on. It will investigate, I assume, the working of the I.A.C., for the last two and a half years, and will inquire whether it would be a good thing to discontinue the I.A.C. or let it continue operating as it is and induce or compel other creameries to join in. I expect all these matters will be investigated. Even the greatest opponents of the I.A.C. have not claimed that the loss on the part of creameries that did join the I.A.C. was more than 5/- per cwt. That would not amount to more than £100,000 per year, but, of course, that is a very considerable sum. It is nothing, however, to the loss we are going to suffer this year on account of the policy of the Executive in not allowing the unemployed throughout the country to get work, in not promoting our industries, thus providing work for the unemployed in the urban and rural areas. If the Executive had taken a definite step in that direction we would have a good home market for our butter and we would not be at the mercy of the British market as we are at present. Because we are at the mercy of the British market our producers of butter are going to suffer a loss of one and a half millions over and above what they suffered last year. It would be much more to the point if this tribunal were asked to investigate the policy of the Executive Council which has prevented our town workers particularly from getting employment. If these men had employment they would be better purchasers of the home-produced butter, and in that way our butter producers would not be left at the mercy of the British market. This tribunal may be useful from the point of view of investigating the I.A.C., and for that reason it is just as well that it should be set up.

Mr. Maguire

I would like to know if the Minister intends to confine the inquiry merely to the sale of butter, or will he extend its deliberations to such creameries as send their cream to places across the Border? Some two years ago, when we were discussing here the general scheme of creameries, the Minister more or less anticipated that a big general scheme would be applied all over the country, and he made special reference to the West of Ireland and the necessity for a scheme to deal with the situation there. It is rather strange, after the lapse of two years, that we should hear from him again in this fashion. He makes this proposal just after an announcement has been made that the price of butter this year will be very much lower than for a number of years past. In face of that announcement, and in view of the expectations of the Minister some years ago in regard to the development of this industry, this suggestion of a tribunal rather appears to me to be a scheme to cover up any panic that may likely arise amongst the creameries that have been encouraged to invest capital and that are at present carrying very heavy overhead charges. To my mind it is very doubtful if this inquiry will be of any benefit to the farmers. Like most tribunals set up to investigate different matters. I dare say we will, in this instance also, have a long delay, and the results will be negligible.

If this tribunal is to be of any service all the circumstances connected with creameries must be examined impartially. Those creameries which have abstained from becoming members of the amalgamated society must have had some substantial reasons for so abstaining. They are not philanthropists. They believed that they could market their butter better than by joining the society. The reason some of them have remained independent is because they got better prices, and the figures prove that to be the case. These people will naturally have some doubt in their minds in regard to this tribunal. They will look upon it as being rather prejudicial to them. It is only fair that the Minister should give a guarantee to these people that they will have proper representation on that tribunal, such representation as will set at rest any doubts they may have. I think that this matter should be dealt with in a more open way. The Minister should set up a judicial inquiry before which evidence will be heard, where both sides will have an opportunity of stating their case and where a proper decision will be arrived at.

Mr. Corry

This tribunal is being set up in response to a somewhat inspired demand by the associated creameries.

Mr. Hogan

No, it is not. Are you against it?

Mr. Corry

I am against it because I know the result of it beforehand. There is no occasion to set up a tribunal at all. The Minister wants the verdict of the tribunal in order to fortify himself in any action he will take to compel the free creameries to be dragged into the mesh, or rather the mess, caused by the selling of butter by the associated creameries for the last two years. That is at the bottom of the whole thing. A short time ago at the Dairy Farmers' Congress a demand was made —a very inspired demand—for the tribunal. One thing I am glad of is that the tribunal apparently is going to inquire into some manner by which we can increase the demand for our butter in our own markets. I hope, when doing that, the tribunal will consider the action of the Minister in not pressing for some tariff on foreign butter being brought in here. Last year £360,000 worth of it was dumped into our Irish market in competition with Irish butter produced here. I hope the tribunal will consider that matter. I would like to know from the Minister whether he is going to take any steps in a matter about which we have heard much—in connection with the prevention of ordinary farmers' butter as distinct from dairy butter being exported from this country.

Mr. Hogan (Minister):

There is nothing about that matter.

Mr. Corry

Then the Minister is dropping it and I am glad to hear that. Now the decision of this tribunal is a foregone conclusion. I wonder where the Minister is going to get an impartial tribunal? This controversy between the I.A.C. and the free creameries, between the associated creameries and the independent creameries, has been going on for the past twelve months. The matters in dispute have been keenly gone into on both sides. I do not think that there is in any Department any individual who has not taken sides in this butter controversy either for or against the associated creameries, for or against having an open market. For that reason, I would like to know where is the impartial tribunal going to be secured? On that tribunal, there must be some men who have some knowledge of creamery methods and some knowledge of the marketing of butter. As far as I know, practically every official, every creamery manager, and everybody connected with creameries in the country, have taken one side or the other in this matter. It is for that reason that I say that the decision of the tribunal is a foregone conclusion. Apparently, the Minister thinks it is necessary for him to fortify himself with the decision of this tribunal before introducing a Bill here compelling the free creameries to join the associated creameries. I am convinced that that is at the bottom of the whole thing. If the tribunal will do nothing else but inquire into the inactivity of the Minister for Agriculture in not taking some steps to prevent this dumping of foreign butter here against the butter produced by our own farmers, then it will have done some good. That is the only hope I can see from this tribunal.

Mr. Gorry

At a meeting of the Shorthorn Breeders' Association some months ago, a resolution was put forward asking for this inquiry. I then supported the demand or the request that this tribunal should be set up. There has been a very vexed controversy between two sections of the community on this matter—that is, the section supporting the I.A.C. and the section supporting the free creameries with regard to the marketing of their butter. I would like that the findings of this tribunal would be such as would inspire confidence in those who, up to the present, have remained outside the working of the I.A.C., and would induce them to join hands with those who are associated in the I.A.C. in improving marketing methods. From my association with creameries, I am convinced of the value to the industry of improved methods of marketing. I am convinced that combination amongst the butter producers will result in the ultimate success of this industry. I am convinced that the ultimate success of the industry depends more and more on active co-operation between the various creameries in the country. In my judgment, it is not the right policy for creameries, any more than it is for individuals, to go on ploughing a lonely furrow. It is not right for them to go on in a selfish way doing things each in its own separate way when by joining with their fellows they can do things in a much better way. A great many improvements can be effected in the marketing of our Irish butter and by marketing it through the I.A.C. At the same time, I must say that I am in disagreement with certain parts of that work. I know that very big improvements can be effected. It is not by remaining away from the fight and by not adopting something of a constructive programme that the Irish creameries can benefit. It is by trying to help in finding a right solution that we will achieve the objects at heart. I believe that the attitude of all Deputies in this House, in view of the serious situation that confronts the creamery industry at present, will be as helpful as possible in this matter.

I hope the members of this tribunal will come to their task earnestly, sympathetically and with open minds. I would be sorry that any of those on that tribunal should come into it with prejudiced views. I hope, if any member of the tribunal has prejudiced views and attempts to force those prejudiced views on the tribunal, that the country will take him seriously to task for it. What we want is to have this question examined fairly and impartially and in such a way that all persons who have grievances on either side will have a fair and open opportunity of having those grievances examined. I hope the tribunal will be able to present a proper solution to this House. I am generally in agreement with the principle of co-operative sale. I think we have a lot to gain by proper development in the marketing of our butter. It is perhaps a slight divergence, but I would like to say that if the I.A.C. were properly developed it would eventually gain the confidence of the creameries of the whole country and, perhaps, at a later stage it could do useful work in helping to improve the sale of our bacon as well as of our butter. Why I say that is that skim milk as a by-product is used extensively in the feeding of pigs. And if at a later stage we had some such agency as the I.A.C. properly worked and with proper salesmanship, it would be a splendid adjunct to the farmers of the country in the sale of their bacon. It would help them to get a better price for their bacon and it would probably open up better markets. That would help all sections.

As regards the personnel of the tribunal, I think it is a pity that the Minister has not given representation to the I.A.O.S. The I.A.O.S. is charged with the duty of organising the creameries and supervising the work of creameries. I believe that if the I.A.O.S. had access to the methods of the I.A.C. it would be all to the good. Generally speaking, committees of farmers who are running creameries will not have the same chances and the same opportunities of investigating matters as the I.A.O.S. I think if some representation were given to that body on this Tribunal it would be a good thing. I would like if the Minister would consider that point. One of the best ways of helping the creamery industry here—and that should be borne in mind by the people who are about to act on that tribunal—is by excluding foreign butter from this country. I believe if the Irish creameries had the market at their doors they could successfully make use of it. It would help to steady prices during the winter period. We must do something to encourage the tillage farmers who have the means of feeding their cows in the winter to take up to a greater extent winter dairying and the production of winter butter. Farmers in the tillage areas should be encouraged in this direction and in co-operation with the farmers in the central parts of Ireland who produce summer butter should have reserved to them the benefits of the market. Butter from New Zealand and other countries that take very little produce from us should not be allowed to be dumped here at the expense of the farmers who are producing butter in our midst. At present, that butter floods our markets at the very time when the farmer is expecting for his butter a price that will enable him to produce it. The importation of New Zealand and foreign butter is having a very serious effect on the Irish creamery and dairy industry.

I believe that we should have the home market for ourselves. I saw in an American dairy journal the other day that the United States has a tax on imported cream of 30 cents a gallon. The United States is a big country, and when the people there think it wise to have a tax against the importation of Canadian and other cream I think it is worthy of our consideration to bring about protection for our little market. The chief offender, from our point of view, is New Zealand, a country which is thousands of miles away and which takes very little from us. I do not think that we would upset the British or any other market by saying that we want the Irish market for the native product.

Mr. Derrig

I think it is a pity that the Minister has not specifically referred to the question of the administration of the present Marketing Board. As Deputy Dr. Ryan said, perhaps it is a question of legal phraseology. The question, however, is, are the tribunal going to examine the question of the principles of combined marketing, of which we are all in favour, or are they going to examine particularly the present system? I think that that is what the country needs most and what it is most anxious to have, namely, a thorough examination of the present administration. Like Deputy Dr. Ryan, I have no doubt that those who are on the tribunal will carry out their work to the best of their ability, but I think that the Minister should take the opportunity of putting other interests on the tribunal besides those which have been connected with the question of combined marketing up to the present, and he should try to get independent interests represented on it. There is no reason why you cannot get in the Free State, or, if necessary, across the water, a business man who has special knowledge of the marketing of butter, apart from what has taken place during the last few years, and who will be able to look at the question from a detached point of view to see where expenses can be cut down and economies effected.

Another matter which the tribunal should include in their inquiry is the question of the importation of foreign cream. Australian butter comes here in large quantities. There is a high tariff on butter going into Australia. Is there any advantage in having Australian butter very often sold as Irish creamery butter in the home market while foreign butter is excluded in Australia? Surely the obvious way to improve the situation in the marketing of butter is by cutting out the importation of the foreign article. I hope that the Minister will be able to assure us that the administration of the marketing board, the method which it has adopted, and the economies which might be carried out will be examined. In connection with the marketing of butter, I take it that the terms of reference cover marketing in the Free State as well as outside, and that the question of putting a tariff on foreign butter will not be excluded from the scope of the inquiry.

Mr. Goulding

The Minister, I think, stated that it was not intended to deal with the question of farmers' butter.

Mr. Hogan

It does not arise on this resolution.

Mr. Goulding

The terms of reference leave the question open. Reference has been made to the importation of foreign butter. It has been the practice in the past for butter merchants in this country to import foreign butter mix it with Irish, and export it to England as Irish, but they have been careful not to mark it as Irish produced butter. It is sold largely in England. In my opinion no creamery butter can ever equal farmers' butter. It may be a personal predilection, but I think, and many people hold the same view, that really well-made farmers' butter will beat creamery butter every time. Every effort should be made to protect it, so that people who turn out a good product in their own homes will get as good a chance of disposing of it as the Associated Creameries.

Mr. Hogan

I agree that really well-made farmers' butter is better than creamery, but you can only get it from a few farmers. You cannot have uniformity as regards farmers' butter, so that there is no hope for it in modern times. The inquiry will be into the question as to how creamery butter was marketed in the past, and as to how it should be marketed in the future. That is the intention, though the resolution is a bit wider. That is the job which the tribunal will have to undertake, and it is a big task. Such a tribunal could not go into the question as to whether foreign butter should be prohibited. That question may be one that should be examined, but this tribunal could not do it, and you cannot ask it to do any more than the task it has been set. Leaving out the references to the prohibition of foreign butter, which are irrelevant, as that question cannot be considered by such a tribunal, I may state that Deputy Gorry's point of view is on the whole my own.

I want to remove a few misconceptions. I was not responsible for the establishment of the I.A.C. Neither myself nor the Department has, or should have, anything to do with the marketing of butter as such. That should be done by the producer. We want to interfere as little as possible in such matters. The I.A.C. was set up by the co-operative creameries. It was a business experiment and, as always happens in the case of experiments, you must improve your machinery in the light of experience. I made no mention of the I.A.C., and I want to dispel the impression that the I.A.C. is in the dock. I ignore Deputy Corry's remarks, because he is, I think, in a minority of one. I do not want to prejudice or influence the operations of the I.A.C. in any way. I do not know whether their operations have been efficient or inefficient. I have no special knowledge, and I do not want to prejudice the question. The position is not, as some Deputies seem to think, that there are two sides to a very big question, and that we are intervening between them. I want to have an inquiry by impartial men who will examine the question as to how butter has been marketed not only by the I.A.C. but by every other marketing organisation and individual creamery in the last four or five years, and who will make recommendations in the matter based on the information they obtain as to how butter should be marketed in the future.

I do not want to give the impression that this tribunal is being set up for the purpose of settling a quarrel between the inside creameries and those outside. I hope it will, but I want to get certain facts through an impartial tribunal and to let the facts speak for themselves. Let them be placed before the body which is more important than either of the parties, namely, the farmers who supply the milk. If there is anything in the result, and if they make any contribution to the question which is really valuable, I believe that the farmers as a whole on both sides, both those outside combined marketing and those inside it, will be impressed by them, and possibly they may be the means of settling some of the difficulties between the two systems. I do not know whether I should delay in dealing with Deputy Dr. Ryan's point, namely, that I should not set up this tribunal because the price of butter is low. The price of butter, whether high or low, has nothing to do with the inquiry. If it was higher than it had been for the last fifty years that is no reason why Irish farmers should not get the full market price, and if it is low, equally, he should get the full market price. The reason that we are setting up the tribunal is that we are not satisfied that the farmers are getting the full market price, whatever that may be. I want to tell Deputy Dr. Ryan also that I have nothing to do with the price of butter. If I consumed more butter than I am consuming it would not put up the price a penny in the pound. With the exception of Deputy Corry, I think that everyone is in favour of this resolution.

Mr. Derrig

Are we to understand that the only method of reviewing the actual working of the central Marketing Board is by this tribunal and that the Minister himself has no power to take any action if he considers that the management might be improved? If he has not these powers, I think he should give them to himself.

Mr. Hogan

I have no more power to interfere with the sale of butter by the I.A.C. than I have to interfere with the individual farmer who sells his milk, and I do not think I should have.

Mr. Derrig

The Board are responsible to the annual meeting and that is all?

Mr. Hogan

To the creameries. They are elected by the creameries.

Mr. Goulding

Are any time limits to be set to the inquiry?

Mr. Hogan

No.

Motion put and agreed to.