If that rise in prices becomes too great I think this prohibition should not last, in any case more than six or eight weeks. If the Tariff Commission were not able to complete their report before six or eight weeks it would be necessary for the Government to consider what other action they should take in regard to it. I believe this prohibition will not last in any circumstances more than six or eight weeks and that there is butter enough in hand, with the certain production which is taking place, to prevent any great rise or any great shortage. Instead of there being a surplus supply there will be only something like a reasonable supply for the market. In the circumstances that is going to lead to some sharpening of prices. How great the increase will be it is difficult to say. But if the increase became very great, and if there were some sort of combination to hold butter off the market, and to extract unreasonable prices from the consumers, then the people whom we are trying to help by bringing in this Resolution would have forfeited the right to such help, and I certainly would stand for letting the Resolution lapse. This is the Committee Stage. If the Resolution is not confirmed on Report to the Dáil by 12th December—assuming that the Dáil sits three days weekly, as usual—it lapses. However, if everyone concerned behaves reasonably we can confirm the Resolution, perhaps before the Christmas adjournment, and we might then have a report from the Tariff Commission. If we had no report from the Tariff Commission, and if prohibition continued, I think we would have to get the Dáil to meet even for a day very early in January to consider such a report, if available. If it were not going to be available, I think it would probably be necessary for the Dáil to meet to consider the matter.
It has been said that the Tariff Commission was influenced by Ministers, that it took the view that Ministers were in favour of a tariff on butter. I do not know what Deputy alleged that the Commission was influenced by that consideration. As a matter of fact it is not correct to say that Ministers are in favour of a tariff on butter. I do not know that any Minister has made up his mind in favour of a tariff on butter. The most the Minister for Agriculture said was that there might be some advantage in a tariff on butter, whereas in regard to other agricultural products there could be no advantage at all from a tariff. I do not pretend to have considered the matter as closely as the Minister for Agriculture, but my opinion is that if there can be any advantage to farmers from a tariff on butter it can only be an infinitesimal advantage—so small an advantage that probably it would scarcely be worth while taking any steps to obtain it. The effect of a tariff on butter, if it has any effect, will be simply to cause some increase in prices in the summer. There is a great surplus production of Irish butter in July and August. If there was a tariff on butter what would happen then would be that creameries and other producers would take some of it off the market and put it into cold stores. The price that would be obtainable for that cold stored butter in winter would be determined by the price obtainable for it in July and August. If the taking of a certain quantity of butter off the market in July and August caused the July and August prices to be rather higher than they would be if that butter was put on the market, there would be some small advantage. If on the other hand the taking of that butter off the market in July and August does not increase the July and August prices there will be no advantage whatever to the farmer. There will be risk in the whole business.
There has been great condemnation of the I.A.C. for their lack of foresight in holding up butter instead of selling it early in the year. The outside creameries did the same thing. What will happen under a tariff if it is imposed will be that creameries will hold much larger quantities—immeasurably larger quantities—than they held this year, or than they ever held in the past, in cold storage. Milk suppliers will have to be paid, and, of course, money will be borrowed to pay them, and bank interest will accrue. Certain expenses will have to be incurred for cold storage. There are factors in connection with the quality of butter which will come into account. If certain butter were cold-stored there might be a loss on it, because in the end its quality might not be very palatable. When this immeasurably greater quantity of cold stored butter is kept over, possibly we will have a falling market such as we have had, or, possibly, a greater fall. We might have creameries making great losses as a result of cold storage. Perhaps they would have to sell in winter at prices less than the July prices, having incurred all these interest charges in connection with cold storage. In the meantime, no matter what the Tariff Commission might do, there might be considerable numbers of people who could afford it who would insist on having fresh butter rather than cold-stored butter. Possibly you might have people, in certain cases, turning over to the use of a substitute for butter.
Generally the position is that no Minister is in favour of a tariff on butter. All we say is that there is a possibility that the July and August prices may be raised by a tariff and that some infinitesimal advantage might go to the farmer. Personally I am not convinced that any advantage at all will go to the farmer. We want the question examined, and we do not care in the least what conclusion the Tariff Commission comes to. We want to have it examined impartially and carefully, and after that examination on the balance, if there is a prospect of some advantage to the farmer, then we will take our usual steps and accept the recommendation of the Tariff Commission. If after careful examination it appears that there would be a likelihood of no advantage to the farmer and certain disadvantages to the rest of the community, or the possibility of some disadvantage to the farmer, then we will refuse a tariff on butter. Anybody who concludes that we have adopted the Fianna Fáil policy in proposing this Resolution is entirely wrong. What we simply want is, that when the Tariff Commission have made the recommendation, the farmer who is now hard hit should not be still harder hit by the mere operations of the Tariff Commission. This operation will secure that. On the other hand, we will take steps, if necessary, to see that the consumer is not mulcted.
Under the circumstances that will arise when prohibition is imposed, there will be only a reasonable supply, instead of an abnormally great supply, available for the market, and there will be some increase in price to the consumer. There is nothing to apologise for in that. I do not think that the price will rise to last year's level. Nothing should happen that would be serious to the consumer. But if there is going to be a small increase in price to the consumer, as has been stated before, there is no reason why that should be grudged to the farmer. Quite a number of manufacturers have got increases, and when you put on a tariff you must be prepared to face increases to the consumer.
There is absolutely no use in talking about regulating prices. The regulation of prices was carried on during the war for an entirely different object. Firstly, it was intended to secure a certain general distribution; and, secondly, to put up the prices as a means of getting revenue. There was really no attempt during the war, when there was regulation of prices, to keep prices down. The keeping of prices down was not a factor at all. The object was to secure distribution, to prevent local crises, and so forth. The regulation of prices has had to be considered by the Government time and again, because of applications of all sorts which have been put up to them. If you attempt to regulate prices, you will have to set up machinery that will be costly, troublesome, and vexatious in many ways. In addition, you generally have to take the least efficient man as your measure—the least efficient shopkeeper, the least efficient distribut or, the person who labours under most disadvantages. You have to cater for him, and if you fix a price at which, perhaps, a more efficient person would be prepared to sell more cheaply and get a reasonable profit by so doing, that person will be inclined to work to the price fixed. That has been found to take place everywhere the regulation of prices has been tried. You might temporarily, or on the occasion of some great crisis, do something in connection with price-fixing, but, generally, the way to fix prices in relation to tariffs is to give the minimum tariff that will operate as far as possible, let the manufacturer get all he can out of the tariff, and trust to the competition between the manufacturers and increasing efficiency amongst them to reduce gradually the price so far as it is possible to reduce it economically. As I said, we have no intention of trying to set up elaborate price-fixing machinery. We simply warn those who are going to benefit by our action that if they take advantage of this measure to do something that is entirely unreasonable, then they will have to suffer the consequences, and they will lose the advantage given them.
Deputy O'Hanlon referred to the difference in price between Danish and Irish butter. As I understand it, during the summer for the last three or four years the gap in price between Danish and Irish butter has shown a very definite tendency to close. The price of Irish butter in the summer over that period has been approaching more closely to the price of Danish butter. At present, in the winter, you have an entirely different situation. You have fresh Danish butter against cold-stored butter, against Australian, New Zealand and other butters. We are not really producing any fresh butter at the present time. Our price is regulated and must fall in with the price that is available for cold-stored butter. The position at present is something like the difference that prevails between the price available for fresh beef and the price available for chilled beef. There is no possibility that Irish butter in the winter is going to get the price that Danish butter can get. No one is going to pay the price for cold-stored butter that they will pay for fresh butter. Nothing would be gained, and perhaps something might be lost in the future, by a tariff which would encourage our creameries to hold too much butter in the winter. It is possible that if four or five thousand pounds worth of butter had to be put into cold storage by our creameries for the winter each year, that without complete regulation of the industry, without co-operation amongst themselves, a great deal too much butter would be put into cold storage and you would have that being shoved out, perhaps, next year when the only Irish butter on the market should be fresh butter. In that way definite harm would be done to the industry.
I regret very much that we have to do this, that we have to propose this Resolution. On the other hand, I think that the Tariff Commission took the right view. If there had been very little cold-stored butter here and if we had not had the position that it was already going at a price that was below production price, then I am sure that the members of the Tariff Commission would have taken the view that was taken by the former Tariff Commission in regard to all other applications. That is to say, they would let the hearing of the application proceed and issue their report in the normal way, and while some harm might be done by dumping, on the other hand people would be afraid to dump to a very large extent, because in the end there might be no tariff.
Uncertainty with regard to the findings of the Tariff Commission has prevented, in the case of other industries, anything in the nature of serious dumping. There has been of course an enormous amount of dumping, but there has not been anything like wholesale dumping, perhaps for the reason that people were not prepared to bring in large quantities of goods because of the fear of being caught as there might be no tariff after all. For all ordinary applications the attitude of the Tariff Commission was right. In the present case, although they had not any application before them I think they were justified in making the recommendation that they did, and I think the Government had really no option but to act on that recommendation. It is all very well to let some small injury happen to an industry or to a group of producers whose position is strong, but when you get them in a particularly unfortunate position then it would not be fair or reasonable to refuse to take the step necessary even though there could be arguments against refusing to take that step temporarily to avoid a crisis.
