I move that the Dáil agree with the Committee in its Report.
Tariff on Butter. - Financial Resolution—Report.
This is the financial resolution for putting a tariff on butter. I do not want this resolution to go through without making our position clear on the matter. It will he remembered when the first resolution putting a prohibitive tariff on butter was moved in the House no objection was taken from these benches, because it was explained at that time that there was no reason why the price of butter should be raised. On the second occasion when this resolution which is now being reported to the House was moved, it will be remembered that our support, or rather our failure to object, was indicated because we had not at that time sufficient particulars before us as to the effect of this particular tariff. Since then, however, we have had a full opportunity to consider the effect of the tariff on the consumer, and its advantages, so far as we can discover, to the agricultural community. As a result we have come to the conclusion that the circumstances are not such as would warrant our support of this particular tariff, and, therefore, we propose to vote against it. I do not wish to go into this matter at any great length, but it seems to be clear from any indications we have that those who are supposed to benefit particularly by this tariff are not in any way enthusiastic about it. There is no shadow of doubt, however, that this tariff has placed a very great burden indeed on the consuming public. Let us not forget, in this respect, that many farmers themselves have to purchase butter and pay a higher price for it because of this particular tariff.
At the time that this motion was moved I pointed out, and it was admitted by the Minister for Agriculture that a sum of £40,000 to £45,000 would be paid directly into the revenue as a result. That was the effect of this particular proposal, and there was no indication whatsoever that this money would go specially to the relief of the farmers. We have had the report of the Tariff Commission before us, and everybody has had an opportunity of examining that report since this resolution was first moved. I think there is nobody who will say that any tariff has ever come before us for which a weaker case was made on the merits than was made for this particular tariff on butter. On the main issue on which the tariff was claimed the case broke down. The reason on which the Tariff Commission decided that a tariff was to be given was that it would lead to an encouragement of winter dairying, but they have given no argument to show that it will lead to an encouragement of winter dairying. There is nothing to show that it will induce the farmer to extend or increase his winter milk supply. There is nothing to show that that is going to happen.
We have had a case made that farmers will always do what pays them best. I am sorry the Minister for Agriculture is not here, because the one thing that the Minister always impresses on the House is that farmers will do what best pays them, that the farmer knows what pays best, and that you cannot very well force him to do anything else except what he knows from experience will pay him. We had the position for a great number of years that there was a very marked difference in the price of butter as between the winter and summer time—a very marked increase. Still the farmer did not go in for winter dairying. He would have done so on the Minister's theory if winter dairying paid him. Now the position is that more and more it is coming to this, that owing to imports from Australia and New Zealand, where dairying is carried on under summer conditions during our winter period, the price as between summer and winter has become more equable. The difference between winter and summer prices tends to disappear. I think it is clear to anyone who has studied the Report of the Tariff Commission that there is not sufficient inducement in this tariff to get the farmer to increase his winter milk supply or to go in for winter dairying. I do not think that there is sufficient inducement. We had some remarkable statements from Senator O'Hanlon in that regard. I think they are worthy of being quoted as the statements of a man who has some practical knowledge of this matter, knowledge which I do not personally claim to have. Speaking in the Seanad on 18th February, Senator O'Hanlon said:
The price of milk in summer—I am talking of the creameries—is anything from fourpence to fourpence-halfpenny per gallon. In the best years it was 5½d., 6d., and 6½d., but take it that the producer is to get an extra 1½d. per gallon for his winter production, does anybody who knows anything about the subject think that he is going to do it for that? There is no man keeping cows who for the sake of an extra 1½d. per gallon is going to be induced to produce a single gallon of milk more than he is producing at present. Even 2d. or 3d. a gallon extra would not be a sufficient inducement to him.
That is how I feel about it. What are the advantages to be gained from the heavy burden that has undoubtedly been placed on the consumers? We had the Minister for Agriculture speaking when this resolution was moved on 22nd January last. He said then:—
Deputies should be aware of this, that the imposition of this tariff now will put up the butter until the opening of the butter season by about 1d. per lb., and it will be sold round about 1/6 here.
I wonder where the Minister would get butter at 1/6d. per lb., now. It has gone up to 1/9d. and 1/10d. On the last occasion, I said that we would want to be sure that the farmers were benefiting by this extra price which the consumers are paying. Now we know that they are not. There is nothing to show that they are. We know that a very considerable burden is placed on the consuming public. Fourpence or fivepence per lb. extra for butter in a working class family is a very heavy tax indeed. We feel that the only effect which this tax has at present is that it is a method of increasing the revenue for the Minister for Finance. That is what is happening. We see no evidence, no enthusiasm, for it on the part of the farming community. It was, I think, Deputy Nolan, himself a farmer, who said that the effect of the tax would be to feed the farmer with a considerable section of his own tail. There is no doubt about that and there is no doubt that the proposition is one which has not got the consideration that it should get from the point of view of helping the farmer.
There may be a need—I am not saying that there is not—to help the farming community, and to go to the extent of doing something to encourage winter dairying, but I maintain that this is not the way to do it and that the people who are paying this heavy tax are asked to pay an undue share of whatever burden may be necessary to secure an improvement in the farmer's condition. When I refer to the consuming community I would point out that there are many small farmers in non-dairying areas who have to pay for their butter. I do not think that it is necessary now to go into the whole question of the marketing of butter or to argue that this particular proposal was caused by circumstances arising out of the marketing of butter in this country. The first proposal, the prohibition proposal, may have served a useful purpose, and I think it has to the extent that it prevented a panic and possibly the selling out of dairy stock which might have occurred if such measures were not taken, but on examination of this particular proposal and on weighting up the arguments for and against, it seems to me that the arguments are all against the continuance of this particular tariff and, because we feel that, we propose to vote against this motion.
We spoke here before as to the necessity for some control in prices. There has been no control, not any suggestion of it, so far as this particular commodity is concerned. It is a commodity which enters very largely into the budget of a working-class family, and if the price of butter is made prohibitive to the ordinary working-class family they will have to turn to an inferior article, margarine. I raised the point on 22nd January, and there has been no satisfactory explanation as to what is likely to happen. I feel that what will happen in regard to this tariff is that there will be a good deal of overholding of butter during the summer months. There is no way which I can see that that is going to be controlled, because, whatever measure of joint action prevailed up to recently, it would look, at least from the newspaper reports, as if that is going to disappear, that everyone will be on his own, and that every creamery will paddle its own canoe. If that is so, how will the Minister, or anybody else, regulate the amount of butter to be put into cold storage and the amount to be put on the market? I feel that there will be a tendency, not alone on the part of creameries, but on the part of business men, to overhold butter, and that will counteract any tendency there is to encourage winter dairying or to increase the production of milk in winter by the farmer.
Do you mean that that will bring down prices?
Mr. O'Connell
It may.
Mr. Hogan
Is not that what you mean?
Mr. O'Connell
We are either going to do it for that purpose or for the encouragement of winter dairying. I feel that there may be no encouragement for winter dairying if overholding is allowed to continue, and it will continue, because there is no way of controlling it. Although there has been a good deal of criticism of the I.A.C. marketing scheme, I would be glad to see, because it is essential, in my opinion, for the butter trade of the country, some scheme of combined marketing, and I believe that we are not going to make much national progress until we have some such scheme. When the I.A.C. was first brought into operation it would, in my opinion, have been much better if the Minister had taken his courage in his hands and brought all the creameries into it because I feel that if there is anything more than another responsible for the failure of that scheme, so far as it has failed, it is the fact that others were allowed to lie out and to be encouraged, naturally, by people who were not anxious, to say the least, for the success of the combined marketing scheme.
Coming back to the question of the tariff, I may say that I am depending largely on the report of the Tariff Commission itself. As I have said, I have never read a report of the Commission in which there was a weaker case made for the imposition of a tariff than in this case. On the main issue the application failed, and on the question of the encouragement of winter dairying there is nothing to show that this particular scheme is going to encourage it. I would suggest to the Minister that what should be done is not to impose a tariff, but to examine the whole problem with a view to seeing what positive action might be taken in the way of subsidy, if you like, or any other way, for there may be many other ways of encouraging a better milk supply and the better marketing of all our dairy products. I submit that you are not going the right way about it by simply clapping on a tariff, by getting the consumer of butter to pay a sum of £45,000 into the Exchequer, and leaving it at that without giving a guarantee that what the consumer pays is going to the producing farmer. There is no evidence that that is what is happening. I am satisfied that the tariff is not warranted by the circumstances of the case, and I therefore intend to vote against it.
While we agree with Deputy O'Connell as to the unsatisfactory nature of the report presented by the Tariff Commission in regard to this matter, nevertheless we do not think that this report, which we are prepared to give effect to, any more than some of the reports which we have criticised and opposed in this House, gives a fair presentation of the case for the butter tariff. We, like Deputy O'Connell, criticised the manner in which this proposal was put before the House. We know that if it had not been for the difficulties in which a certain organisation in which the Minister is interested but for which he disclaims responsibility——
Mr. Hogan
I accept responsibility now.
Even though now that he has decided to bury the baby he is accepting responsibility for it, if it had not been for these difficulties, we are very doubtful whether this tariff would ever have seen the light of day. We feel that one of the charges, one of the criticisms which can be levelled against the Government in respect of this matter is that the tariff was imposed so late in the year that the butter producers reaped little or no advantage from it, and that the only person who, at the present stage and probably since the 1st February, derived any benefit from it has been the Minister for Finance. But the fact that the Government has been dilatory in imposing the tariff, the fact that the Minister for Agriculture has been equivocal in his support of it, does not at the same time make us close our eyes to the justice of the farmers' case. While we admit that possibly during the next year a certain section of the farmers will reap some benefit and advantage as a result of the tariff, possibly benefits and advantages, if you like, at the expense of other sections of the community, nevertheless we think that this issue is not to be determined merely by the fact that that advantage would be derived to a certain extent at the expense of other sections. We have got in this matter to try to look at the question entirely from a national point of view. One of the advantages the nation has secured as a result of the tariff has been at least that £355,000 which would otherwise have gone out of the country during the past year has remained in it, to the benefit of the whole community, and that furthermore that industry, in which the Minister for Agriculture only three years ago sunk no less a sum than something like £500,000, has been preserved from the scrap-heap. We think that fact in itself if no other would be a justification for a tariff. Undoubtedly if the position which existed when the tariff was first imposed had been allowed to continue, the dairying industry in this country would not have been able to stand up to the shock and would inevitably have gone down and the State as a whole would have been faced with a very much more serious problem than that with which it has to deal to-day.
I also agree with Deputy O'Connell that the tariff in itself is not going to save the industry. I believe that there must be a complete re-examination of the whole question. Speaking as a layman and, of course, as one not familiar with all the details, I am not satisfied that we are going to be able to develop the dairying industry in this country much further. I may be wrong, but I see, particularly as far as the market in Great Britain is concerned, that the production of Australian butter has been almost doubled in one year. That butter is coming on the market now in the winter-time, and possibly because there is going to be a surplus over the requirements of that market, in due course it will be overheld to bring down our prices in the summer-time. For that reason, unless a really serious examination of the problem is made, not at the eleventh hour as was done in the case of the tariff, we are going to be faced year after year with recurring crises in the dairying industry. It would seem that in presenting this report the Tariff Commission laid particular stress upon the encouragement which this tariff would give to winter dairying. I can see it giving a certain encouragement to it. I think it is not going to encourage creameries very much at the beginning to go in for winter dairying, but I think indirectly it will stimulate the winter production of farmers' butter in this country. I think possibly that will be the principal way in which winter dairying will increase. I cannot see how the creameries as a whole are going to secure any benefit from the operation of this tariff or, to put it in another way, how this tariff is going to increase the summer price for the creameries unless there is a certain amount of over-holding for the winter time. Unless that over-holding is very judiciously carried out, unless there is just enough held over to meet the winter requirements of the home market, then inevitably what the creameries gain by over-holding from the English market in the summer, they are going to lose by having to dump it on the winter market. I move the adjournment of the debate.
Debate accordingly adjourned.