I move the adjournment of the Dáil until to-morrow at 10.30 a.m.
Adjournment Debate. - Closing of Co. Tipperary Creameries.
I gave notice yesterday that I would raise a question on the adjournment dealing with the closing of County Tipperary creameries. I had a question on the Order Paper dealing with the matter. The question reads:—
Mr. Fogarty asked the Minister for Agriculture if he is aware that the Grange, Rosegreen and Cashel Dairies were closed down on the 16th June, 1931; and whether, in view of the hardships on suppliers, who are obliged as a result to go considerable distances to outlying creameries, he will state if and when it is intended to reopen these dairies.
In reply, Mr. Lynch (for Minister for Agriculture) stated: I understand that the Grange, Rosegreen and Cashel Creameries have been kept open by the co-operative society to whom they were transferred, and that milk suppliers who are going considerable distances to outlying creameries can recommence at any time sending their supplies to these creameries.
Mr. Fogarty: I will raise this matter on the Adjournment.
On 13th May I asked the following question regarding the same matter:
Mr. Fogarty asked the Minister for Agriculture to state the reasons for the sale of the Rosebower Dairy, Cashel, with its auxiliaries at Grange and Rosegreen, to the Ballyduff Creamery Committee, and the price paid for same, and if he will further state what price was paid to Mr. McCluskey and Mr. Hanly for the creameries purchased from them by the Dairy Disposals Board, and also why, in the resale of the creameries mentioned, a preference was not given to the suppliers.
In his reply the Minister for Agriculture stated:—
With regard to the opening and concluding portions of the question, the reason for the course adopted was that the retention of a central creamery in Cashel was considered undesirable on grounds of economy. I am not prepared to give the figures asked for in the second and third parts of the question.
In a Supplementary Question I asked:
Will the Minister say if the Cashel creamery and its auxiliaries are in possession of the Ballyduff creamery? Do they hold them yet?
The Minister replied: No, we hold the creameries.
These creameries were taken over the heads of the suppliers last November by the Dairy Disposals Board. They were worked by the Dairy Disposals Board until May and were then sold over the heads of the suppliers to the Ballyduff Creamery Committee. Ballyduff is a distance of 21 miles from Rosegreen and the cream has to be transported that distance at a cost of £600 yearly. The Cashel suppliers consider that this is not fair to them. They objected to sending milk to these creameries and sent it to outlying creameries. Two officials from the Dairy Disposals Board came down to make a settlement. One of them, Mr. Breen, told us that by joining with Ballyduff we were going to gain £1,000 a year. He did not consider the other side of the question, what it would cost to bring the cream from Cashel to Ballyduff and Rosegreen. We asked him would he consider the question of opening up the main dairy in Cashel and in reply he wanted to know if we were prepared to put down £8,000 although the creameries have been sold to Ballyduff for £5,200. We would have to put down £8,000 before he would give us the creameries. We told him we were not having that, and we asked him on what grounds we should be victimised to the tune of £2,800. Mr. Breen then left the hall and a deputation was appointed to meet him. He told the deputation that he could not give the creameries, but he came down in the price to £7,000 here in the House. I wonder if the Minister thinks that is fair to Cashel. The price has now been fixed at £5,200 for a creamery with a supply of 4,500 gallons. I always thought that the Dairies Act stipulated for £1 a gallon. That does not appear to be the case here. Surely if Clonmel got a supply of 3,800 gallons at a purchase price of £3,200, Cashel should be entitled to some consideration. If the Minister is going to do justice he should see that these creameries are re-opened and handed over at the right price. It is not fair to victimise Cashel to the tune of £800.
We bid £4,000 for those creameries and the Minister will not accept that. Surely he must have an interest in Ballyduff when he wants to send the cream that distance or give it to a creamery that is in liquidation to the tune of £2,100, with another £700 for machinery. He must want to job upon the milk supply of Cashel when he is going to hand all this to Ballyduff. That is not fair to Cashel. The Minister wants to take the cream from the centre of the Golden Vale, within five miles from the station, to Ballyduff, on the brow of a bog. We hold that if you want to have a central creamery, Cashel is the place. There you will be within 400 yards of the railway station; you will be in an urban area where you can get a trade which will consume practically all your output. We have that guarantee if this central creamery is opened and I would ask the Minister to open it. Heretofore there were two main dairies in Cashel and now they are closed and we are to get only an auxiliary. We think that is not fair.
The Minister should open up the creameries and allow us to take the cream to be churned as heretofore in Tipperary and so avoid causing hardship to the suppliers by asking them to travel five or six miles. In the case of Cashel it is pure victimisation. We are entitled to the same treatment as Clonmel. We should get our creameries at £4,000 sufficiently equipped to pass a Dairy Board Inspector. Perhaps it is that there is a better organisation of Cumann na nGaedheal in Clonmel than there is in Cashel. There is something in it, anyway. The Minister has been offered a good price for the creameries, more than they are worth. The main dairy in Cashel is little better than scrap iron. There are six-inch walls with boards and felt. They gave a dairy to Clonmel at £3,200, a stone building fully equipped with machinery, and we are entitled to the same consideration.
Do I understand from the Deputy that the Disposals Board at one time asked £8,000 for this creamery and they are now prepared to accept £5,200?
Yes.
I wonder on what basis did the Disposals Board arrive at their original calculation?
Is the Deputy now suggesting that they are offering the creamery too cheaply to the people?
No. I am wondering why they asked originally what is apparently an outrageous price. If they are prepared now to accept £5,200 it looks as if the £8,000 formerly asked was an outrageous price. If they have been able to come down from £8,000 to £5,200 there would seem to be something in the contention that they could very well come down from £5,200 to £4,000. I am not suggesting anything, but I would like to know how they arrived at the figure of £8,000.
I can answer that question off-hand. I do not know whether the Disposals Board asked £8,000 originally. I do not keep in touch with all the negotiations that take place between the Disposals Board and the creameries. I know, however, that if I had property that I was prepared to sell for £5,200 I would begin by asking £8,000.
Is that the manner in which the Disposals Board proceed with their negotiations?
Mr. Hogan
Absolutely. There are people here in the House who, if you are to believe them, seem to have no experience at all of business dealings. I may say that that is not only the business method of the Disposals Board, but it is the method by which everybody does business. It is just ordinarily what is done every day. It is the method by which the White Star line would be sold to-morrow morning if it were for sale. That would be the method that would be employed.
I hope the Minister is not trying to justify his attitude by introducing the White Star line.
One would imagine that the Cashel creamery could be discussed calmly anyway.
Mr. Hogan
I do not know what the Disposals Board asked originally. I am not at all interested but I assume the method they employed is the method by which anybody would make a bargain. I have made a few bargains, not possibly of the same magnitude as those made by Deputy Flinn. If I were making a bargain I would ask considerably more than I would be prepared to take. That is what I always do. In making up my mind what I was going to ask, I would try to sum up the psychology of the people to whom I was selling and if I thought they would begin low I would begin high and possibly we might agree on the price later on. At any rate that is the completely unscientific method of bargaining and selling that we adopt when we are selling any property. We act, strange to say, the same as any business man would act.
We have no scientific rules to regulate these matters. So far as this particular creamery is concerned, the position is this: There were two central creameries in the town of Cashel and two auxiliary creameries, and for years these two central creameries were owned by proprietors. For years the farmers had no say good, bad or indifferent in the running of these creameries; no rights to any of the property, no rights to any of the profits, and no rights to the trade and the development. In fact, none of the rights that they are so anxious about now. That was the position for years, and but for the fact that we intervened that would be the position for ever.
Were you not asked by the proprietors to take over the creameries? Is not that a fact?
I understood you to——
Mr. Hogan
I must ask Deputy Flinn not to interrupt. I will speak for myself.
What I wanted to ask——
Please let the Minister answer the question asked by Deputy Fogarty.
Mr. Hogan
We have made it quite plain to all proprietors that we want to buy their creameries. There is hardly a creamery proprietor in the country who does not know that we are out to buy the creameries. Every proprietor has come to the conclusion that that is the position. The point I want to get the Dáil on is this: that these creameries were owned by proprietors for generations. They drew quite legitimate profits from these creameries and they put the profits in their pockets. They made any arrangements they wished, and the farmers had no say good, bad or indifferent in it. We intervened and bought up the creameries and transferred them to the farmers. If we had not intervened that would be the position to-day, and Cashel would not have a word to say as to where the milk was going, or would have taken no interest in any of the matters in which Deputy Fogarty is now so interested on behalf of the people of Cashel. At that time the farmers of the district around Cashel were carrying the overhead expenses of the working of two proprietary central creameries and two auxiliary creameries.
And getting as good a price as other creameries.
Mr. Hogan
They might, and better. The times were better. These suppliers were carrying overhead expenses for two central and two auxiliary creameries on a milk supply of 5,000 to 6,000 gallons daily.
Not at all. Some of them were getting over 1,200 gallons of milk a day.
Mr. Hogan
What does the Deputy say the milk supply of the area was?
It was at least 4,500 gallons.
Mr. Hogan
I said 5,000 to 6,000 gallons. However, the milk suppliers were carrying all the overhead charges on, we will say, as the Deputy puts it, a milk supply of 4,500 gallons. We will not dispute whether it is 4,500 or 5,000 or 6,000. Anyone who comes from a dairying district, or who knows anything about creameries knows that one central creamery can hardly be run economically on less than 4,000 to 5,000 gallons of milk daily.
How is it that Clonmel run their creamery on 3,000 gallons?
Mr. Hogan
I say that everyone knows that a milk supply of less than 4,000 or 5,000 gallons is not an economic supply for a central creamery. The average central creamery would have a milk supply of 8,000 to 9,000 gallons. But here in Cashel there were two central creameries, and two auxiliary creameries, bearing all their overhead expenses on a milk supply of 4,500 gallons. I suppose Deputy Fogarty will agree that it is difficult to run an auxiliary creamery on less than 1,000 gallons of milk daily and there were two auxiliary creameries. If you require say 3,000 gallons of milk daily for any sort of a central creamery you will agree that for the two central creameries you will require at least 6,000 gallons of milk daily, and for the two auxiliary creameries at 1,000 each there would be 2,000 gallons. so, for the four creameries altogether a minimum daily supply of 8,000 gallons would be required in order to make the creameries an economic unit. Yet the farmers were carrying the overhead expenses on these two central creameries, and two auxiliary creameries for generations on, as Deputy Fogarty puts it, 4,500 gallons of milk, and there was not a word of complaint about it. The farmers then had no anxiety about their rights, or the development of the butter trade. To-day, when the taxpayers' money comes in to make them the owners of their creameries, we have all these questions raised about their rights. Now we got those creameries. I suppose Deputy Fogarty will admit that one central creamery in Cashel is enough. Nobody will say that you require two central creameries to handle, say, 5,000 gallons. It takes a lot more than £700 or £800 a year to run a central creamery, and it costs £400 to £500 to run an auxiliary creamery. At one stroke we were saving the milk suppliers of Cashel at least over £1,000 a year, and possibly very much more in the running of these creameries. The question for us is whether we can save them any more, having regard to the fact that there is a small milk supply. We have a duty not only to the farmers, for whom we are trying to do a good turn, but we have a duty also to the taxpayers who have to put up all that money.
We have a duty to see that this particular unit will be made economic and have the prospect of becoming economic in the future. In other words, from the point of view of the farmers, the more overhead expenses we can save the better. Deputy Fogarty will admit that an auxiliary creamery would have no difficulty in handling 5,000 or 6,000 gallons of milk daily. Also it would cost less to run an auxiliary than to run a central creamery. In that state of affairs we proposed to dispense with the two central creameries in Cashel and run one auxiliary creamery. That, from the business point of view, was undoubtedly the correct thing to do. We proceeded to carry out that arrangement and in pursuance of that arrangement we decided to sell this auxiliary creamery to some other co-operative creamery in the neighbourhood.
If we were establishing a central creamery in Cashel it would be a question of organising a co-operative society to take it over. Having come to that conclusion, we had to decide with what centre it would be connected. We offered it to a neighbouring creamery and, while they were quite willing to buy it, they made terms which we thought most unfair to the farmers who would be supplying the auxiliary at Cashel. The Deputy knows what I am driving at. We refused that and we offered it to another creamery, the Centenary Creamery, which the Deputy mentioned. They agreed to buy it for £5,200, and agreed to take in the suppliers as shareholders and give them the same rights as anybody else in the Centenary Society. We regarded that as quite a fair bargain, favourable in the interests of the farmer.
Was it a fair bargain for the suppliers in Cashel?
Mr. Hogan
That is what I was saying; it was fair so far as they were concerned. I need not go into the question of the Centenary Creamery. It is a good creamery and has a good reputation. The Deputy said certain things about it, but, as I understand the matter, it is a perfectly solvent, first-class creamery and it was always regarded as that. They were well able to pay us and to run this creamery. If they had taken it over at this price the result would be that the milk supplies of the Centenary Creamery would be increased by 5,000 gallons. That would improve and strengthen the position of the creamery and, on the other hand, the Cashel suppliers would belong to a unit which is handling a very considerable quantity of milk, 8,000 to 10,000 gallons. When we made our agreement the people of Cashel objected. The objection was raised practically entirely by the townspeople of Cashel.
I deny that charge. A committee was appointed from the suppliers and they asked me to assist them.
Mr. Hogan
The quarrel started in the town of Cashel; there is no doubt about that. The people who had no cows and were not interested in cows took a tremendous interest in the matter. The agitation was quite successful, and we decided that, in view of the opposition which suddenly showed itself amongst people who seemed to have no interest in the creameries for the last ten or fifteen years, we would not force the Centenary Creamery to carry out its agreement. We considered it would be unfair because they would be taking over people who professed to be unwilling to supply. We opened the creamery. What happened? The supplies were not sent. We kept the creamery open for three or four days and it was then threatened that the water supplies would be cut off. I then closed the creamery.
It was not you closed it. A man came and locked the creamery and cut off the water supply.
Mr. Hogan
On our instructions the creamery was closed.
On 13th May I asked you if Ballyduff owned the creameries and you said no.
Mr. Hogan
And I say that now. Even if we had an agreement with Ballyduff, having regard to the agitation in Cashel we did not think it fair to take action for specific performance against Ballyduff and we did not press them to take over Cashel creamery. Anyway, we closed the creamery. When it was open no milk came in, and there was a threat about the water supply being cut off. The creameries are still closed.
You did not close them until the 16th of this month. They were open for a month and the managers were paid.
Mr. Hogan
Was there milk coming in there?
No.
Mr. Hogan
That bears me out. There was no milk supplied for a month and we closed the creameries. That is the present position. I am asked what we are going to do. We could have got £5,200 for the creamery and we regarded that as a fair price. Even at that price a certain subsidy would have to be paid by the taxpayer, but we would not take less. You will have a central and two auxiliaries for £5,200 and in very poor parts of Ireland centrals and auxiliaries have had to be put up by farmers who live on much smaller holdings than the farmers around the town of Cashel. Cashel is in the Golden Vale and, presumably, the land, as the Deputy pointed out, is good. It is not like West Cork and parts of Kilkenny, where farmers had to put up creameries without any help. Will the Deputy tell me where there was a central and two auxiliaries put up for £5,200? In fact, he offers £4,000 for a central and two auxiliaries, provided we put them in first-class order. A central and two auxiliaries in first-class order would cost, at least, £8,000—the central £5,000 and the two auxiliaries £3,000. What the Deputy wants is £8,000 worth of property for £4,000. I do not blame him for asking it. He is adopting possibly the same tactics that I do, but, as between one man and another, I may tell him that he is not going to get them at that price.
Is not the price of these creameries based on the milk supply? Is not that what is laid down in the Act?
Mr. Hogan
No. The Act does not deal with creameries; it deals with milk supplies alone. If we close creameries and sell milk supplies, we sell for round about £3 a cow, or £1 a gallon, but if we sell not only milk supplies but building and plant, we charge something more. £3 a cow would come to something like £4,700 or £4,800, and we charge something extra for plant, machinery and so on. What the Deputy is asking me on behalf of Cashel is to give him £8,000 worth of property —the creameries being put in first-class order—for £4,000. That is asking too much and we will not give it. The reason we will not give it is because it would not be fair to the taxpayer. The taxpayer has done the handsome thing already by buying out these two proprietary creameries and giving a fair price.
How much?
Mr. Hogan
I shall not tell you.
We were told that the price could be whatever they liked, and if that is so you could sell them at whatever price you like.
Mr. Hogan
When you are making a bargain you have, in the end, to do the fair thing. Supply and demand regulates the matter eventually. We are not going to sell these creameries for £4,500. The creameries were worth what we paid for them.
You paid a good price for them, and you want us to do the same.
Mr. Hogan
We can get £5,200 for these creameries and we will sell them for no less.
You paid £1,200 for the auxiliary.
Mr. Hogan
How do you know?
You paid £1,200 for the auxiliary and you got a free grant which more than paid for the cost of building and equipping it. There is nothing in it but six-inch walls with scrap iron.
Mr. Hogan
The Ballyduff people are not fools, and they paid £5,200. We could have got that from another society.
It was not for our good that the Ballyduff people came up to take our creameries.
This is not a debate.
Mr. Hogan
We could have got that from another society, but they made conditions which we thought we should refuse to accept.
What about the suppliers of the three creameries? They should get first consideration.
Mr. Hogan
They did get first consideration.
They did not.
Mr. Hogan
It was because we were considering them that we refused to open a central creamery there.
You never let us know you were selling them. You sold them behind our backs.
Mr. Hogan
If you like to say so, we sold them behind your backs because we did not consider it a wise thing in the interest of the farmers to have a central creamery there. After all, what claim had you to them?
There is no use in carrying on a debate in this fashion.
There are certain people in Ballyduff on the Committee that the Minister wanted to do a good turn to. That is the whole question. There are certain people upon that Committee and he wants to give them a turn on this. They were to build up a good dairy and they would get suppliers for them.
Mr. Hogan
I did not know who was in Ballyduff until the Deputy himself told me.
The Minister knew right well.
Mr. Hogan
I do not expect the Deputy to believe me, but I did not. The Deputy knows that there is such a Board as the Dairy Disposals Board. I have no personal interest in these creameries —not the slightest. The Deputy talks about our refusing to give suppliers a say in the matter. I am entitled to ask why should we take all this trouble to consult suppliers. They went on for years supplying proprietary creameries. We bought them over. Having bought them over with the taxpayers' money, we have to safeguard the taxpayers' interest and see that the new unit established there is an economic unit. If we had to enter into negotiations with every body of farmers affected by the purchase of creameries, we would never have succeeded in putting through a single transaction of this class. Having listened to this debate so far, I think you, a Chinn Comhairle, will agree with me in that. The creameries are there. We are not going to be blackmailed in this matter. We are not going to part with these creameries except for their value. Even at the price of £5,200, the taxpayers will have paid a substantial sum in the interests of the farmers of Cashel. If the Deputy likes, he can have the creameries at that price. We will not give them at any lower figure.
Will the Minister tell us if the difference between the price he asked—£8,000—and the £5,200 which he is prepared to accept is included in the £163,000 by which he has written down the value of the creameries in the Budget this year?
Mr. Hogan
I do not follow that question.
The Dáil adjourned at 10.50 p.m. until Friday at 10.30 a.m.