I move:
1. That there shall be charged, levied, and paid in respect of all butter (with such, if any, exceptions as may be prescribed or authorised by statute) imported into or manufactured in Saorstát Eireann on or after the 21st day of April, 1932, a levy at such rate or several rates as may be prescribed by statute or by the Minister for Agriculture under statutory authority.
2. That the levy mentioned in this Resolution shall be charged, levied, and paid in respect of all butter (with such, if any, exceptions as may be prescribed or authorised by statute) which is held in stock in Saorstát Eireann on the 21st day of April, 1932, by manufacturers, factors, cold storage proprietors, and other persons engaged or concerned in the butter trade.
3. That the levy mentioned in this Resolution may be charged at different rates in respect of different classes of butter, and all or any of such rates may be varied from time to time by the Minister for Agriculture under statutory authority.
4. That the levy mentioned in this Resolution shall be paid to the Minister for Agriculture and shall be applied by him, directly or indirectly, in or towards payment of a bounty at such rate or rates as shall from time to time be fixed by statute or under statutory authority on all or any particular classes or class of butter, cream, milk, and milk products exported from Saorstát Eireann, or in or towards such other purposes as may be authorised by statute.
5. That the levy mentioned in this Resolution shall (save as is hereinafter otherwise provided) be payable by the following persons, that is to say—
(a) when payable in respect of butter manufactured in Saorstát Eireann, by the manufacturer of such butter, and
(b) when payable in respect of butter imported into Saorstát Eireann, by the importer of such butter, and
(c) when payable in respect of butter held in stock in Saorstát Eireann on the 21st day of April, 1932, by the owner of such butter.
6. That notwithstanding anything contained in the next preceding paragraph of this Resolution, the levy payable in respect of butter manufactured in or imported into Saorstát Eireann may be made payable in particular classes of cases by persons acquiring such butter (otherwise than by retail purchase) directly or indirectly from the manufacturer or the importer (as the case may be) thereof.
7. That provision shall be made by statute for the collection and enforcing payment of the levy mentioned in this Resolution.
I am advised that in order to comply with the Standing Orders and to follow the established practice of the House a Resolution in this form is necessary preparatory to the introduction of a Bill to deal with the stabilisation of prices the terms of which will provide a levy to be made on all butter imported into or manufactured in the Saorstát. The Resolution which has been circulated to Deputies gives an indication of the financial bearings of the proposed Bill. The position of the dairying industry is not unknown, I am sure, to any Deputy in this House. Up to the end of 1929 the prices secured for creamery butter in the Irish Free State were never from the time of the war below 160/- per cwt. The prices paid by the creameries to the milk suppliers were never below 6d. a gallon. But somewhere about October, 1929, the prices began to fall. The price has continued to fall both for butter and milk from that time up to the present—that is, taking world prices.
There were of course certain interruptions in the fall here on account of the tariff. In the year 1930 the average price which was secured by creameries for their butter was 126/-. That price, compared with the average of 160/- for the previous seven or eight years, was a very big decline. As a consequence of the fall in the prices of butter the creameries during that year were only able to give an average price of 4.9 pence per gallon for milk. The year 1931 is worse still. In 1931 the creameries were only able to give an average price of 4.3d. per gallon as they themselves could only get 115/- per cwt. The position that we were faced with became acute during 1930, and as a result of that a tariff was imposed towards the end of the year 1930. During the two winters that have passed, 1930-31 and 1931-32, the prices of milk to the producer and the price of butter did rise for a certain period. But unfortunately for the producers it was only at the time when they were at the lowest point in their production. At the period of the year when they were producing most heavily the price was low. This year it looks as if we are facing even worse conditions. For the first three months of this year Danish butter sold in the British market was lower by in or about 10/- a cwt. than for the first three months of last year, so that if the trend in prices is to continue as it has been continuing for the last two years and as it appears to continue during the first three months of this year we may expect that the export price will be down another 10/- within a year as compared with last year.
It has been the experience of this country for the last seven or eight years that the price of Free State butter on the British market has been invariably lower than the price paid for Danish butter. Some years the difference has reached as much as 21/- or 22/- per cwt., and even in the most favourable year the difference was 13/- per cwt., so that we may take it that the Free State butter this year will not at its best reach the price of Danish butter. Danish butter is now quoted on the British market at 116/-. That is, after duty has been paid and after freight has been paid. If we take it that the Imperial preference that may be given to our butter is equated by the consumer's preference for Danish butter, we cannot, if we had butter to export at the present time, expect to get more than 115/- or 116/- a cwt. for it. Now, that is lower than last year. The price is down, so that if we continue as we are we cannot hope for better conditions, and I am afraid we must face worse, in our export butter market.
There are other things which we must take into account. Denmark, which was the biggest exporter of butter to the British market, had, up to this, an alternative market. Denmark sold a certain amount of butter in Germany. The Danes were able at certain times when the prices in the British market were falling to a very low point, to deflect their supplies into the German market and thereby create a demand in the British market with a consequent rise in price. Now Germany has put a tariff of 56/- per cwt. on butter, and it is not likely that Denmark will find an alternative market in Germany again. So that the Danes will be compelled practically to sell all their butter in the British market. The same will apply to other North European countries, such as Sweden and Finland. Along with that, we have New Zealand and Australia year by year increasing their exports very rapidly.
If we take 1928, which was the last complete year in which the prices held on the British market at the normal level that had existed for six or seven years after the war, the amount of butter imported into Great Britain in that year was 6,121,000 cwts. That would appear to be the amount that the British consumers could take at the price then ruling of 160/- per cwt., and as that quantity has been exceeded the price has gone down. That quantity has been exceeded every year since. Last year it amounted to the very large quantity of 7,850,000 cwts. Denmark, New Zealand and Australia are chiefly responsible for the large quantity of butter that has been imported into Great Britain. As a matter of fact, if we take the increase of either New Zealand or Australia last year as compared with the 1930 exports, we find that that increase alone was more than the Free State was sending into the British market.
Taking those different factors into account—the trend of prices, the fact that Denmark and other North European countries are confined to the British market, and the tendency of New Zealand, Australia and other countries to increase exports—we have a very serious position to face. We believe our producers cannot continue to produce under the present prices. Our exports are going down. Last year our total exports of butter were considerably below the figure for the previous year. Even the output of our creameries is going down. They were down from 675,000 cwts. to 605,000 cwts. Although we have no figures to prove it, I am told that the quantity of butter handled by merchants is also going down. Having more or less decided that we can scarcely continue to face the competition, the question we have to ask ourselves is, can the others continue? If we think that the other countries which are exporting butter to the British market cannot continue it would be a mistake for us if we had got rid of our cows and dairy stock before there was a revival in the export market. Judging by the prices paid last year, and the trend of prices as they usually go up from spring to summer, if we do not interfere we are not likely to get more than 105/- per cwt. for our butter. That would mean that the creameries could not pay more than 4d. per gallon for milk. It would mean that the producers who are not supplying the creameries would not receive more than 4d. per gallon either, if they did so well.
It is difficult to know what the production of milk costs. From the fact that the output of the creameries is going down, and that the export of butter generally is going down, we know that producers must find it impossible to carry on. The only figures from an expert source I could get were those which were given in evidence before the Commission on Agriculture in 1922. The figure given for the production of milk in 1914 was 5.62d. per gallon. It is certainly not less now. It is probably more. I think we must do something to help producers out of their difficulty in trying to produce milk to sell at 4d. that costs 5½d.
We must remember that dairying is the basic industry in agriculture, that we get not only our butter and milk supplies through it, but also the cattle that are reared in this country. To a great extent pigs and poultry depend on the success of the dairying industry. If these are all taken together—butter, milk, cattle, pigs and poultry—they must form more than one half of the total production, both agricultural and industrial, of this country. While we are endeavouring to get new industries going we should be careful to protect the industries we have. The position at present is, taking the creameries first, that they export half the butter they produce, and the other half is consumed at home. We cannot get any more for the half we export as we must take the best price we can get in competition with the rest of the world. The only alternative left is to turn to the other half which is consumed at home and to ask the home consumer to pay more. The scheme we have devised enables us to put a levy on the production of butter and to pay a bounty on exports. Taking a creamery as an example we get returns of production and we ask for a levy of 2d. per lb. which will probably be the sum mentioned in the Bill when it begins to operate. The amount will be variable. We know that the creameries will sell half of their butter on the export market and the other half at home. That means that we can afford to pay a bounty of 4d. where we put a levy of 2d. A creamery will, apart from this, be able to export butter at 105/- per cwt. A bounty of 37/4—4d. per lb.—will give them a price of 142/- for any butter they export. It is quite apparent that if a merchant at home wants to buy butter from a creamery he will get it at the same price, that is 142/-. In effect the creameries get a bounty of 4d. whether the butter is exported or sold in the home market. Having paid 2d. a lb. as a levy a bounty of 4d. is given back for every pound produced. That is a net gain of 2d. per lb. What does the creamery get? A net gain of 2d. per lb. or 18/8 per cwt. For the purposes of calculation I am taking the export price at 105/-. If this system were not in operation the creamery would get 105/-. With this scheme it will get 123/- so that there will be a net gain of 18/- per cwt. to the creameries calculated on this price. Butter sold f.o.r. from the creamery at 142/- will enable the retailer to sell at 1/5 a lb.
Under this scheme, we do not mean artificially to increase the price of butter above that figure. If by any chance the export price of butter goes above, say, 123/- per cwt., or 142/- per cwt., then we do not mean to pre vent creameries getting more for their butter at home. Neither would we prevent retailers getting more than 1/5 per pound. We do not mean to increase artificially the price of butter above 1/5. The levy and the bounty will have to be variable. If the export price goes up from 105/- to 115/- per cwt., if we still continue to pay a bounty of 37/-, it would mean that butter in the home market would go up by 10/- a cwt., and that the consumer would have to pay an extra 1d. per lb. If the export price goes up, we mean to bring the bounty down. What is more, if the export price goes up by 10/-, we mean to bring the bounty down by 20/-, so that the home price will come down by 10/-. The more the export price goes up, the more benefit the home consumer gets, until both prices—the home and export price—meet at 123/- per cwt. If the export price goes below 105/-, then we must follow it. If the export price goes below 105/-, we could not continue to keep the creamery price at 123/- without putting the home price above 1/5 per lb. We must follow the export price if it goes below 105/-. In other words, we are going to keep the price of creamery butter f.o.r. at 123/-, provided it does not exceed 142/- on the home market.
The result we are looking for is to enable the creameries to give a better price for their milk. That is how the pool for creamery butter will be worked. There will also be a pool for factory butter, but there the proportion exported is much higher and, therefore, on a levy of 2d. the bounty will not be 4d. but will be considerably less. We have not got exact figures at present in the case of factory butter.
The big objection to this scheme arises out of consideration for the home consumer. Before the end of 1929, butter was never sold, from the war period, below 1/8 per lb. During the last two years—1930 and 1931 —the price was never below 1/3, except once. That was for the second quarter of last year. These figures are taken from the cost of living report in the Irish Trade Journal. For more than half the period of the last two years, the price of butter was above 1/5, so that the burden being placed on the home consumer is not as big as at first sight appears.
I believe that this Bill will enable producers to remain in production. I do not think that it will give them a decent profit. I am very doubtful if it will give them any profit, but it may help to keep them in production. It will possibly preserve the foundation of our agricultural industry, which is dairying. I believe that the scheme places no undue burden on the home consumer. One thing we must all realise is that the producer must get his cost of production. Consistent with that, it is our duty to protect the consumer. I move the Resolution.