asked the Minister for Finance whether he will give immediate encouragement to tobacco growers by removing existing restrictions and by making arrangements for any duty to be collected from manufacturers of tobacco rather than from growers.
Ceisteanna—Questions. Oral Answers. - Duty on Tobacco.
Regulations referred to by the Deputy are necessary for the security of the revenue obtained from the duty on tobacco and so long as a duty is chargeable on either imported or home-grown tobacco the removal of the restrictions imposed by the regulations would not be practicable.
If the second portion of the question refers to any duty which may be imposed in the future on home-grown tobacco, I would remind the Deputy that during the period of maturing the tobacco is usually kept in Bonded Warehouses and the duty is in fact paid by the manufacturer who obtains delivery of the tobacco for manufacturing purposes.
I think I might take this opportunity to dispel some misapprehensions which seem to have arisen in consequence of the remission of duty on home-grown tobacco. While the Excise Duty continues to be completely remitted, growers must understand that their operations are undertaken at their own risk. The Government will accept no responsibility for making a price. The grower will have to see to the curing, after which come the operations of rehandling and marketing, and must make his own arrangements in regard to these. Naturally if too much tobacco is grown, cured and marketed, the price will undoubtedly be much lower than if growing is done on a reasonable scale. Growers, and particularly those who have had no previous experience, are accordingly strongly advised to make their arrangements with manufacturers for the rehandling and subsequent disposal of their crops before embarking on the experiment.
Intending growers are referred to the Tobacco Growing Manual issued by the Department of Agriculture and to the notice of the Revenue Commissioners regarding the cultivation of tobacco, which, among other things, points out that tobacco may only be grown and cured in Saorstát Eireann by persons who have taken out the appropriate Excise licence and that both land and premises must be approved by the Revenue Commissioners.
Might I ask the Minister if in my constituency of Leix-Offaly a farmer at the present time grows tobacco will he be liable to duty with regard to that tobacco?
If the grower does not fulfil the regulations he will be liable not merely to duty, but to penalties. But I may add that at the present moment Irish grown tobacco is duty free.
I may take it then from the Minister that the farmers who grow tobacco at the present time will grow it duty free if they comply with the regulations?
I cannot commit myself as to the future, but, at any rate, it is not the present intention of the Government to change this policy.
Then I cannot ascertain from the Minister, for the information of those people, that the tobacco they grow will be free of duty. Can I explain to them that it will be duty free and take that information back?
I am afraid the growers of tobacco are in the very same position as the growers of any other commodities in this State. Whether there is duty to be put on it or not will, to some extent, depend on the necessities of the Budget and will, of course, largely depend upon the general policy of the Government. The general policy of the Government with regard to tobacco is to encourage it so far as that can be done at a reasonable cost—that is to encourage the growing of tobacco here.
Will the Minister appreciate that at the present time when farmers are so keen and interested in the growing of tobacco, and as they are not asking for any subsidy as in the case of beet, that it would be of importance to them to be told beyond question that they will get the benefit of the tobacco that they grow being duty free?
First, I should like to say this, that the farmers are getting the full benefit of the present Customs duty on tobacco, which is at the rate of from 9/4 to 10/4 per lb. The average yield of a properly cultivated acre of tobacco is between 800 lbs. and 1,000 lbs., so that there is an inducement of between £360 and £480 per acre offered to the Irish farmer who grows tobacco.
Does the Minister fear it may become too popular?