Dáil Éireann debate -
Tuesday, 27 Jun 1933

Vol. 48 No. 10

In Committee on Finance. - Vote 71—Beet Sugar Industry.

Mr. MacEntee

I move:—

"Go ndeontar suim ná raghaidh thar £15,000 chun íoctha an Mhuirir a thiocfaidh chun bheith iníoctha i rith na bliana dar críoch an 31adh lá de Mhárta, 1934, mar roimh-íoc chun Tionnscail an tSiúicre Bhiatais do leathnú.

That a sum not exceeding £15,000 be granted to defray the Charge which will come in course of payment during the year ending 31st March, 1934, as an advance for the extension of the Beet Sugar Industry."

This Estimate is required in order to provide funds for the inter-Departmental Committee which is being set up, pursuant to a decision of the Executive Council, for the promotion of a public company for the erection, acquisition and operation of sugar factories in the Saorstát. As set out in the footnote to the Estimate, legislation will be introduced at an early date to give effect to the Government's proposals for the extension of this industry. These proposals would provide among other things for the formation and registration of a new company; the advance from voted moneys of the preliminary expenses herein provided; the acquisition by the Minister for Finance of portion of the share capital; and for the taking of such other powers as are considered necessary for the successful expansion of the beet sugar industry in this country. Pending the introduction and passing of such legislation the promoters of the company will incur certain expenditure properly chargeable against the share capital of the company when it has been subscribed. It is the intention, however, of the Government to have, if possible, the new factories erected and ready to commence operations in the sugar-making season of 1934. Owing to the urgency of this matter, the officials who are promoting the company cannot afford to await the subscription of the capital, nor, since they are civil servants, is it considered proper that they should have to resort to borrowing. While it might be possible for them to obtain the requisite funds as an overdraft from a bank on a written guarantee from the Minister for Finance that the amount of the overdraft would be duly repaid, I have thought that the giving of such a guarantee would be improper as it would anticipate the sanction of the Dáil.

Provision is made in the Estimate itself for the initial outlay on stamp duty amounting to about £5,000, and registration fees, printing and establishment charges, and for such expenditure of the committee and its advisers as may be required. As I have already stated, the fact that the company will be in a position to deal with the beet crop in 1934 on a greatly extended scale will lead to expenditure being incurred in anticipation of the subscription of the share capital. We are anxious that arrangements should be pressed forward so far as possible to the point where constructional work on the new factories can be put in hands immediately after the necessary legislative authority to enable the company to start operations has been secured. The total amount involved in the Estimate is £15,000. It is possible that when the necessary estimates have been definitely made and the legislative proposals are put before the Dáil a very much larger sum will be required. The £15,000 is in the nature of preliminary and promoting expenses to enable the Government to go ahead and. have everything ready to put before the Dáil in the form of definite proposals when the Dáil reassembles after the Recess.

Mr. Minch

Is this a Government-promoted factory in which the civil servants are to be directors for the time being?

Mr. MacEntee

The Deputy must remember that the Government can only work through its public servants during the promotion of the company. While we are negotiating with the other interests involved in the sugar beet industry, here and elsewhere, the directors of the company will be permanent public servants.

Mr. MacDermot

The Minister referred to promoters. Will he have any objection to saying whether the persons to whom he refers as promoters and whether those who are civil servants are taking any beneficial interest in the new company?

Mr. MacEntee

The promoters of this company are civil servants.

Mr. MacDermot

Only?

Mr. MacEntee

Only civil servants. The Government, in fact, is promoting this company. There is no outside interest involved in it at present, good, bad or indifferent.

Mr. Minch

The Lippens' group are not interested?

Mr. MacEntee

Not in the company at the moment. The possibilities are that there may be some arrangement with the Lippens' group. I think that an extension of the sugar beet industry will have to take cognisance of the existing interests in this country, but no group either here or elsewhere has initiated this project. It has arisen from the desire of the Government to extend the sugar beet industry in this country and so far the Government has proceeded entirely on its own responsibility and on its own initiative.

Mr. Minch

I presume the Government will at a later stage issue a prospectus for the public subscription of shares?

Mr. MacEntee

Yes.

General Mulcahy

The Minister's statement, if you take what it has in it, and what it has not in it, is a most extraordinary one. It leads me to ask him either to amplify the statement he has made, if he has anything to add to it, or to ask the Minister for Agriculture to amplify that statement, and then to allow us to consider whether we might not report progress on the Estimate, with a view to allowing the House time to think over and consider the statement already made by the Minister and any other statement which may be made because, as I am sure both the Minister for Finance and the Minister for Agriculture will understand, this is an Estimate which has been in our hands only for a day or two. It implies, from what we have heard now, a very radical change in policy, or a radical addition to policy with regard to the development of the sugar beet industry in the country and, in connection with that, an immediate launching on a very large expenditure of money and the taking of very definite action that might commit the House in a number of ways. I am sure that the Minister will appreciate the difficulty in which the House is in having this proposal flung at its head with the little information it has. I would ask either the Minister for Finance or the Minister for Agriculture to add to the information given to us and to have a little mercy on us and allow progress to be reported on the matter so that it might be considered and so that we might come, with more fairness to the proposal itself, to further discussion upon it.

Mr. Dillon

My purpose in rising is to join with Deputy Mulcahy in the representation he has made. This is really no more than a token Vote committing the House to a certain policy, and I think it is only right that the House should have some idea of the nature of the commitments it is entering into in connection with this Estimate. When the question of the beet sugar factories arose at the Public Accounts Committee, last year, I drew the attention of the Committee to the expenditure in which this State was being involved and I asked for a memorandum, which, I have no doubt, every member of the Fianna Fáil Party has carefully read in the report of the Committee on Public Accounts. I drew the attention of the Committee to the fact that the Government, under the existing scheme, was purchasing the beet for the Lippens' factory and making them a present of it. They were purchasing all the beet that the Lippens' factory used and making them a present of it and, in order to induce Messrs. Lippens to accept the present, they went on to give them a further present of £29,000 per annum over and above the price of beet and then Mr. Lippens had the courtesy to produce beet sugar for the people of the Irish Free State. Now, we are going to start three more factories. That is what this means, and I think that the Minister for Agriculture, when he comes before the Dáil with an estimate of this kind, should give us a general review of what he thinks are the prospects of the beet sugar industry as a whole in this country and tell us what the total expenditure will be to which he proposes to commit the State in respect of beet sugar factories in the future and what he believes is the eventual future of the whole beet sugar industry. When I mention these amazing figures, it is only right to add that our Government, in making these grants to the Lippens' group, went no further than, if they went as far as, the British Government when they were trying to promote a similar industry in England. The subsidies paid in Great Britain during the same period as that in which the Carlow factory has been in existence, amounted to £27,000,000.

Mr. Moore

How many factories?

Mr. Dillon

I do not know how many factories were operating in England but, as a matter of fact, they got presents of the beet, too, and it seems from the experience that we have here in the Free State, taken with the experience in Great Britain, as though it is very doubtful whether beet sugar can be produced at all except on those hopelessly uneconomic lines. If the Government make up their mind in face of that to go on with the beet sugar industry, I want to submit to the Ministers that these are not industrial enterprises at all. They are gigantic relief schemes and, accordingly, the Minister for Finance himself should take into consideration the future location of these factories. They should be put in areas which stand in need of relief, and the small farmers in the congested areas should be given the advantage of having a factory which will take an unremunerative crop at an artificially economic price. That is the real purpose of these beet sugar factories. If they are going to go on as at present we must try to lighten the burden of their expenses, and the best way in which we can do that is to finance them out of relief grants. We will find that, if we put one factory, say, in Donegal, one in Mayo and one in West Kerry——

Mr. MacDermot

And Roscommon.

Mr. MacEntee

Yes, I was wondering why he overlooked Roscommon.

Mr. Dillon

I am sticking to the old congested areas. Put these factories down in the areas that used to be subject to the Congested Districts Board and let them function there as great continual relief schemes. Then they will be serving some useful purpose, but, to my mind, it is absolute folly to be pouring huge subsidies into the best sugar industry if the only function they serve is to divert tillage from some other crop into beet in the wealthier counties of this country. I quite see that the thing is arguable and undoubtedly the matter deserves protracted consideration and requires elaboration by the Minister for Agriculture. I think the Government would do well to accept the suggestion of Deputy Mulcahy to allow progress to be reported on this Estimate to-day and to have a comprehensive statement from the Minister, allow the House to take that into consideration and deal with the Estimate at an early and convenient date.

Mr. Minch

I thoroughly disagree with Deputy Dillon as to the beet sugar industry being a gigantic relief scheme. He might as well say the same of shipping and other things.

Mr. Dillon

How could you say so of shipping?

Mr. Minch

In view of the history of the Lippens' group, we quite understand that we must have Lippens technique here to go on, but what I should like to ask the Minister is what is the probable or potential capitalisation of this new company. That is a most important thing to know—whether it will be on a minor or a major scale. I suppose that, when the question is gone into from the locality point of view, the Minister for Agriculture will get more information, but I hope that the Irish Sugar Manufacturing Company in Carlow will not be the precedent on which the new sugar industry will be floated.

Mr. Corry

That was your child.

Mr. Minch

Deputy Corry interrupts, but I should like Deputy Corry to know that I probably know a good deal more about sugar manufacturing than he does.

Mr. Corry

I said that that factory was the child of your Party.

Mr. Minch

The Deputy should not interrupt. I do not interrupt him as a rule, probably because I can never understand what he is saying. At all events, what those of us who are interested in developing industry in the country are most anxious to have is an idea of the capitalisation. It is only on that basis that we shall know whether this is going to be of much assistance or not, and I am quite certain that, if public subscription is required for the sugar industry in this country, there will be no difficulty whatever in getting any amount of support.

Mr. Dillon

More power to their elbows.

Mr. Minch

Absolutely. It is not a gigantic relief scheme at all.

Mr. MacDermot

There is another aspect of the matter which has not been touched upon, and which rather interests me. What is going to be the result of all this on the price of sugar, and on what the poor of this country, particularly, will have to pay for their sugar. As I understand it, the ambition at the bottom of the whole scheme is that we should produce here in the Irish Free State all the sugar that is required for consumption here. I think that has been stated to be what we are aiming at: to make this country self-sufficient in the matter of sugar. If that is what we are aiming at, I think we ought to be quite clear about it, and have some idea as to what the results are going to be with regard to the price of sugar.

Now I know it is said that there is nothing which cannot be produced more cheaply somewhere than it can in Ireland, and that if cheapness of production was to be the sole test of what to produce we would produce nothing at all. It is true that it is desirable to produce a certain number of things in this country—perhaps a great many things in this country—that can be produced more cheaply somewhere else. But there are limits, and I wonder whether sugar is not a case in point. There are certain things that can be produced so very much more cheaply elsewhere, and under such ideal conditions elsewhere, that it hardly seems an economic proposition to produce them on any great scale here. I should have thought that wheat was one and sugar another. In this country, we can never hope to have such ideal conditions for sugar growing as, say, Cuba or Jamaica. We can never hope, I think, to grow it with such extraordinary cheapness as it can be grown in those countries. We have not got the climate or the kind of labour required to do anything of the kind. I think that on those general grounds, and also because we have seen both in England and here the terribly expensive experiment this has been hitherto that we should go into the matter very thoroughly indeed before deciding to embark on this enterprise of producing all our sugar requirements.

Minister for Agriculture (Mr. Ryan)

With regard to the capital required for the new company which it is proposed to set up, it will probably be somewhere between one and a half and two million pounds. That will depend on the number of factories. The number of factories which we think it is possible to erect for the 1934 crop will be three additional. It may be necessary, afterwards, to erect another. So far as we can make out, the maximum consumption of sugar in this country in any one year is about 100,000 tons. I think that figure of 100,000 tons was for an exceptional year, but the average would be something under that. The Carlow factory is capable of producing about 20,000 tons a year, so that if we erected three more factories of the same capacity as the Carlow factory we would have almost sufficient to produce our full requirements. With regard to the subsidy that would be necessary, Deputy MacDermot and Deputy Dillon are unanimously against this proposition.

Mr. MacDermot

I do not admit that I am against this proposition, but I would like to be sure that the thing was exhaustively discussed before we were committed to it.

General Mulcahy

We would like to hear something about it.

Mr. Dillon

But it is high treason to ask for information here.

Dr. Ryan

The subsidy, so far, paid to the Carlow factory, direct and indirect, would probably be somewhere about £400,000 a year. That represents the subsidy paid in cash and the benefit they get by way of customs duty on sugar. If the new factories are to be run on the same lines as the Carlow one, then Deputies may take it that the cost of the subsidy for each of them will be in or about £400,000 a year. That means that we would have to find, by way of subsidy, between one and a half and two million pounds a year if we were to proceed on the same lines as those adopted in the case of the Carlow factory. We feel that we could not find that sum out of public funds. In order to make the thing a bit easier on the State, there are three ways to meet the situation to enable us to fill the gap. The first is to cut down expenses. That can be done, and we believe that a considerable saving can be effected under that head. The second way is to increase the price of sugar, and thirdly, to reduce the price of beet. When this new company starts business, they will in all probability have recourse to all three methods. They will not depend on one alone to bridge this gap. It may be possible, by having resort to these three methods—by increasing the price of sugar very slightly, by reducing the price of beet very slightly and by making as big a saving as possible on the running of the factory—to cut out the subsidy altogether.

Mr. Dillon

What does the Minister mean by "slight" in relation to sugar and beet?

Dr. Ryan

I would consider an increase of 15 per cent. or less than 15 per cent. in the price of sugar slight.

Mr. Dillon

That would work out at about ½d. a lb.

Mr. Cosgrave

What is the present price of sugar?

Dr. Ryan

I believe that the present retail price of sugar is from 2½d. to 2¾d. per lb. There may, naturally, be some protests against reducing the price paid to the farmers for beet, but there will be a certain set off to meet that. For instance, if we have a larger number of factories, people, who at present have to travel a considerable distance to the Carlow factory, will be very much nearer to one of the proposed new factories and, therefore, the amount they pay in freight will be less. That is one advantage that the producer will reap from the setting up of the new factories. It is also proposed to return free to the growers of beet the offals—the molasses and pulp. If we take the full feeding value of molasses and pulp as proved not only by the Department of Agriculture in this country, but by experiments in other countries, it will be found, I think, that under what is proposed the price to the beet growers will be perhaps more than what they are getting at present, and that even by not making allowance for the value of the offals, the price will work out at much the same as it is at present.

Mr. Dillon

Did the Minister ever feed pigs on pulp?

Dr. Ryan

Yes.

Mr. Dillon

I did, too, and it killed ten.

Dr. Ryan

I think the Deputy did not feed them properly. He should not try experiments like that again.

Mr. Dillon

I can assure the Minister that I have no intention of doing so.

Dr. Ryan

Some Deputies said that it was rather unfair to ask that the Dáil should be committed to a sugar beet scheme without knowing fully what the scheme is. We have no intention of doing that. As the Minister for Finance explained in his opening statement, we are anxious to get the authority of the Dáil to make this advance to the company which is about to launch the scheme in order to enable them to go ahead. If it were three or four outside people who were acting as the promoters in a scheme like this, they could very well go to the banks and get a loan to meet the preliminary expenses by giving a guarantee that the bank would be repaid by the company when formed, but seeing that it is civil servants who are involved in this we thought it fairer to consult the Dáil before giving them authority to get an overdraft, or before making them an advance for the preliminary expenses.

As soon as the company is formed, of course, this amount will be repayable. It may be said that we are not committing the Dáil to the scheme at this stage. A Bill will be introduced which will give the Minister for Finance authority to take shares in the new company. At that stage, of course, the Minister will, I take it, be in a position to give more details than we have at present, because as time goes on naturally we shall be in a position to give fuller details of what is to be proposed in the prospectus. When the prospectus is issued, of course, it will be for the public as well as for members of the Dáil to come to their own conclusions whether the State will be justified in investing money in the new company or not. If we did not get authority from the Dáil to proceed in this way, we would be compelled, more or less, to enter into negotiations with some group of financiers, whether native or foreign, to put this thing through for us. We are very anxious to avoid the necessity of going to foreign capitalists at any rate. We are anxious, of course, to get, after the prospectus is issued, as much native capital as possible, but in case the native capital is not sufficient we shall come to the House again with a Bill to enable the Minister for Finance to make up whatever deficiency there may be in the capital. I do not know if any other question has been raised. I think that, as far as we are concerned, the only information that can be given at this stage is with regard to how the committee which is investigating this matter means to proceed with the business. I do not know if we can give any more precise details. We certainly cannot with regard to the exact amount of capital required or the exact price that can be paid for beet. As soon as the committee has examined the matter further, and have power to get in touch with suppliers of equipment and so on, they will then be in a position to draw up the prospectus and have the shares issued for public subscription.

General Mulcahy

Would the Minister say what the £15,000 will be spent on?

Mr. MacEntee

On stamp duty, registration fees, printing, the establishment of the company and establishment charges generally, the expenses of the promoters in investigating suitable equipment, and in negotiating possibly with existing interests for the purchase of their rights here and for journeys of inspection and investigation abroad. Generally that is the purpose of it. The main reason we are asking the Dáil to provide the money now is that the Government should be able to get itself free of all entanglements. We want to approach this matter as if we were an independent syndicate, anxious to secure the best possible equipment in regard to sugar beet factories and to devise the best possible scheme. The Dáil or the Government will not be further committed to an expenditure beyond this £15,000 until definite proposals are submitted to the House which will cover everything indicated by the Minister for Agriculture—the position and the site of the factory, the price to be paid for beet, the protection to be given to the native sugar and other matters touched upon by Deputy Dillon.

Mr. MacDermot

Will the Minister tell the Dáil later as to how the £15,000 has been actually spent?

Mr. MacEntee

That will have to be vouched for in detail and scrutinised by the Comptroller and Auditor-General. It will of course, I should say, be repaid. When the company is eventually established the amount will be repaid to the Exchequer out of the company's capital.

Mr. Dillon

It is only a loan then.

Mr. MacEntee

At the present moment it is an advance to enable schemes to be prepared.

General Mulcahy

Again I should like to comment very adversely on the way in which the matter is presented to us. Another way of looking at the matter is this, that there is a certain number of people appointed to inquire into this matter. They are going to get £15,000 and are going then to operate somewhat in the following manner. They will scratch their heads and say: "Let us look around and see how we are going to set up a beet industry, how we are going to get capital for it in the country, how we are going to get machinery and generally, after we have got machinery, how we are going to get a general scheme of management which will be located in the country."

Having got that far they are to enter into negotiations with the Government to see what kind of treatment they can get in the matter of a subsidy or assistance to bring the company into operation with a view to its being a complement to the present beet factory, and to its making the remainder of the quantity of sugar required in the country. As far as I could understand from the Minister that is the proposal. I should like to know if I have covered the matter properly, if, the Committee having gone through all that work, made their proposals and even sketched out an agreement with the Government here that would induce them to set up a business here, it can still be said we are uncommitted to anything except that we may have to say good-bye to the £15,000 that will have gone in expenses.

Mr. MacEntee

The Deputy has expressed himself correctly when he says we are committed to nothing but the £15,000.

General Mulcahy

I should like to ask the Minister, if I have expressed myself correctly in my last sentence, was I not near being correct also in the earlier part of my statement?

Mr. MacEntee

The Deputy was as far as possible from being correct. The position of the three gentlemen is this: that they know that the circumstances in this State are such that the sugar beet industry can be established on a successful basis. They represent other parties with considerable resources who are prepared to sink these resources in the establishment of the industry provided a sound business-like proposition is put up to them. The three gentlemen are provided with £15,000 to enable them to put up a sound business proposition to their principal. They enter into these investigations charged with nothing else than this—to put up a scheme on sound economic lines, the soundest that can be devised. In order to do that they are also told that they must take steps to provide as far as possible the finances of the scheme otherwise than through their principal, confining the financing of it, however, within the area in which the factories are to operate. The formation of the company will necessarily involve them in certain expenditure which will be in the nature of transferring from one pocket of their principal into another pocket of their principal say, £5,000. It will also involve them, not so much in negotiations but in investigations into plants abroad, into the examination of various classes of technical machinery and equipment and the negotiation possibly of provisional agreements with certain people of technical qualifications, and a general examination as to the position in which the factories should be placed and factors which would determine the location of the factories.

None of this work has been provided for in any estimate which has been submitted to, and adopted by the House. Accordingly, in order to enable that work to be carried out by the three gentlemen—who happen to be public servants—who are undertaking the task on behalf of the Government, it is necessary that definite authority should be given for the expenditure of money upon these matters. That expenditure, upon preliminary investigation, does not commit the Dáil, or the Government to any proposals which may be, shall I say in petitio, at the moment. It may be in being, but it enables the Government to make up their mind on these proposals and to submit them to the House, and will involve the Government coming to the House at a later date and saying: “We have spent £15,000. We find it is not practicable to proceed with the scheme, and we do not intend to do so,” or it may say: “We have made more detailed investigations which, we are satisfied, were necessary, and we have made preliminary arrangements to launch the company, because time is pressing.” If we want to have the scheme in operation in 1934, it is essential that preliminary arrangements for financing the scheme should be made at this autumn at the very latest. Our representatives have commissioned people to prepare plans and specifications for the factory. They are ready now to issue the specifications and to secure tenders, being satisfied, after due investigation, that the plans and the equipment will be delivered in time to enable the factory to open in the autumn of 1934. Accordingly we propose that the Minister for Finance should be given authority to subscribe the necessary capital for the company, and that the Government should be given authority to impose, in certain circumstances, an additional duty on imported sugar, and that, generally, the scheme should be put into operation.

General Mulcahy

What does the Minister mean by three civil servants representing other parties?

Mr. MacEntee

Surely the Deputy misunderstood me.

General Mulcahy

I understood the Minister to say that these civil servants represented other parties as well.

Mr. MacEntee

I started with the same simile as the Deputy used, three individuals scratching their heads. Civil servants have not time to do that.

General Mulcahy

They have good reason for doing it.

Mr. MacEntee

I started by saying that three individuals represented certain principals, and at the end I pointed out that the principals in this matter are the Government, and that the three people happen to be civil servants. The three individuals in this matter represent no other interest but the Government and the people of the Free State.

Mr. Minch

When the Minister for Agriculture was making his statement he stated that the Minister for Finance would have an interest in this new factory, or factories, and that in the event of an appeal being made to the public for subscriptions, of which there might be a shortage, the Minister would take it up. When I asked about capitalisation at the beginning I did not think it would be so big. Here is what rather perturbs me. Will the Minister for Finance have control if he is going to be a permanent shareholder, or to have a permanent interest in the factory? In other words, will it be a State controlled institution?

Dr. Ryan

If he has a majority of the shares, of course, it will. It does not follow that the Minister will have a majority.

Mr. Dillon

I am glad to notice that Deputy Minch is beginning to scratch his head. He was rearing for an opportunity of investing his money ten minutes ago. Before we are done a lot of people will be scratching their heads——

Mr. Minch

I am not scratching my head at all.

Mr. Dillon

——about the amount of money. Observe the blessings that this scheme will confer on us. We are going to reduce expenditure in the administration of the factory, although we are credibly informed otherwise by one of the greatest authorities in the manufacture of beet sugar, one of the heads controlling the Carlow factory, still we in Dáil Eireann are going to give Messrs. Lippens a demonstration of how it is to be done. We are going to reduce expenditure on the manufacture of sugar and our next performance is that we are going to reduce the cost of beet. The Minister for Agriculture will remember that when he was on the opposite benches he became ecstatic when the price was reduced from 42/- to 39/-.

Dr. Ryan

And I was right.

Mr. Dillon

The price having been reduced from 42/- to 39/-, the Minister, in order to have three factories, is going to take another wipe off it. The Carlow growers went on strike when 3/- was taken off. If the crop was not economic when 3/- was taken off, what will be the position by the time that we have made another slight reduction? Deputies will remember that when the Minister for Finance first took office one of his first actions was to reduce the duty on sugar. He stated that he did so in the name of humanity. He transferred that duty to tea, because sugar, he said, was such a vital necessity to the growing children of poor people. Now we are informed by the Minister for Agriculture that he is going to increase the price of sugar, and that the Minister for Finance is going to increase the duty on sugar. That is going to take the fat out of this proposal. The Minister for Finance did not tell us what the increased duty is going to be. How much duty did the Minister take off sugar?

Mr. MacEntee

£450,000.

Mr. Dillon

How much per cwt.?

Mr. MacEntee

4/8.

Mr. Dillon

The Minister for Agriculture has just announced that he is going to put it on again.

Dr. Ryan

No. That is a matter for the Dáil.

Mr. Dillon

The Minister stated that he would put on ½d. in the lb., that is 4/8 a cwt.

Mr. MacEntee

The Deputy might not be right in assuming that there will be an increase in the sugar duty.

Mr. Dillon

The Minister stated that he thought there would be. In any case, the Minister for Agriculture stated—whether we increase the duty or not—that he is going to increase the price of sugar to consumers by ½d. per lb. or 4/8 per cwt., which is the amount the Minister for Finance took off. The blessing we are to get from the scheme is that we are going to reduce the price of beet, but to increase the price of sugar, and we are going to show Messrs. Lippens how it ought to be done. Is not that a very attractive programme? That is what we are facing now. The Minister says that the £15,000 commits us to nothing. Surely it commits us to an expression of opinion. I certainly think he ought not proceed without further investigation, and without clearly informing the House what the liabilities are going to be. The Minister says that as yet he does not know what they will be.

Mr. Cosgrave

The Minister for Agriculture stated, as Deputy Dillon has pointed out, that there were three methods in which it was proposed to meet portion of the expenses in connection with the extension of the sugar beet industry. One of them was concerned with the elimination of costs. This was, to some extent, dealt with by Deputy Dillon. The Minister may, perhaps, say that it is proposed to pay a lesser dividend in the future. The capital of the sugar beet factory is, approximately, £400,000. I am speaking from recollection as to the figure. The site of the factory was admirably suited to the purpose. It was, strangely enough, selected by the people concerned without representations from any source save, perhaps, from the people of Carlow. It was not selected owing to representations made, at any time, by me during the time I represented that constituency. (Interruption). If the Minister would speak up we would hear him. He ought not to be ashamed of anything he has to say. The site was selected by people who knew their business. It had many things to recommend it. In the first place, it was in an area in which beet could be satisfactorily grown. In the second place, it was in a district in which lime, which is essential for the manufacture of the sugar beet, was easily available. In the third place, it was beside a river, which is essential to the working of the factory. If one had time to waste in reading the speeches of Ministers to deputations, it would appear that political influence may be exerted in respect of the establishment of these factories. If that be so and if the sites of the factories lack those things available in the case of the Carlow site, then there will be no money saved in administration costs or in the running of the factories. The running of the factories will be much more expensive. The suggestion that money is to be put into the undertaking by the State lends some colour to the suggestion that Ministerial influence may be exercised in the selection of sites.

What is the sum proposed to be saved in the administrative or running costs of these factories? There is no factory in the whole world better run than the factory in Carlow. Are we to run the three new factories better than that factory is run? If so, are we learning from those people as to how we should run these factories? Is there anybody in this country who knows how to run a beet factory? Is there anybody in this country who knows how to lay out the plans or to fix up the machinery? If there is, I have never heard of him and I should be glad to hear of him. We may discount any possible saving in that connection, with this exception— that the cost of the machinery may have decreased since the inauguration of the factory at Carlow. We may save money in that way. There may be also the possibility of a cheaper site but, even there, the promoters of the Carlow factory were singularly fortunate in discovering a site with much more sand than was required for the construction of the factory. We may dismiss any possible saving as regards capital, having regard to the standing of the persons associated with the running of the Carlow factory. Deputy Dillon has mentioned the name of the chairman, Sir Maurice Lippens. He had associated with him several other persons, each of whom had experience of sugar manufacture. All of them were anxious, having regard to the special circumstances on the Continent at the time, to get the last penny of value for their money. So far as I recollect, British currency, at the time the factory was established, was against the Continentals. That is in favour of the present proposal. Continental money has a better value now and only in that direction can there be an advantage.

The costs in connection with the establishment of the factory are not the main costs. After all, if the new factory were to be satisfied with 7½ per cent. Per annum, and the cost of putting up the factory were £100,000 less, that represents a saving of £7,500. Let us double it in order to give more colour to the suggestion thrown out by the Minister for Finance, and we have £15,000. The next question that arises is the price of the beet. I suppose we may take it that there is an average of ten tons of beet to the acre. About 17,000 acres were planted. That gives us 170,000 tons of beet. What is the reduction that is to take place in the price of beet to meet the economy of the new proposal? There was a very considerable objection on the part of beet growers to a reduction in the price during the last few years. There was a natural reluctance to accept a lower price. From the figures I have had presented to me, the average profit for the last five years is much the same, although the costs incidental to the production of the beet increased very considerably. They increased from £15 16s. 10d. in the first year—1927—to £19 9s. 0d. for 1932, although the profits were practically the same. Let us, for the sake of argument, assume that the Ministry will not allow too large a reduction in the price—that they take off 2/- per ton of beet. We get from the 170,000 tons £17,000. Add that to the £15,000 I have already mentioned, and we have £32,000 saved. Now, assistance is to come from a third source—an increase in the price of sugar. The Minister committed himself to a figure of 15 per cent. Fifteen per cent. would be sufficient to provide money for the factory right away. It is almost equivalent to ½d. in the lb. That would produce £400,000. My recollection is that the whole cost of the Carlow factory over ten years was £2,000,000.

Mr. Dillon

£1,941,000.

Mr. Cosgrave

So that, from the 15 per cent. we have a sum far in excess of what is required. If there is going to be an increase in the price of sugar, 7½ per cent. would probably give the figure required. So far, we have 32,000 mythical pounds saved and, deducting that from the sum required, we find that there is still required, approximately £160,000. That does not necessitate a 15 per cent. tax on sugar. Then we get back to the position that we are saving £32,000, if so much, on the whole transaction. That is on a factory of the same size as Carlow, assuming a site close by a river, with limestone and sand in the immediate district.

The present scheme was a good, sound scheme but, like practically all sugar beet experiments both in England and on the Continent, these schemes are expensive. If we are to have three more factories, we have to make up our minds whether we are going to put up for this purpose approximately three times the sum involved in this case, allowing for a saving of £32,000 or £33,000 in the case of each factory. It would be a very good thing if we had established in this country the manufacture of a sufficient quantity of sugar to suit our people. It can be secured for the country if we are prepared to pay for it.

Mr. Dillon

Hear, hear!

Mr. Cosgrave

There is no short cut to get a sugar factory under any other conditions. It must be remembered that in addition to paying for it we are also invited to consider the lowering of the prices for beet as announced by the Minister. It may be that in the new districts which the Minister has in mind the soil will not be so suitable or that it will not be more suitable than the site of the Carlow factory. I think we would be entitled to see set out in black and white, in the form of a tabular statement, some information as to what the ultimate costs would be on being asked to provide this £15,000. The Minister will, I am sure, admit that it is due to the Dáil that information of that sort should be furnished to it before we are asked to spend so much money in what the Minister calls these difficult and anxious times for the farmers, labourers and shopkeepers.

Mr. Corry

I should like to say a few words about this before the Vote is put. I am sure that the scheme got very careful consideration from the Executive Council before it was brought forward here. If we are to have it on the same lines as the Carlow factory I do not think it is going to be a very paying proposition. We want at any rate to see that the farmer gets his cost of production in the first place. We want to secure that. We do not want firms coming in here and guaranteed subsidies for a number of years while the farmer himself is guaranteed the price for only a short period as was the case in the Carlow factory. Deputy Cosgrave told us very kindly about the Carlow site. I hope that these sites are not to be used like the Carlow site to sweeten any particular constituency for any President or Minister. When the proposition of starting a beet factory in the Free State was on before, it was decided, and Deputy Cosgrave knows it, that the factory was to be in East Cork in my constituency at Buttevant. Deputy Cosgrave knows that.

Mr. Cosgrave

I know nothing whatever about it.

Mr. Corry

We have limestone and lime is available there. We have lots of water and we could spare some of it if you want it. We had everything that was necessary for a sugar factory; but low and behold! overnight it was decided to sweeten the Carlow constituency. I hope that will not happen again.

Mr. Cosgrave

Now we know it.

Mr. Corry

I have that much trust in our present Executive Council and I know that their constituencies do not want any particular sweetening.

Mr. Cosgrave

I thought that was behind it.

Mr. Corry

I hope the merits of the place will be taken into first consideration this time. That, unfortunately, was not the case last time. Considering it from every standpoint, if we are to have £400,000 subsidy, as in the case of the Carlow factory, and if we are to consider that the amount of sugar imported into this country last year amounted only to £1,000,000, we want to know, from these facts, where we are to get the subsidy and where it is to come from in order to make £1,000,000 worth of sugar? That is a matter that requires very careful consideration. I would like to say that the first thing that has to be taken into consideration is that the farmer will get at least the cost of production for his article. He did not get his cost of production in the case of the Carlow Sugar Factory. The farmer is entitled in whatever bargain is made here with foreign firms to the first consideration. The first consideration is for our own people. When bargains are made and subsidies made to foreigners, the first thing to be taken into consideration must be that the farmers producing beet will get their cost of production.

Dr. Ryan

With regard to the selection of the sites, this committee will recommend, I take it, the sites to be examined by the technical advisers who may come along from the management of these factories. The Department of Agriculture will be there to advise on what are potential beet-growing areas. The Department of Industry and Commerce will be there to give its views, but in the long run it is the technical advisers at the disposal of the company who will select the sites. There is no Minister or President or anybody else in this Government anyway who will have any control over the selection of the sites.

With regard to the question raised by Deputy Cosgrave as to the savings that can be made, I do not deny at all that the Carlow factory is run on very efficient lines. I do not know that the technical advisers that the new people will have will be able to improve on it. But at any rate machinery is cheaper now and there will be savings in that direction. There may be savings also in the amount to be paid in dividends and in the difference in the reserve.

Mr. Cosgrave

Has the Minister estimated what that will be?

Dr. Ryan

No, I have not, but the committee who are examining this gave us their opinion on what will be required. That is certainly a saving in the running of the factories. With a small increase in the price of sugar and a small decrease in the price of beet the thing can be done without any subsidy at all. If we were to give subsidies on the Carlow lines they would amount to about £2,000,000, so that the £2,000,000 must be made up somewhere else, and where Deputy Cosgrave admits——

Mr. Cosgrave

How does the Minister submit that there is to be no subsidy if the price of sugar is to be increased?

Dr. Ryan

There is to be no direct cash subsidy.

Mr. Cosgrave

How is the Minister to get money if there is to be no cash subsidy? How is he to get the money in?

Dr. Ryan

I do not understand the Deputy.

Mr. Fitzgerald

The Minister said there would be a small increase in the price of the sugar. That means that there will be a tariff excluding foreign sugar?

Dr. Ryan

Yes.

Mr. Fitzgerald

And I presume also that the Minister means that the imported article will be paying a higher duty to the State than the sugar manufactured at home. A higher duty will be paid on the imported sugar. That means that instead of paying money out of the Exchequer it was a matter of the Carlow factory being exempted from the paying of duty. The fact is, as in Carlow, the sugar will be subsidised by the Irish people and it is immaterial whether the Government pay a subsidy to the factory or charge a lesser duty.

Dr. Ryan

It may be the same thing. Deputy Cosgrave said that ½d. per lb. would amount to between £400,000 and £600,000. That would be as much as was paid under the old system to one factory. But then we propose to run four factories on this system of increasing the price by ½d. per lb. So that it is certainly doing the thing in a cheaper way. We could, if we like, leave the sugar as it is and pay a subsidy of £460,000, pay it as a direct subsidy, and it would have the same effect. That is going to be the total cost.

Mr. Fitzgerald

The Minister puts ½d. per lb. on sugar, and that amounts to £460,000 in the case of the Carlow factory. That is what it produces. Now, if one factory produces that amount, what would be the cost in the case of the three factories?

Dr. Ryan

That would be our total subsidy.

Mr. Fitzgerald

You have three factories producing each what the Carlow factory produces. It is a matter of ½d. per lb. in the sugar, and it does not matter whether it is on one factory or spread over the three.

Dr. Ryan

I am afraid the Deputy does not understand it. We can leave the sugar at the present price. Suppose we leave the sugar at the present price and give a direct cash subsidy of £460,000, that would be sufficient.

Mr. Cosgrave

For the four factories?

Dr. Ryan

Yes, for the four factories; if we were to do it on the Carlow system it would cost 1½ million pounds. There is a very big difference there.

Mr. Fitzgerald

The four factories would produce four times as much as Carlow does?

Dr. Ryan

Yes. I was reminded also by Deputy Dillon that some years ago I complained of the price of beet to the farmers. I did complain about it, but the complaint I made, and in which I was joined by the beet growers themselves, was not that the price was too low for them to grow beet, but that they were not getting their fair share out of the factory in view of what the factory was getting in the way of subsidies.

Mr. Cosgrave

Could the Minister say what sum of money was paid in dividends in one year by the Carlow factory, what the subsidy was, and who got the difference between the dividends paid and the subsidy provided?

Dr. Ryan

I think the dividend was 20 per cent., as far as I remember—or 15 per cent.

Mr. Cosgrave

For how many years was that dividend paid?

Dr. Ryan

The dividend was 15 per cent. free of income tax, which is practically 20 per cent. That dividend was paid with the exception of one year.

Mr. Cosgrave

That is not my recollection, but the Minister may be right. However, assuming that the Minister is right, 15 per cent. would be £60,000. The subsidy was £200,000, so somebody must have got £140,000. The subsidy was approximately £200,000.

Dr. Ryan

Direct subsidy only.

Mr. Cosgrave

Somebody must have got the difference between the £60,000 and the £200,000.

Mr. Minch

Will the dividend be controlled in the new factory?

Dr. Ryan

I could not answer that at the moment, but I do not think so.

Mr. Cosgrave

Does the Minister see my point? The Minister made a case here in the Dáil a couple of years ago that there was a big subsidy being given by the Dáil, and that the beet growers did not get it, but that the factory got it. According to his own statement, 15 per cent. is the amount of the dividend. The dividends then would amount to £60,000. Somebody got £140,000. Who got it?

Dr. Ryan

There were reserves and all sorts of things.

Mr. Cosgrave

Well, let us have all the reserves and all the "all sorts of things."

Mr. Dillon

The Minister's calculation of an increase of a halfpenny in the lb. is that it is only going to extract £400,000 from the public. I think that is incorrect because the Minister for Finance said, when he took off the halfpenny, that it meant a sacrifice of £400,000. Carlow produces 20 per cent. of our total production. I suggest it would mean another £100,000.

Dr. Ryan

Carlow was included that time.

Mr. Cosgrave

There was a special clause in the Finance Bill which left them liable for that half million.

Mr. Dillon

When the Bill of 1932 was introduced Carlow was exempted?

Dr. Ryan

Carlow had been paying excise duty that year.

Mr. Cosgrave

Yes. Is the Minister able to give us any information as to the dividends?

Dr. Ryan

The dividend payment was 15 per cent. with the exception of the year 1926-27 and the last two years when the payment was 10 per cent. It was 15 per cent. for three years.

Mr. Cosgrave

It was 15 per cent. for three years and 10 per cent. for the other three years?

Dr. Ryan

Yes.

Mr. Cosgrave

15 per cent. is £60,000. Where did the balance of £140,000 go?

Dr. Ryan

I would have to get notice of that question.

Mr. Cosgrave

May I suggest where it went? It must have gone in the price of the beet.

Dr. Ryan

I do not think so.

Mr. Cosgrave

Well, it was not lost.

Mr. Corry

Was the farmer guaranteed a profit of 15 per cent. in the same years on the beet he grew?

Mr. Cosgrave

I did not hear what that intelligent observation was.

General Mulcahy

Would the Minister move to report progress and let us take up this Estimate next week. The proposal is an entirely unprecedented one and has been put before us in a way that is also unprecedented. It was only as the discussion went on that we got any idea of how deeply the matter had been gone into, and in view of the fact that it has been gone into so deeply I think we might have a more systematic and detailed presentation of the case to the House than we have had. I ask the Minister to move to report progress and allow himself and ourselves more time to discuss this matter before the Estimate is passed.

Minister for Finance (Mr. MacEntee)

I have explained to the House already that the House would have the fullest opportunity of discussing our definitive proposals in the form of a Bill, and I would suggest to the Deputy that there is not much to be gained by holding up this Estimate for further discussion. The matter is urgent. If the extension is to take place and the new factories are to be put in operation in the autumn of next year a good deal of preliminary work will have to be done —preliminary work which is of a provisional character and which has not been actually and finally delimited and defined. If we are to be held up at this stage it means that we lose a year inevitably. I do not think that it is the feeling of the House that we should abandon the idea of going ahead with the development of the beet sugar industry in this country in the next year?

General Mulcahy

Surely, asking the Minister to postpone, until next week, the discussion of a matter that was only put before us within the last day or two, does not suggest that it is an attempt in any way to postpone any development of the beet sugar industry that ought to take place in this country in the next year?

Mr. Cosgrave

There is a note to the Estimate which says: "Legislation will be introduced at an early date to give effect to the Government's proposals for the extension of the beet sugar industry." I am quite prepared to admit that this sum of £15,000 is experimental but the note is far from being experimental. According to the note we are committed to the acceptance of the Government's proposals.

Mr. MacEntee

That note only means that if there are definite proposals for the extension of the beet sugar factory, they must be submitted to the House. It means that the Government will be bound to announce its intentions as to whether it is going ahead with these proposals and, if so, to produce them in the form of a Bill, or else to announce that it is going to abandon the proposals. I suggest that that is the true reading of the note.

Mr. Dillon

If the Minister states definitely that a week's delay is going to force him to abandon the whole thing for 12 months, then I think we ought to give him the Estimate, but I find it difficult to see how that would happen. An opportunity should be taken at a very early date to discuss this whole question fully, and with a full and comprehensive statement from the Minister for Agriculture. If we give him this Supplementary Estimate to-day, let it be in no sense taken that we think the Government should go on with the scheme.

General Mulcahy

I should like to suggest to the Minister that I am trying to help him in this matter. From the development of this discussion here, and the flow of information in dribs and drabs, disclosing very full examination and consideration, and to my mind a very full determination already crystallised on the part of the Executive Council to proceed with the development of the beet industry, I am afraid the Minister may find himself in the autumn coming before us with very definite commitments already entered into, and in this way putting himself in the position of being charged with bad faith in his handling of the case here. Certainly I cannot conceive in any way how a postponement of the debate for another week could have any ill effects.

Mr. Dillon

Neither can I.

General Mulcahy

I am sure the Minister will not press that point.

Mr. Cosgrave

May I point out that when I asked what the sum was in connection with this industry last week, or whenever it was before the House, I was told it was £15,000. At the time in all good faith I came to the conclusion that that £15,000 was required this year for the Carlow sugar factory. I got at that time no information whatever as to the new proposal. I have read out already one note. What is the other?

"Advance to meet the preliminary expenses of floating a Public Company, under the Companies Acts, 1908 to 1924, for the erection, acquisition and operation of sugar factories, and to meet all necessary expenses incurred by the promoters in connection with the extension of the beet sugar industry."

"For the erection, acquisition and operation of sugar factories"—there is very much more in that Estimate as it stands than the mere experimental expenses of £15,000. There is very much more involved in that actual wording of the Estimate. Surely the House is entitled before it spends £15,000—although £5,000 of that may simply mean a transfer—to get in black and white the Government's present proposals in regard to it. This is what the Government's estimate of the cost of this industry is going to be. I am sure there are Deputies in the House who must have been astonished this afternoon when they heard that, in addition to all that is there, the Minister proposes to invest a considerable amount of capital in this industry. There are certain industries in which I would recommend and strongly advocate the sinking of Irish capital, but they are confined to those in which our citizens know something about the business. I would much prefer, personally speaking, to see a considerable amount of foreign capital in a business of that sort in which you are dependent upon foreign advice, technical and otherwise. We do not know that business; we have no technical experts here, and are not likely to have them for a good many years. In consequence, if people are going to invest in that business here, I should like to see a considerable amount of foreign capital invested in it. It is not the same as a boot factory, a brewery or a railroad. It is a business on which we have no technical advice here.

Mr. MacEntee

I think that no good purpose would be served by postponing this Estimate for any period. If we were to postpone it the only implication would be that the matter having been fully considered, all Parties in the House would be very much more committed to the Government's proposal than they are by the acceptance of this Estimate in the form in which I have submitted it to the House to-day, merely as being the essential which would confer upon us the authority to go forward with the further investigation and examination of our ideas in this matter. I think Deputy Cosgrave intimated that when the first beet sugar factory was established here this was the line his Government took. They negotiated, and then came to the House with their proposals. We do not want to approach anybody and be under an obligation to any person— an obligation which would possibly involve us in honourable commitments, as apart altogether from legal commitments. We do not want to be under any obligation to any interest in this country or outside this country. We feel that we can do just as well without having any entanglements of any sort, until we are definitely in a position to formulate our proposals and put them to the Dáil.

Mr. Cosgrave

Does the Minister not think that by putting £15,000 into it he is being entangled in it?

Mr. MacEntee

We are not entangled with any other interest than our own interest.

Mr. Cosgrave

Are you going to do this exclusively by yourself?

Mr. MacEntee

That is not clear yet. At any rate our people will be free to investigate and free to come away, having made investigations, without being under any obligation, either of gratitude or otherwise, to any person for assistance in the investigation which they are now undertaking. We propose to pay for any information we may get in the form of technical assistance or technical advice. I think that that was possibly the plan which was followed on the previous occasion, but at any rate it is the plan we propose to adopt now. Whatever advice we get we will pay for it in cash, and have done with it. Deputy Mulcahy knows the position of the Parliamentary programme. He knows that there is a desire that the House should rise if possible early in July——

Mr. Dillon

Hear, hear!

Mr. Cosgrave

Early in July?

Mr. MacEntee

If possible.

Mr. Cosgrave

We shall find it very difficult to tear ourselves away from here.

Mr. MacEntee

That will only be possible, having given a considerable amount of Parliamentary time to the discussion of this Estimate, if we have finished and done with it now. If we postpone it we will have another day taken up with it. It simply means that, as the Government programme has to go through, the anticipations of an early adjournment will not be fulfilled and—which is much more important—very valuable time will meanwhile have been lost. For that reason I think there is no anxiety on the part of any section in the House to hold up this project unduly. The House will be able, when definitive proposals come before it, to form its own judgment, and it will be perfectly free to vote either way. In view of that I think the Estimate should be allowed to go through to-day.

General Mulcahy

There are two points which I wish to raise. I refute absolutely the suggestion that any of my colleagues, when they were on the Front Bench, put their proposal in the way in which the Minister for Finance has put his proposal to-day. As far as delaying the Minister and holding up the business is concerned, we had one of the Deputies here complaining to-day that he got through what he called some dust track legislation——

Mr. Minch

Dirt track.

General Mulcahy

I was assisting the Minister so much in getting through his business. I am not going to press the Minister to the point of moving to report progress myself, but I do again ask him in his own interests to move to report progress. If he does not let it be on his own head.

Mr. Minch

According to the Minister for Agriculture, the dried and wet pulp will go back free to the farmers.

Dr. Ryan

That is right.

Mr. Minch

That being so, I would like very much, when these proposals are being further developed, if we were informed how that will affect the admixture scheme.

Mr. Cosgrave

Will that not mean a cost on the scheme of £5,000 or £7,000 a year in order to send back the pulp? Will that not involve £5,000 or £7,000 which the factory is at present making out of the sale of pulp?

Dr. Ryan

The factory is making that out of it, it is true.

Mr. Dillon

I do not know if there is a molasses residue arising out of beet sugar manufacturing process. I do not know if there is any molasses residue as a result of the refining process.

Dr. Ryan

There is.

Mr. Dillon

The market for molasses during the last 18 months has practically collapsed. Two years ago it must have been a valuable asset. If the market ever rises again it will, of course, be again a very valuable asset. I agree with Deputy Mulcahy that it is manifest we do not know enough in relation to what this business is going to involve us in. The Minister for Finance said that to withhold this Estimate would mean holding him up for the whole year. I think, in the circumstances, we ought to give it to him, but that is the only reason why we should give him the Estimate now.

Vote 71 put and agreed to.

Supplementary Estimates reported.