When the Prices Stabilisation Act was going through the Dáil last year, in reply to a question from Deputy Roddy, I said that we had intended to draw up a special scheme for Sligo. At that time we included certain creameries in a scheduled list in order to give them special treatment. Unfortunately the creameries in Sligo, which Deputy Roddy had in mind, did not come under that schedule, or did not comply with the rules of the schedule, so that they were left out. I promised to deal with Sligo in a special way. In August, since the Bill had gone through, I asked the officers of the Department of Agriculture to survey Sligo and see what could be done to save certain creameries there. They did so, and I have a report here which is dated for some time in September. I find from that report that the position at that time was that there were 11 societies in Sligo. Ten of these were central creameries and there was one independent auxiliary. Of the central creameries, some had auxiliaries. One of them had four, two of them had two, and seven had one each.
Sligo County, although a large county geographically, was not capable of maintaining so many independent societies. For instance, on making an analysis of those societies we found that there were only two of the whole 11 which could be classed as financially sound, in a good way to carry on and give an economic price to the suppliers. There were five others which were not embarrassed financially but which were so small that they were unable to pay an economic price. The overhead charges would be so heavy that the price would be small. That accounts for seven out of the 11. Of the remainder, there was one in a rather doubtful position and we found it difficult to get a really exact estimate of how it stood; two were certainly drifting towards insolvency and one was definitely insolvent. We had to consider the method of approach.
In the southern areas, as Deputies and everybody else are aware, there was a very big scheme of reorganisation inaugurated about 1927. That reorganisation was launched in order to deal with a situation where proprietary creameries were competing against co-operatives and beating the co-operatives. We could not treat Sligo in that way because it was not a question of proprietaries competing against co-operatives but rather it was a case of co-operatives competing against one another or trying to carry on against adverse circumstances. We had another scheme of reorganisation which took place in Clare. That was a new district entirely for creameries. The Dairy Disposals Board went in there and took over one existing creamery and built a large number of auxiliaries which were attached to the central in order to put it on a good paying basis. The intention, of course, as soon as that particular society is working well, is to hand it back to the suppliers as a co-operative concern. I should mention also that in order to do that the Minister at the time had to come before the Dáil and get a special Estimate passed to deal with the situation, because it was not contemplated in the original scheme of reorganisation. Sligo did not fit in with that either. It was really a case of trying to reorganise a number of co-operative societies.
We came to the conclusion in the Department that it was really a case for the co-operative movement itself to deal with. We asked the I.A.O.S. to come in and deal with the matter. They of course can only deal with it through some system of voluntary reorganisation. In consultation with the officials of my Department a scheme was drawn up which we regarded as an ideal scheme if it could be got through. There were difficulties naturally in the way. Our intention was, I might say, to try to amalgamate these 11 societies into four strong societies. In the first place, if a society is itself solvent or has perhaps a slight surplus, it is not in a position to take over an insolvent society and pay the liabilities of the society which it takes over because that would be unfair to the members of the original society. That was the first difficulty. The second difficulty was that when reorganisation would take place, the central society which was taking over another society, might have to go in for increased buildings and purchase larger equipment in order to deal with the increased supplies. That would also require finances. In the third place the buildings of the society taken over and the equipment there might have to be renewed also. In order to meet that it was stated definitely in the Department to the I.A.O.S., that I was quite prepared to ask for a sum of money from public funds to meet the deficiencies that might arise in the reorganisation as soon as that reorganisation would be agreed to. I would have to come before the Dáil for a supplementary estimate for that purpose.
The I.A.O.S. sent representatives to Sligo and the Department of Agriculture sent inspectors also to Sligo on many occasions to try to get some sort of agreement to a scheme such as we had outlined but we got very little encouragement from the societies in Sligo. With one exception no society was willing to sink its identity. Where it was proposed, say, to amalgamate three societies, each one of the three wanted to be the parent or the surviving society if you like. The result was that none of them was prepared to sink its identity either in name or as to the central station so that we could not get anywhere with our scheme. There was as I say one exception. Deputy Carty has put it to me whether we are prepared to allow this thing to proceed or whether we intend using some sort of pressure or compulsion to get the societies to agree. Of course we have no power to do that. We have no power to compel agreement in a case such as this.
In order to get the big reorganisation scheme carried out for the southern counties in which about half a million pounds was spent in buying proprietary and even co-operative creameries there was no compulsion used. That was all carried out by agreement. Unless we get voluntary agreement we cannot, under our present powers, do anything. Deputies who come from the country will understand that each parish or town is very jealous about keeping a creamery or whatever else it may have. Those concerned are not inclined, as a rule, to become an auxiliary to another town or parish. Looking at this from the ordinary commercial and economic point of view, it is difficult to understand why agreement could not be got. If you had agreement, and if there was a reorganisation, naturally the price for milk would be better. Seeing that the suppliers of the milk are themselves, some of them at any rate, those who compose the managing committees of the creameries, it is very difficult to understand why agreement could not be got. In addition, if agreement took place no inconvenience would be caused to the farmers, because they would still be supplying their milk to the same station.
I may say there was a suggestion that two of the auxiliaries might be closed. No objection was taken on that point. If there had been it could have been considered, and perhaps without difficulty be got over. The real objection was taken on the point as to which should be the central creamery and which the auxiliary. Reorganisation would bring another very big advantage to the suppliers in so far as the risk of failure would be entirely removed. The result, at any rate, was that we got no agreement except from the one society referred to by Deputy Roddy. I certainly have very great sympathy for a society such as Collooney—I do not mind mentioning it as it has already been mentioned by Deputy Roddy. In a case like that where a creamery closes down, the guarantors are called upon to pay. In all such cases the guarantors are in almost all cases the most public-spirited men in a district.
Deputies know well that when a co-operative society is being organised you always get four or five or perhaps a dozen men—usually they are the outstanding people in the district—who are prepared to risk something for their fellowmen. They come together and sign a bill in a bank and it is these men who suffer when the crash comes. It is really very hard that something cannot be done for them. On the other hand, of course, when men go in and sign a guarantee in a bank for an advance of money for a co-operative society that must always be looked upon as a commercial transaction. I do not think I would be justified either in going to the Minister for Finance, in the first instance, and to the Dáil in the second instance for money to relieve these guarantors of their liabilities. If, however, there was a general scheme of reorganisation where I could claim that the whole of the County Sligo was going to be benefited: if I could claim, say, that in order to reorganise the whole creamery industry in the County Sligo, to put it on a firm footing so as to avoid the risk of failure in the future and get a better price for the farmers for their milk—if in order to get a scheme like that going it was necessary to come to the rescue of Collooney, then I think in that case I would be justified in going to the Minister for Finance and to the Dáil. But in this case where we can get agreement nowhere and where the only thing that could be done in the end would be to come to the rescue of the Collooney Society alone and relieve the guarantors there of their liability, I think, as I have said already, I would hardly be justified in going to the Minister for Finance and the Dáil. I do not think that I could possibly defend such a procedure in the Dáil particularly if the proposal were objected to by one single member.
I may say, however, that the reorganisation scheme is by no means dead. The I.A.O.S. are still very keen on doing something. They are still willing to reorganise, if they can get any one of the 11 societies to agree to some sort of scheme. I may say also that the Department of Agriculture is still willing to come to the rescue by way of finance. I would like to assure Deputy Roddy, in conclusion, that as regards our original scheme to which I have referred—it is the one we would consider the ideal scheme although perhaps it was a comprehensive one—that we are not necessarily going to stand on that or nothing. Even if we could get half our scheme I think we would be satisfied with that for the present, hoping at the same time to get the other societies to reorganise at a later stage. I do not think that either the inspectors of the I.A.O.S. or of the Department of Agriculture can do anything more at the moment. They have used their persuasive powers as far as they possibly could on the various committees in Sligo in their efforts to try and get a voluntary scheme of reorganisation.
