——by certain groups in the country. And another good reason for ending the extreme exaggeration of opinion on both sides of the House, but more particularly on the Opposition side, is that the people in this House who believe in sound finance have to face the unsound arguments made by miscellaneous farmers' federations spread throughout the country—to mention one item, the suggested suspension of the annuities. That was dealt with in the debate connected with the Department of the Minister for Lands. All the members of the Opposition were agreed that the Government were doing what they could about that, and any kind of suggestion of a national suspension of annuities would be fatal to the credit of the country. Another suggestion made by the farmers' federation which has not been followed up completely by the Opposition Party, but is suggested by some of them in a different form, is the question of immediately advancing towards farmers very extensive loans at a low rate of interest, without stating how these loans should be repaid, what guarantee would be offered, over what period they should be spread, or giving any detailed information as to how matters should be arranged without causing inflation. That is a matter which should be regarded with the greatest care by persons who do not believe in undue inflation.
The third question is the question of derating. Members of the Opposition Party were in the Government at the time the Derating Commission was formed and all of them recall the figures provided for them as to the extent to which the farmers bore the burden of taxation. It will be recalled that in 1931 the farmers paid 43 per cent. of the customs duty, 30 per cent. of the excise taxes, 10 per cent. of the motor taxes and 2 per cent. of the property and income-tax. In return for that they received 59 per cent. of the entire expenditure on central and local government services; that came back eventually to the farmers. I think the Opposition will agree with the Government in this respect, that if there is to be any change in the derating policy it would be insane to make that change without having the most minute examination to see how far those percentages have altered, if they have altered, and to what degree they have altered. There is no practical or theoretical economist who will advise any country to transfer £1,750,000 of taxation from one group of people and distribute it amongst the rest of the population without the most careful examination in advance.
The position is that the farmers' federation believe that if you were to derate the farmers you would be in the position of leaving them with a surplus which they could use for production, for their own amusement and leisure and for their well-being, a surplus which is at present being used by the non-agricultural part of the community. For instance, if there are 5,000 wireless sets bought by the industrial community for the 2,000 bought by the agricultural community, by derating or transferring taxation from one section of the farmers you would enable these farmers to have the position reversed and they would be able to buy wireless sets and there would be less sets for the other sections of the community. I suggest that there is no economist, no member of the Department of Finance, no person acquainted with practical finance, who will guarantee in advance that the transfer of taxation of that kind would have the effect desired.
There is nothing to prove that if you were to transfer taxation from the farmers to the whole community, and particularly to the industrial community, the result would not be that the non-agricultural part of the community would make the farmers pay for a great deal of that by increased costs. If you prevent the man who carries the farmer's eggs from buying a wireless set and give the chance to the farmer to buy a set, you have no proof that the man who carries the eggs will not charge more for carrying them and go on buying his wireless set. The spread of that demand for derating is a most serious thing for the finances of the country, and the Opposition should agree with the Government that it requires most careful consideration to see that if that incidence of taxation were to be changed an examination would have to take place, and it would be necessary to determine what would be the economic results of transferring the taxation and whether they would work out in the direction desired. If both Parties could agree about that, it would help to stay a most unreasonable demand which, in the end, would not be of service to the farmers.
There are some of us who believe that the non-agricultural portion of the community may, in the course of the next five years, have to make sacrifices in order to restore production for the farmers. I think that is quite possible. Let us be sure, when we make the sacrifices, that they will be sacrifices that will maintain the demand for agricultural produce and at the same time will not have the wrong effect of merely increasing the cost to the farmer. I mention that because it is up to the whole House to consider that position most seriously.
Another reason why the farmers feel in an adverse position is undoubtedly the question of land division. Over 9,000,000 acres of land have been dealt with under the Land Acts in this country. If one studies the history of any other country in Europe which went through a period of rapid land division, one will find from their statistics that their agricultural production never increased while the land division was being carried out. With the best will in the world, when land is constantly changing hands, going from one person to another, there is not to be got the same stability that exists in a country where all the land has been divided. The great increase in agricultural production in Denmark took place after the land had been divided. That is a fact that cannot be disputed.
Another factor which affects the position of the farmer is the question of emigration. Emigration, as I stated already, is not due only to adverse conditions here. It is the result also of the continual draw from England. There is no doubt if the British Government continue their programme of expansion in armaments there will be no unemployment whatsoever of a certain kind in England in the course of 12 months from now. The Government here, when initiating a new agricultural programme, will be in the position that they will find there is an increased demand for labour from this country in England. In eight months' time there will be only 500,000 people unemployed in England, that is people who could possibly get work in the new industries resulting from armaments expansion. England will be in the position shortly that there will be a heightened demand for the kind of labour that we can provide, rather than a diminishing demand. The factor of emigration is one of the most serious things in permanently preventing increased agricultural production in this country. That is because there is always the alternative between increasing production and emigration. Assuming that the Government did everything that the Opposition ask— that they carried out the most extensive reorganisation of agriculture—the fact will remain that the family will have the alternative of taking full advantage of these measures of Government reorganisation and increased agricultural production or sending some of their family to England. There is always this alternative of emigration. That is one of the most serious things with which this country is faced. The continual demand in England for labour constitutes the most absolute menace to increased profits for the agricultural community. No one who studied Dr. Geary's pamphlet on emigration and its relation to prosperity in adjacent countries, as distinct from prosperity in the country from which the people are emigrating, can deny that position.
I am not arguing that the Government's economic war did not accentuate emigration. But no accentuation of emigration by the economic war can equal the permanent emigration of the people of this country in diminishing the initiative that is found in Denmark or in the Balkan countries. In Denmark and in the Balkan countries where they cannot emigrate, they have to scratch every grain of wheat out of the surface of the earth. That will always be a factor in our life.
Another reason for the adverse position of the farmer is the fact that, so far, we have lacked any general plan. We have been at the mercy of having to conduct a national conflict which now is ended as far as this part of the country is concerned. But there is no general plan. The farmers have no feeling that they are expected to take advantage of any system which will improve their position. They have never been told to do anything which related purely to the farm. Since 1922 the House has never really agreed to any policy in connection with the farm in which there was not intermingled a question in connection with our status in the Commonwealth of Nations. That has been a serious menace, but, thank God, that is ended and, for the first time in the history of this country, people on both sides of this House agree and people talk more freely than they ever did before, because it is possible for the Government to evolve a plan that had not been possible before.
The Opposition spoke about immediate measures having to be taken. The Opposition, and even members of our own Party, disagree as to what measures ought to be taken. Listening to practical farmers, I can reiterate what Deputy Brennan said, that there should be a commission on agriculture. I think it is hard to find agreement on many matters discussed in this House. Down the country one can get farmers to stand up and fight for three hours on all sorts of factors in connection with agricultural production on which there is no sort of agreement. We have members of the House saying the Government is interfering too much with agriculture. Deputy Hughes made what is the most excellent suggestion —that there should be a complete change in the entire technique of farming. That is a matter not for the Government but for a commission to settle, because it involves enormous changes in the general position.
We have only to read back to the reports made by the Opposition Party on agriculture when they had the administration of this country in their hands. I have spent hours and hours reading them. I find if one reads what was then suggested and the statements that were made by the then Minister for Agriculture, the late Deputy Hogan, that there were suggestions of the kind which would bring immediate and temporary relief to the farming community and definite improvement to the farmers' position. But over and over again one will find in these reports remarks suggesting that there was something fundamentally wrong, that there was something fundamentally lacking in the way of agricultural technique. Many suggestions were made. And the suggestions made by some indicated that these suggestions, wise as they were, did very little to change fundamentally the position of agriculture in the country. It could only effect a certain improvement.
I believe that the position is serious from the standpoint of securing any immediate effect. The fact is that if one takes the figures of agricultural production it will be found that since the beginning of this century we have advanced less rapidly in agriculture than any other country in the world which specialised in agriculture. The members of this House should stop debating about the economic war and get down to the basis of what we have to consider. It is not what this Government did or did not do since 1922, but the fact that there has been a complete lack of agricultural development since 1900.
If we can get back to the mentality of seeing what can be done for agriculture on the standpoint of what has been done since 1900, then we can get down to something, and get away from all the exaggeration of the people who speak from the point of view of special interests, and not from the point of view of the country as a whole. I should like to have some of those figures burn themselves into the minds of Deputies in this House. For instance, to my amazement I discovered that the increase of cattle in this country from 1900 to 1927 is only 8 per cent., and from then on it remained practically the same, that is roughly 4,000,000. The production of sheep in this country went down by 4 per cent. from 1900 to 1927, and from then until 1937 remained roughly the same. The number of pigs increased by only 20 per cent. up to 1927, and has gone down by 16 per cent. from 1927 to 1937. The number of poultry went up by 50 per cent., and then went down by 10 per cent. since 1927. Those are the really serious figures. The fact that the total amount of land under cultivation went down since 1900 is in itself a serious factor. The fact that what is described as "other land" has increased—the land which has gone back to rough grazing has increased— and the fact that the actual acreage of cultivated grass land has increased by only 5 per cent. since 1897, are very serious things. I merely repeat some of the matters which Deputy Hughes mentioned, and which are very valuable as indicating where our interests really lie. There is the fact that the production of butter went up in New Zealand from 172,583 cwts. to nearly 3,000,000 cwts. in 1936; there is the fact that they increased their production of chilled and frozen meat from 2,000,000 cwts. to 5,000,000 cwts., and increased their wool production from 140,000,000 lbs. to 314,000,000 lbs. Then once more there is the surprising point raised by Deputy Hughes, namely the comparative output—the fact that we produce £96 per agricultural worker in this country, compared with £169 in England, £84 in Scotland and £196 in Denmark. Those are rather different from the figures given by Deputy Hughes, but they come to exactly the same thing.
We in this country, as our economists have frequently said, have always done our best to approximate to the standard of living of the two countries to which our people emigrate, that is England and America, and have been making a desperate effort to increase our standard of living in every possible way, while at the same time the income of the agricultural population has never increased to the extent necessary in order to justify it. We have to face that very serious position. The cost of our social services has gone up. The cost of our governmental services has increased, and at the same time we have lagged in production. That raises immediately the question of the future of agriculture in this country. I do suggest that, for the purposes of this Estimate, there should be some definite conclusion reached by the Minister—which I am sure he can reach—as to what is the future market of this country, as to whether we can strive towards greater production, and whether it would be usefully absorbed. I had hopes—on reading the British Medical Association's suggestion that they needed 80 per cent. more butter and 40 per cent. more eggs in England, and that the farmers who attended the conference had stated they could not possibly supply them from native sources—that there was a larger market; that with scientific methods of lowering our cost of production we could provide far more foodstuffs both for our own people and for the English; and that, particularly in view of the international situation, if we could begin to cut in on the New Zealand and Danish farmer, the British Government would do nothing to stop us. In fact it would be to their immense strategic advantage to help us.
The Minister said he founded the Agricultural Commission to inquire into methods of increasing agricultural production, but I hope he will be able to go further and make a general statement to the public that for the present anyway he can envisage an increased production of 15 per cent. or 20 per cent. with perfect safety to the Anglo-Irish Agreement. He should not leave some of the farmers in the country wondering whether it is worth while increasing production. Let us have some interim statement from the Minister—if possible when he is replying—that there is definitely room for a very large increase in certain directions. I myself think that we need two plans in connection with agriculture. We need an immediate plan and a long-term plan. In connection with the immediate plan, to my mind the first and most important thing is for the Minister to ascertain definitely the position with regard to the credit-worthiness of the farmers of this country. We cannot go on in this House debating for the next 12 months whether the farmers are bankrupt or whether the farmers are not bankrupt. The question must be decided finally. I asked the Minister whether I could suggest this to him tactfully, and he said that I could. I do suggest that if the figures were made available to the Banking Commission for 1934, 1935 and 1936 on the credit position in the country, it would be possible for the Government in the course of the next three months to find out what is the position with regard to credit. I do not believe it is anything like as bad as has been indicated by members of the Opposition. On the other hand, I know very well it is not nearly so good as has been indicated sometimes by members of the Party to which I belong. I myself have asked questions of ordinary farmers over and over again about this position, and I should like to give an indication to the House on the matter so that they may see how difficult it would be for the Minister to ascertain the credit position of the farmers. For example, in places like South Roscommon I have questioned the farmers— perhaps 30 or 40 of them in a group—on this matter, and they said that about 10 per cent. of the farmers in their area are in the position that they have absolutely no money to purchase the necessities for their production, and no money with which to restore the stock which they had lost through having had to sell stock during the economic war. In another place I asked a very prominent agricultural instructor, who must be nameless, and he tole me that about 50 per cent. of the farmers are in that position. To my mind it is a very difficult thing to ascertain, because there are two kinds of credit-worthiness. There is the type of credit-worthiness which will enable the farmer to conduct his production as it was in previous years, and there is the type of credit-worthiness which will enable him to take advantage of expansion, to go ahead and produce more, and find a market for that produce. My principal reaction to this debate is that this question must be settled, and I suggest that the Government should come out with a statement as to what they think is the position with regard to credit.
The next question to decide as rapidly as possible is what type of credit is needed by the farmers. To my mind, it is not enough simply to leave it to the Agricultural Commission to examine over a period of months and months, perhaps years, and to go into the long term question of how to provide credit suitable for agriculture. We ought at least to have a clear explanation to the effect that certain kinds of credit will not be made available because they would not produce the effect that was desired; in other words, that the plan of the farmers who follow the Farmers' Federation, and the farmers who follow some members of the Opposition—the plan of extending large loans in money to farmers for repayment over a stated period—is discountenanced, on the grounds that it might result in inflation of prices, followed by a decrease later on. All the members of this House will have read something of what is called "pump priming" in the United States, and if they read the American agricultural magazines, as I do on occasions, they will find hardly an economist in America who will approve of everything President Roosevelt did in the way of credit expansion because, they said, it did not have the effect he desired, and that the pouring out of money into a community which had been terribly damaged by economic adversity, without having regard to the circumstances, is most dangerous. In this country we would have immediate reactions to inflation, immediate reactions in the cattle market to the sudden purchase of stock and the sudden disposal of them afterwards. It is a matter which requires the very gravest consideration. There are other kinds of credits which could be made available, credits in kind, which could be guaranteed to produce results; that is to say, the Minister might consider the expansion of things like subsidies for manures, subsidies for lime, and subsidies for the various poultry schemes carried out by the Government. That form of credit is a thing about which there possibly could be some early decision but, at least, I claim from listening to the debate that within three or four months of this date there must be some definite pronouncement as to the provision of credit in this country in regard to agriculture. There is no doubt that Deputies are more in contact with people who are in distress than with people who are not in distress and it is very easy to exaggerate the position, but I claim the position must be clarified in the course of the next few months.
As far as the long-term plan is concerned, Deputy Hughes demanded a complete revolution in the technique of farming, and I agree with him. I see no other way of providing for all social services or preventing our dead-weight debt increasing or bringing about the position which this country should have, in my opinion, of being a country which pays for itself and which never indulges in the kind of inflation that has nearly ruined the Balkan countries, has nearly ruined France and which has brought Germany to the position of having a very low standard of living. If we are to have that satisfactory position, we have got to increase our agricultural production. If there is to be a change in the technique of farming, then we shall have to bring about an entire change in the methods of agricultural production. I have the highest praise for our agricultural instructors, but if we are to have that change in the technique of farming, it will be necessary for us to have 20 times the present number of agricultural instructors. We shall have to embark upon a rural education which has never yet been conceived. If the members of the Opposition and the members of the Government Party advocate this instruction, and if they seriously believe in it, sacrifices will have to be made by the rest of the community in order to provide the cost of that instruction.
I was speaking to an agricultural instructor the other day, a man who works from morning to night, during his office hours and after them, to help the farmers, who gives classes everywhere, who gives advice to the farmers at the market, and who goes to visit them in their houses, a man who works absolutely full time in his efforts to improve the condition of the agriculturist. I asked him: "If you take the best-run type of farm in your county, how many farms out of ten do you know that would approximate to that best type of farm in efficiency of production and in the use of the most modern methods," and the answer was: "Barely one in ten." That is, I presume, what Deputy Hughes had in mind when he advocated a change in the technique of farming. Up to now we never had an opportunity of carrying out such a scheme. There has never been that condition of political stability under which such an attempt would have been possible. The last Government had to contend with the reactions of the civil war, and this Government had to carry on an economic war up to quite recent times.
I myself think that one of the most serious questions to consider is the fact that we are the only country in the world that can produce a large amount of agricultural produce, but who are adopting neither the plan of the small farm countries who carry out co-operation to the last possible degree, nor the plan of the other type of agricultural countries where they are changing small farms into big farms. That is one thing we have to consider in the course of the next couple of years. We are still carrying on land division. It was carried on by the last Government and it is being continued by this Government. It is a policy which has a democratic tradition. It is a policy which very few would suggest should be changed, but yet we are the only country who are attempting to compete in the world's market with similar small farm countries who have adopted a high degree of co-operation in distribution and marketing. Equally we do not follow the methods of those countries where the small farms are being grouped together to make large farms and where costs are being reduced in that way. I submit that if the Government cut 10 per cent. off our tariffs, and reduced the cost of living of the farmer in that way, if the Government were to reduce the taxes on agricultural implements and abolish the quota for fertilisers, remembering that the total amount expended on fertilisers is only about 3 per cent. of the farmers' total expenses; and if you carried out a number of other suggestions for reducing the cost of production, you would never get down to the basis on which you could compete with the Danes and the New Zealanders on the world market so long as our methods of farming are so fundamentally different from those carried on in Denmark and in New Zealand. You cannot get away from the fact that no matter how you reduce the cost to the farmers by the methods suggested here, that the fundamental costs represent only a small proportion of the profits compared with those of the farmers in Denmark and New Zealand who have gathered unto themselves the whole processing and the whole marketing of their produce. That is the suggestion we have to consider.
If Deputies opposite work out the result of reducing the cost of production in this country by 10 per cent. and regard that as a saving; if they go on to press for a measure of derating for agricultural land and add the relatively small sum which that will bring by way of relief to our farmers, they will still find that if we are to keep people on the land and if we are to compete with the people of New Zealand and Denmark on our principal market, we shall have to co-operate with our farmers in a way that has so far never been seriously attempted. There is no alternative to that. I defy anybody who has studied the economy of agriculture, simply looking at it as a matter of the market price of produce and the proportion taken by the farmer for himself, to deny that the future of this country must lie either in the development of slow persistent co-operation amongst the farmers or else in the grouping of small farms into big farms, a thing which is not politically desirable and which is not politically likely to happen. I am not saying anything original. Heaven knows it has been said often enough. Deputy Hughes suggested quite rightly that the Government should enlist the services of a number of experts, and I am sure the first thing they will say is that up to a certain point you can reduce your costs, but that you will still approximate to the position in which you will have to compete with those people who have cut their costs by co-operation and by the breaking up of small farms. If anybody can deny that, I should like to hear him put forward his views in this House. As I say I am not a farmer. I am merely a person who has listened to farmers, who has read a great deal about the subject and who has been in a position to make a comparison of the figures available in the different countries.
In conclusion, might I suggest that neither this Government nor the last Government could have possibly taken up the idea of instilling belief in this scheme into the farmers? During the economic war and the civil war it would have been utterly impossible to attempt to do so. I suggest that the adoption of this long-term plan is absolutely inevitable in future. Deputy Dillon made a number of very valuable suggestions in the course of a very long speech, but I would say that valuable as these suggestions are, the farmers of the country will never reach that condition of prosperity which we all desire for them unless they make up their minds to practice that co-operation in distribution and in marketing which has been the basis of the success of agriculture in other countries. I feel that so intensely that I am afraid I have repeated myself; but the House will doubtless forgive me because I have not often had an opportunity to speak about it.
There is one more question which was alluded to by Deputy Mulcahy in the debate on the Estimate for the Department of Industry and Commerce. He made the very interesting statement that the mere improvement of agricultural production in this country, the mere increase of the farmer's prosperity, would not of itself very largely increase the number of people employed on the land on agriculture and, therefore, there was great need for soundly developed industries. That is one of the hardest facts of all that this House has to face, that in those countries whose prosperity has greatly increased in the past few years, who have not had any of the serious crises which have taken place from time to time, like Sweden, Holland, etc., there has been a progressive decrease of employment on the land, while the prosperity of the people on the land increased. That is the sad position which has to be faced—that the mere increase of agricultural production would not increase the number of people gainfully and permanently employed as agricultural labourers or otherwise working on farms to any very great degree. One fact which has to be faced is that there is no example in Europe which can be given that it will actually help definitely to increase employment. We can increase employment to a considerable extent; I am not making any suggestion to the contrary. We might employ thousands more than we do to-day, but that it would solve the question of employing people on the land permanently is not the case, as can be seen if figures are examined for countries which have greatly improved agricultural production.
I think I am right in saying that Denmark is the only country where the number of people who work on the land has not decreased in the past 20 years. But the number of agricultural labourers in that country actually has decreased in spite of the enormous increase in production. The question we have to ask ourselves is: what are these people going to do? The answer is, that we can be quite certain, if things work out here the way they have in other countries which have relatively little unemployment, they will be employed in carrying out the kind of services the farmers will be able to pay for when they are more prosperous. Some of them will be employed in providing agricultural machinery and providing the farmers with goods and services that they were never able to purchase before. That is the answer, and that is what happened in countries which, relatively speaking, are prosperous. But there is no use in hoping that a large increase in agricultural production would have the direct effect of employing more people on the land.
I should like to close what I have to say by pointing out that I am not in any way trying to minimise the danger of the position or to make excuses for having carried out the economic war. That was national policy. We achieved the solution of the greatest part of our difficulties. We ended a great part of the conflict with England by so doing. We deliberately went out to ask a certain part of the agricultural population of this country to undertake sacrifices for the sake of the country. They undertook these sacrifices. They were offered a chance, after having a year of sacrifices, to say that they did not want it; but they went on and undertook the sacrifices. The result has been that we have obtained a remission of £88,000,000 of debt, and we have concluded what has been an enormous cost financially to this country—the establishing of our national position.
As to the figures I gave of production, from 1900 to 1931, that lack of increase was due almost entirely to the fact that we had a national conflict in this country, and the ending of that conflict, as far as this part of the country is concerned, is beyond financial measure, because it will result in our being able to get down to the realities of life in this country in a way we could never do before. I am not attempting in saying this in any way to minimise the sacrifices we imposed on the farmers. I am saying that there are a number of Deputies on both sides of this House who have been thinking instinctively of agricultural production, whether they mentioned it or not, as it has been from 1900 to the present day. If we think of the matter as a whole, and of the great problem before the country, that will lead us, to my mind, to the most useful suggestions for improving the position. With that, and an exhortation to the Minister to let us have some fundamental answer about the position of credit, I will close my remarks.
