asked the Minister for Supplies whether, in view of the recent large increase in the retail price of butter which makes its purchase almost prohibitive for poor persons, he proposes to take any steps to ensure that poor persons will be enabled to purchase their butter ration at reduced prices.
Ceisteanna—Questions. Oral Answers. - Price of Butter.
asked the Minister for Supplies whether the increase of 4d. per 1b. in the price of butter may be considered as a permanent increase or one due only to winter conditions.
asked the Minister for Supplies if he will indicate the reasons for the increased price of butter; whether he is aware that there is a large supply of butter in cold storage which would supply the country for some months; and, if in view of this, he will postpone the increase until that supply is exhausted as the majority of the people are suffering great hardship in paying the present fixed price for butter.
Mr. Byrne
asked the Minister for Supplies if he will give, in detail, the reasons for the increase of 4d. per 1b. in the price of butter to the consumers; and if he has satisfied himself that this increase in the price is fully justified.
asked the Minister for Supplies if he is aware of the grave discontent that exists amongst working-class people because of the recent increase of 4d. per 1b. in the retail price of butter, and whether, in view of the hardship it inflicts on such people, he will consider subsidising the price of butter to the extent that people with small incomes may obtain the ration to which they are entitled at a maximum price of 2/- per 1b.
The main reason for the recent increase in the retail price of butter is the increased price paid since December 1st, 1943, to the suppliers of milk to the creameries. The new price provides also for some increase in the margins on butter to wholesaler and retail distributors. Prior to the 1st December, 1943, the price paid to the milk suppliers was 9d. per gallon, but from that date to March 31st, 1944, the price was increased to 1/- per gallon, and from 1st April, 1944, to 10½d. per gallon. This increase was considered necessary to encourage the maintenance of milk production. Every increase of 1d. per gallon in the price of milk necessitates an increase in the price of butter by almost 2½d. per 1b. (the exact figure is 2?d. per 1b.). Butter produced at the present time would, therefore, retail at 2/11d. per 1b. if there were no State subsidy. When production increases in the spring, and the price of milk will be 10½d. per gallon, the retail price of butter would be almost 2/7 per 1b. without a subsidy. It is only by applying the increase in price to the stocks of creamery butter in store and maintaining the subsidy at approximately 3d. per 1b. that it is possible to retail butter at 2/4 per 1b. There is no prospect of a reduction of that figure while milk prices remain at present levels. Of the 4d. increase recently permitted, roughly, ¾d. was divided between the wholesalers and retailers as increased selling margins. The subsidy in the current financial year amounts to £700,000, and will be approximately £1,000,000 in the financial year 1944/45. If butter prices were to remain unchanged at 2/- per 1b. the cost of the subsidy to the taxpayer would be over £2,100,000 next year. There is no provision by which any particular section of the community may purchase their butter ration at less than the maximum retail price. Deputies are aware that under the Food Allowances Scheme each dependent of a person in receipt of unemployment assistance is entitled to ¼ 1b. butter per week up to a maximum of six dependents. This scheme also applies to old age pensioners, blind pensioners and dependents, widows and orphans who are beneficiaries under the Widows' and Orphans' Pensions Acts and recipients of disablement benefit under the National Health Insurance Acts, who are in necessitous circumstances.
Would the Minister say whether the price of butter will fall proportionately in April with the fall in the price of milk?
No.
I thought that the Minister said that the increase in the price of butter was caused by the increase in the price of milk?
The price of butter on the basis of the price of milk that will operate after April would be 2/7 per lb., but the subsidy of 3d. will bring it down to 2/4.
But surely the subsidy is still continued?
Yes; if it were not, the price would be 2/7.
The Minister said 2/11?
At present.
But milk is going to fall on 1st April to 10½d. per gallon?
At 10½d. per gallon the butter would retail normally at 2/7.
But with the present subsidy?
It would be 2/4. The subsidy is 3d. per lb.
If the subsidy will be the same then as now, may we not expect a decrease in the price of butter?
The subsidy is at present 3d. and butter can be retailed at 2s. 4d. per lb. at present because the increased price applies to butter in cold store now.
Would the Minister say what is the amount of the levy on butter in cold store?
I would require notice of that question. It must be about 4d.
What becomes of that money?
It goes into the pool.
Has the Minister received representations suggesting that portion of the ration of poor people should be sold at a low price and that the loss be made up by an increase in the price of that portion sold to the rest of the community, in other words, that those who are in a position to buy a certain quantity would subsidise those who, according to the Taoiseach, are unable to buy their ration?
The Deputy will appreciate that there are obvious practical difficulties in dealing with such a suggestion in view of the fact that a very high proportion of the total butter production comes from individual farmers. It is only in relation to creamery butter that strict control over price or distribution can be exercised. In the case of butter produced and sold by individual farmers, it is obviously difficult to apply the same measure of control or the same price regulation as in the case of butter centrally controlled.
May I ask if the present stocks of butter which are now selling at 2/4 per lb. were not produced when milk was supplied at 9d. per gallon?
That is correct.
Mr. Byrne
Would the Minister consider the advisability of increasing the subsidy so as to enable people in receipt of small wages, or of no wages, to buy butter at a reasonable price or to give people on home assistance an opportunity of taking advantage of the subsidy for butter? I do not think those in receipt of small allowances such as home assistance are getting any butter at present. Would the Minister consider increasing the subsidy so as to enable those in receipt of home assistance or those in receipt of small wages to buy butter?
The subsidy of £700,000 will be increased to £1,000,000 next year. The Government is not prepared to go further than that.
I want to question the Minister's mathematics. He says that every increase of 1d. per gallon in the price of milk represents an increase of 2?d. per lb. in the price of butter. The price of butter at present is 2/4. How does the Minister support his statement having regard to the effect of the subsidy?
The butter has to be manufactured and distributed.
Last week at Cork the Taoiseach stated that as the result of the increase in the price of butter many poor people would be unable to buy their ration. The Minister has now stated that, because of practical difficulties, he can see no way out of that position. Is he content to accept the position that people are to be deprived of their ration merely because of these practical difficulties?
In so far as poor people can be segregated from the general community, they are being facilitated under the food voucher scheme. Other classes to whom the Deputy referred and to whom that scheme does not apply, are presumably those in employment whose wages are below a certain figure. The Deputy will appreciate the difficulty of operating any scheme to provide that butter be sold below the fixed price to persons whose wages do not reach a certain standard.
The position is that the people still have to do without the butter.
Will the Minister agree to apply the food vouchers to old age pensioners and others in the rural areas?
No; the food voucher scheme is not applicable to the circumstances in the rural areas.
In view of the Minister's statement, will he not consider distributing food vouchers to the unfortunate poor in many of our rural areas?
It is not practicable to apply the food voucher scheme in the rural districts.
Nothing appears to be practicable.
The Deputy can afford to ignore the difficulties, but the Government cannot.
Are we to take it that the country is not to get the benefit of the fall in the price of milk which will come about next April?
We have endeavoured to maintain a level price throughout the year. If the Deputy wants to speak about the fall in the price of milk next April, he must contemplate the price of butter at 2/8 per lb. now. The fact that butter, even with the present subsidy, should sell now at 2/8, but is actually sold at 2/4, is an indication of the financial arrangements that are necessary to ensure a levelling out of prices during the year.
Will the Minister say what portion of the 4d. increase will go to the creameries?
The amount that goes to the creameries is 3¼d.
Does the Minister say that 3¼d. goes to the creameries?
Yes.
How much goes to the farmers?
Practically the whole of it.
How is the 2/4 justified, seeing that the butter is manufactured from milk that is supplied to the creameries at 9d. a gallon? Is it the intention of the Minister to sell butter at 2/4 that costs him 1/11 to put into cold storage?
The butter now supplied is partly butter taken from cold storage, and partly butter that is being produced. The butter that is being produced could only be sold, even with the subsidy, at 2/8, but by bulking the two butters we can sell at 2/4.
Can the Minister give the percentage of what was produced from May to November, and the percentage that will be produced from Christmas to May? I think it would be a very small percentage; I understand it would be about 12½ per cent., or 15 per cent.