asked the Minister for Agriculture if, in view of his statement published in the poultry pamphlet P.E.P., for May, 1948, in which he guaranteed 3/- per dozen for eggs and stated that increased supplies would command higher prices, he will explain how higher production has, in fact, resulted in reduced prices.
Ceisteanna—Questions. Oral Answers. - Egg Prices.
I presume the Deputy refers to a message from myself published in the May issue of P.E.P.
If this assumption is correct, the Deputy, on giving the statement closer attention, will observe that it contains no guarantee of 3/- per dozen for eggs, but that it does mention that the price of a hundred of eggs is 2/- higher than the price of a cwt. of Indian meal. That favourable differential still obtains and I hope will continue to obtain.
In regard to the Deputy's perplexity as to my assurance that increased supplies of eggs would result in the producer getting higher prices than if supplies were dwindling, I assume he is adverting to the following paragraph:—
"It used to be the rule that when egg supplies increased the price went down. That is no longer true. We have made an agreement with the British Ministry of Food that the more eggs we send to the British market the more they will pay for our eggs."
The gratifying realisation of this anticipation has been fully described in a letter addressed by me on the 14th April, 1949, to each county committee of agriculture in Ireland, and I am sending the Deputy a copy of that letter, and, with the Ceann Comhairle's permission, I shall arrange to have it printed in the Official Report as an annexe to this reply.
Following is the letter:—
14th April, 1949.
EGG PRICES IN 1949 AND 1950.
"Dear Sir,
Reports reaching my Department indicate that serious and widespread misrepresentations are being made in regard to the effect on egg prices of the agreement concluded this year with the British Ministry of Food.
The object of these misrepresentations may be to undermine the confidence of poultry-keepers in the future of their industry by instilling into their minds the erroneous notion that the recent agreement is disadvantageous to the producer. In view of the importance of egg production to the country in general and to small farmers in particular, it is necessary to set the facts before the county committees of agriculture so that egg producers may be in no doubt as to how they stand for the next two years and what the position would have been if the 1947 agreement had not been replaced by the new contract.
Soon after assuming office as Minister for Agriculture I examined the egg agreement then in operation and found it was a good one as far as 1948 was concerned but not so good for the years 1949 and 1950. The prices payable by the Ministry of Food for 1949 would have been sufficient to provide for producers 2/10 per dozen for a limited quantity and 2/4 per dozen for any exports in excess of that quantity, while the price for 1950 would have yielded only 1/5 per dozen. The 1950 price was stated to be a minimum price, which might or might not be increased as a result of negotiations, but there was no reason to assume that an increase would be forthcoming. In any case, the different prices payable for 1949 and the uncertainty in regard to 1950 would prove so disconcerting to poultry-keepers that production would be bound to suffer. I, therefore, had the matter reopened with a view to having all uncertainties removed and definite prices settled for 1949 and 1950, without any limitation as to the quantities to which the new price would apply.
The difference in prices during 1949 (2/10 and 2/4) under the old agreement arose out of the provision by the Ministry of Food of a maximum sum of £1,350,000 to be paid by way of bonus at the rate of 5/- per great hundred on eggs supplied to the Ministry during 1948 and subsequent years. The bonus would apply to exports up to 5,400,000 great hundreds and would then cease. Exports in 1948 amounted to 2,200,000 great hundreds, so that the bonus of 5/-would be available for 3,200,000 great hundreds in the following years. Exports from the beginning of 1949 to the 6th April were 76 per cent. higher than in the corresponding period of 1948. If this big increase in exports were maintained throughout 1949 the bounty payment would be exhausted before the end of June. Even assuming that the increase after 6th April would not be as high as 76 per cent., but would drop to, say, 50 per cent., the bonus payment would come to an end in July, after which the price payable would be equivalent to 2/4 per dozen to producers.
As a result of the agreement reached with the Ministry of Food this year, the prices fixed for exports in 1949 and 1950 are such that producers are guaranteed 2/6 per dozen for all the eggs they market in these years, irrespective of quantity. How this compares with the earlier agreement can be seen from the following table:—
EGG PRICES DURING 1949 AND 1950.
|
Under 1947 Agreement |
Under 1949 Agreement |
|||||||
|
Year |
Estimated Exports (Great hundreds) |
Price per dozen to producers |
Total Amount |
Estimated Exports (Great hundreds) |
Price per dozen to producers |
Total Amount |
||
|
s. |
d. |
£ |
s. |
d. |
£ |
|||
|
1949 |
3,200,000 |
2 |
10 |
4,533,333 |
||||
|
240,000 |
2 |
4 |
280,000 |
3,440,000 |
2 |
6 |
4,300,000 |
|
|
1950 |
4,250,000 |
1 |
5 |
3,010,417 |
4,250,000 |
2 |
6 |
5,312,500 |
|
Totals |
7,690,000 |
2 |
0½ |
7,823,750 |
7,690,000 |
2 |
6 |
9,612,500 |
|
average |
It will be observed that, apart from the great advantage of having prices guaranteed for two years ahead, the cash value of the difference between the 1947 and 1949 agreements is £1,788,750 in favour of the latter— that is to say, our producers will receive that amount for their egg exports in 1949 and 1950 over and above what they would have received under the 1947 agreement. Moreover, since the home price is regulated to a large extent by export price, there will be a corresponding benefit to producers on eggs sold by them for domestic consumption.
In conclusion I may say that I intend before the expiry of the present year to negotiate with the Ministry of Food the price to be paid for egg exports in 1951 in order that early in 1950 I may again be in a position to inform producers what their price will be for two years ahead of that time.
Yours sincerely,
(Signed) JAMES M. DILLON,
Minister for Agriculture."
I have before me a copy of the message sent by the Minister to this journal P.E.P., in which the Minister says:—
"We have an agreement with the British Government, that the more eggs we send to the British market, the more they will pay for our eggs."
That is correct.
"As a result of this agreement shippers can afford to pay 3/- per dozen for eggs to producers." Every poultry producer naturally inferred from that statement that the guaranteed price of 3/- per dozen would continue unless supplies were reduced. If supplies increased, the natural inference from that statement was that the price would increase. Therefore, I think that the Minister did mislead producers very gravely in this matter.
If I am to interpret that as a supplementary statement—it seems more like an obscurantist comment—I would direct the Deputy's attention to the fact that he has overlooked the preceding paragraph of that message which emphasised the fact that so long as eggs were fetching a price per long hundred in excess of the price of Indian meal per cwt. the production of eggs was designed to yield a profit. I have pointed out to the Deputy that although the prices of eggs has been reduced by 5/- per long hundred, the price of Indian meal has been reduced by a rather larger sum per cwt., and the result of this adjustment and of the new agreement that has been made is that whereas under the old agreement which obtained egg shipments for 1949-50 would have yielded producers £7,825,000, under the new agreement the same shipments of eggs will yield the producer £9,612,000. Now if £9,612,000 is not more money than £7,825,000 then the Deputy and I had better go back to school.
2/6 a dozen is less than 3/- a dozen.
May I ask the Minister what benefit it is to compare the price of eggs with the price of Indian meal when there are tens of thousands of egg producers who do not use Indian meal to feed their poultry but who feed them on home-produced grain?
The Deputy does not claim the right, I take it, to embark on a discussion at this stage on the fundamental economics of agriculture, but my Estimate is the next Estimate down for discussion and I shall then be glad to discuss the matter with the Deputy.