Deputy Corry has given notice that he wishes to raise on the Adjournment the subject matter of Question No. 23 on to-day's Order Paper.
Committee on Finance. - Adjournment Debate—Milk Costings Committee.
I asked the Minister for Agriculture to-day if he would state
"what progress has been made by the Milk Production Costs Committee, and when he expects to receive their report."
The Minister in his reply told me:—
"The chairman of the committee has informed me that it will not be possible for the committee to continue with the investigation because of a difference of opinion among the members on a question of definition."
We in the agricultural community need an enormous amount of patience——
They would want it.
——when we remember and when we know the effect——
His voice is breaking under the strain. I do not blame him.
——of the manoeuvers made in this country from time to time and when we come face to face with the position where a costings committee or some members of it refuse to allow into costings what has been allowed in every industrial concern. Industrial concerns which go before the Prices Tribunal to get their prices fixed include interest on capital and directors' fees, and they are allowed on those. But when we agriculturists come to look for the interest on our capital, to have it put on the price of our milk, and to have our farm management expenses taken into account, we are met by this manoeuvre.
I say it is time the Minister took a strong hand in this and insisted on taking the same line as the Minister for Industry and Commerce took when he allowed industrial firms to put it into their costings. We have suffered severely on this point. The Minister himself, when he was acting on a committee of the Beet Growers' Association, of which I happened to be chairman, supported the inclusion of both of these items in the beet costings and I am sure he will now agree that if they should have been included there they should be put in here.
We have very early milk costings that were taken by University College, Cork, and the Cork Milk Producers' Association, under the chairmanship of Professor Murphy, who is also the chairman of this present Milk Costings Committee. Those charges were not included then—neither interest on capital nor management expenses—and with those items excluded those costings were afterwards very maliciously used in this House by bombasts like Deputy Dillon to make a false case here——
It would be a fool that would get between the Deputy and the Minister.
——to do an injustice to the agricultural community. Take any farm carrying from 15 to 20 cows. If you were to buy them at present they would cost somewhere around £5,000. That money does not fall from Heaven. If that were the cost of putting stock on that farm, that cost should be counted, along with the cost of any machinery and implements which would cost a couple of thousand pounds more. If I invested that, instead of in land— that was criticised by Deputy O'Gorman the other day—in Midleton Worsted, I would be drawing 5 or 6 per cent. for the money; but because I invested the money in land I get nothing. That is the manner in which this case was put. Let us take the cause of the insecurity that has existed during the last few years in farm land. It is the decadent result of Deputy Dillon's policy and propaganda. We have a reduction of 50,000 milch cows in the first year and a total reduction between 1950 and 1952 of 76,600 cows. Gone!—and those cows at the very modest production of 500 gallons a cow would give 114,881 cwt. of butter. We imported in 1951 100,199 cwt. and paid £1,860,000 for it, to Brian Boru.
On a point of order, I think Deputy Corry knows as well as everyone else what was responsible for the shortage of butter and the shortage of milch cows in the particular years he is talking about.
That is not a point of order. The Chair would like to make a point of order to the Deputy himself.
It was entirely due to the position in that season. The Deputy must be honest with himself.
I am honest.
The Deputy must remember what was responsible for the shortage of cows.
Never get between tinkers.
I will tell Deputy Corry this much—the shortage was due to the fact that they were in-calf.
I want to remind Deputy Corry that the question asks what progress has been made by the Milk Production Costings Committee. He seems to be travelling a bit away from that.
He is getting into trouble with the Minister for Agriculture on that point.
I am talking of the insecurity that has existed in the agricultural community since they were informed by an irresponsible Minister that the price of their milk would be reduced by 2d. a gallon for five years.
That has nothing to do with this. This deals with the progress the committee has made.
The hope that those farmers got, replacing their stocks of cows, on a guarantee by the present Minister that a costings board would be set up, that we would find the cost of production of milk and that they would be paid that cost of production plus a fair profit——
Yes, that was the promise, that was the bargain.
I am here to see it is carried out. That is my position.
Fair enough.
I have pointed out one result of it, that we are paying to the foreigner each year for the production of the cows that are gone. That butter has to be brought in from the foreigner each year. Remember that was only a temporary cessation, a temporary stop in this drainage out, caused by the insecurity of the farmers, caused by Deputy Dillon.
They were never on any sure footing until Deputy Dillon took them up.
I find now that apparently this committee is to give up its work. I want the Minister to see that the committee is given proper terms of reference, that they will bring in there what is brought in by every industrial firm. I am not looking for too much in that and I am insisting that that be done.
Hear hear!
The agricultural community have suffered enough. In the short period of seven years there was a reduction of over 51,000 people working on the land and 76,000 cows have gone.
That does not seem to have anything to do with the progress made by the costings committee.
I am suggesting, Sir, that the Minister should now put the same conditions into farmers' costings as the Minister himself insisted upon putting into the best costings when we were preparing them. That is not looking for too much. I am also suggesting that he should insist upon the committee carrying on their work under those conditions. No committee should be allowed to break up on account of a frivolous refusal to allow honest costings into the make-up of their expense sheet. Those costings are as honest as the costings upon which we farmers are charged for our artificial manures and everything else.
That is perfectly true.
I do not think I am looking for too much. Thank God for the change of Ministers. In my opinion we have now a Minister for Agriculture who is as anxious as I am to prevent the reduction in live stock and milch cows brought about by the policy of his predecessor.
Is it not a wonder that he did not give the Deputy a satisfactory reply this evening?
He will.
Too long have they waved the costings prepared by Professor Murphy in our faces. Seventy-six thousand cows have gone on the strength of it and then they went over for Brian Boru's butter. Let us get down to business on this. I want to give the Minister plenty of time to answer me. I know I will not be answered in the same abusive, vicious and dirty manner in which I used to be answered from that very same corner where the present Minister now sits, when I raised the matter of the muck that Deputy Dillon was bringing in here.
The question asked me this evening by Deputy Corry was as follows:—
"To ask the Minister for Agriculture if he will state what progress has been made by the Milk Production Costings Committee, and when he expects to receive their report."
Deputy Corry has already quoted the reply I gave him. I doubt if I have sufficient time to cover the history of the costings committee from the time I set it up over 12 months ago. I might say that I agree with Deputy Corry that it is necessary that the farmers should have costings carried out not only in regard to milk, but in regard to every other commodity produced, in order to enable the farmers to get an economic price for their produce. If they produce costings for any particular article produced on the farm they can say: "It has cost me this to produce and I am entitled to a margin of profit."
I think the milk costings commission was the first scheme I introduced when I became Minister. I had for years, as Deputy Corry pointed out, endeavoured to have costings carried out regarding beet. Beet was the only crop in respect of which costings could have been carried out because we had a guaranteed acreage, market and price for it.
When I suggested this costings committee at first I thought that we would be able to have a scheme whereby we could give representation to every person involved in the production and in the consumption of milk. Consequently I set about the matter by having the milk producers, whether producers who sent milk to the creameries for the manufacture of butter, liquid milk producers or producers of milk who were making farmers' butter on the farm, represented.
In addition to that I wanted to give representation to the consumers so that when the costings commission made their report there would not be any criticism from anybody that they did not get representation or that they were not getting fair play. Consequently I suggested a committee of eight giving representation to the consumers, statisticians and my own Department which is responsible for Government policy. In addition to that I gave representation to the liquid milk producers and to the creamery producers.
I might say that I did not get the co-operation I needed. I asked I.A.O.S. to have regional meetings called all over the country for the purpose of giving me nominees to represent the milk producers on that committee. The I.A.O.S. failed to get these nominees to represent milk producers. Eventually it was necessary for myself to have the meetings called. The meetings were called a second time and we got the representatives. After some time the committee was formed and it set to work. It held many meetings and many items were discussed. Procedure was laid down. Hand in hand with that the organisation was being built up. I might say at this stage that, so far as the Government or the Department were concerned, we had no hand, act or part in arriving at the cost of production. We set up an independent body—independent of the Government—which was to report to us the cost of producing a gallon of milk.
I thought the Minister said he had his own Department represented on the body?
Mr. Walsh
Yes. It was an independent body even though there was a representative of my Department there representing the Government. As far as the Government or the Department were concerned, there was no direct contact with that committee.
Did you second the officers of your Department to it?
Mr. Walsh
No, it was not necessary.
Then words have lost their meaning.
Mr. Walsh
He had no instructions from us. He was put there as a representative.
Of whom?
Mr. Walsh
Of mine.
Black is white.
Mr. Walsh
During the years I said the meetings were held the organisation was built up and it was within the last couple of weeks that they arrived at a stage beyond which they could not go any further because of the insistence by some of the producer-representatives to have included managerial costs and interest on capital.
What direction did you give you representative?
Mr. Walsh
My representative got no direction from me.
You ought to be ashamed of yourself.
Mr. Walsh
He was to use his own intelligence, which he did.
He was representing you.
Mr. Walsh
At this stage I would like to say they had their meetings. I was informed of a breakdown in the committee some time ago and I should like to read for the House the correspondence that passed between the committee and myself.
Did the Minister say he was told of this breakdown some time ago?
Mr. Walsh
Yes.
Might I ask then why, when I asked him this question a fortnight ago, did he not indicate that there was a breakdown?
Mr. Walsh
Because it was since then that the breakdown occurred.
I take it there is agreement to read this correspondence?
Mr. Walsh
In a letter dated 6th November, the chairman of the costings committee said:—
"I very much regret that I have to inform you that the above committee have found it impossible to continue with the investigation into the costs of milk production. The committee have found it impossible to agree as to whether or not provision for interest on capital and regard for managerial services should be included as an element of cost of production.
"All my colleagues on the committee are equally sorry that the investigation cannot be completed."
I, too, was sorry that there was a break on this question of managerial reward and interest on capital. There are countries where these are included in costings and other countries where they are not. I felt that it was possible to get over this difficulty, which has arisen, that there was a way out, and I forwarded my suggestion in a letter to the chairman on 12th November, in which I said:—
"I regret to learn from your letter of 6th November that the Milk Production Costings Committee find themselves unable to continue their work because of disagreement about the question of including provision for interest on capital and reward for managerial services as an element of cost of production. I have been considering whether there is anything I could do to help the committee to overcome their difficulty, as I am anxious that this investigation, which is of such importance to the producers and to the formulation of Government policy, should be completed. I would, therefore, like you to put the following proposal before the committee.
I suggest that the committee arrange that the report to be transmitted to me should contain two sets of figures, one including an appropriate calculation for interest on capital and managerial reward and the other excluding such calculation. In transmitting the report members of the committee would, of course, be free to make such comments as they may think fit.
This, I think, would be a prefectly fair way of dealing with the matter and I should be glad to hear whether the committee find themselves able to continue on this basis."
That was my suggestion to them. In addition I had a conversation with the chairman. I asked him to recall the meeting, and he did. The committee met again yesterday and were unable to agree——
Why?
Mr. Walsh
——to send the two reports, one with the calculation for managerial reward and interest on capital included and the other without it.
Why could they not accept your proposal? It is a most reasonable proposal.
Mr. Walsh
One was above the line and the other below the line.
Why did they not accept it?
Mr. Walsh
I felt it was the fairest way for the people concerned. There would be one above and one below and it was then a matter for the Government and for me to take into consideration every factor in determining the price of milk.
Why would they not accept it?
Mr. Walsh
They have not accepted it.
Tell them to take a running jump at themselves; tell them to accept it and not to be damn fools.
Mr. Walsh
I should like to read the last letter from the chairman of the committee which I received on 19th November as follows:—
"I wish to inform you that I placed before a meeting of the Milk Production Costings Committee to-day the terms of the proposal conveyed in your letter of the 12th instant, with a view to overcoming the difficulties of the committee on the question of interest on capital and reward for managerial services. I regret, however, that the producer members of the committee felt unable to accept the proposal to forward to you a report containing two sets of figures as suggested in your letter. It will not, therefore, be possible for the committee to continue with the costings investigation."
I very much regret that the producer members of the committee did not see their way to agree with my suggestion because, as I have already said, if they had done so, when the reports came forward to me, I would have one with managerial costs and interest on capital included and another with that calculation left out. In the determination of the price of milk, it would be my duty and the duty of the Government to take into consideration every factor, whether the calculation was in or out, when that price determination was being made. For that reason, I regret the attitude of the producers on this occasion, because, as I have said on previous occasions, I believe that costings constitute the Magna Charta of the farmers to-day.
I believe that costings are all a cod, but let the Minister not start attacking these people.
Mr. Walsh
There are many things the Deputy believes to be a cod.
Ask them to reconsider, but do not eat them in public or you will make it impossible for them.
Mr. Walsh
There is no hope of getting anything done.
Ask them again to have sense.
Mr. Walsh
I have asked the committee on two occasions to compose their differences and they have refused.
The third time is lucky, but do not eat them in public or you will make it impossible for them to do anything.
Will the Minister get full co-operation in his request, if he does ask them a third time?
Certainly. I regard costings as a complete cod, but if the Minister has asked these people to conduct a costings inquiry and they agreed to do it, they should comply with his request to give him two reports, one containing the disputed costings and one without them.
Mr. Walsh
I am glad I have the support of the House in this matter, because I believe it is one thing which every farmer in the country needs and desires, particularly when he has to negotiate a price, whether with the Government or with consumers. He must know when negotiating that price what his cost of production is. Once that has been determined, he is as much entitled as any other section of the community to get a fair margin of profit for his labour and his capital investment. The organisation is ready to work—it is there. We shall have to suspend it to-morrow, but I have taken the further liberty of asking the farmers who have already consented to participate in the work to continue to do so. I am circularising every one of them and if a majority declare that they wish to have the costings carried out, my Department will do it, but I would prefer if that were not the position. I would prefer it if we could retain the independent costings committee—a committee independent of the Government and of my Department, with one of the most independent men in the country, a most eminent man, as chairman, who is prepared to carry out the costings inquiry—which I set up last year.
The Dáil adjourned at 11 p.m. until 10.30 a.m. on Friday, 21st November, 1952.