What does the Minister intend to do about butter boxes?
Committee on Finance. - Dairy Produce (Price Stabilisation) (Amendment) Bill, 1956—Report and Final Stages.
This is one of these queer situations that arise out of the whole consequences of fixing a rigid price structure. As the Deputy will see, the brief required to give the history and background to this runs to three foolscap pages. It arises out of an order made in 1942 which slightly altered the butter price structure and the various prices of butter when sold by creameries and wholesalers in large and small lots.
By this Order of 1942, the refundable sums of 9/- and 10/- per cwt. on butter, respectively, were fixed, so that, coupled with the prohibition on the sale of empty boxes otherwise than to wholesalers and creameries, the boxes would be returned to the creamery. The difference between the 9/- and the 10/- was to compensate the retailers by 1/- per cwt. because they were no longer permitted to retain the two empty 56 lb. boxes. The butter price itself also included an increase of 1/- per cwt. in the wholesalers' margin to compensate them for having to collect the empty boxes from retailers for return to creameries. Coupled with this, the creameries were permitted by special regulations made under the Dairy Produce Acts to reuse the returned boxes for the packing of butter, provided that the boxes were clean and sound and had, prior to being so used again, been thoroughly steamed. In practice boxes are, on average, used by creameries about three times and, as new boxes now cost about 5/6 or 6/- each when made up by the creamery, they represent about 4/- per cwt. in the cost of creamery butter. To provide now that such boxes should only be used once would, therefore, have the effect of increasing the cost of packaging of butter. As I mentioned on the last day, the cheaper fibreboard box, which is allowed to be used only once, was introduced so that when that package comes into general use, the reuse of timber boxes could be dispensed with.
In all these circumstances, to divorce the reuse of boxes from the butter price structure would cause considerable upset in the trade. If, as suggested by Deputy Aiken, creameries were to place their own value on boxes to ensure their return, individual creameries could charge different refundable prices for the boxes. As the Butter Marketing Committee is the sole purchaser of creamery butter for the Dublin area and the sole exporter of surplus butter the whole business would become, in practice, unworkable.
In regard to butter sold by the committee to wholesalers in Dublin, the committee would have to identify the boxes in each consignment so that the appropriate charge on boxes can be passed on to the wholesalers. As butter is accumulated by the committee and held in cold store for periods varying from a few weeks to six months or more, this would be a task of considerable magnitude and would disrupt the present easy flow of the trade. As regards surplus butter exported by the committee (the boxes involved not being returnable by the purchaser on the export market), it is essential that a single predetermined charge for the boxes should be arranged so that an inflated charge made by creameries for the boxes would not result in reducing the price return to the committee on the export of the butter. In the latter connection it should be explained that at the time that the butter is sold by creameries to the Butter Marketing Committee, it is not known what particular lots, if any, will be exported. For example, if a creamery were to charge 20/- for a box, intending to refund the amount when the butter is sold on the home market and the box returned to the creamery, and it subsequently transpired that the particular box of butter was exported, the whole 20/- would have to be borne by the Butter Marketing Committee, any losses incurred by which are borne by the Exchequer.
In these circumstances, much as I sympathise with Deputy Aiken's anxiety in regard to the retention of unnecessary rules and regulations, it is really essential to retain Section 6, but I will give the Deputy the fullest undertaking that as soon as circumstances permit the reintroduction of the rule prohibiting the use of a timber box more than once, the powers which I am asking for under Section 6 of this Bill to make regulations in regard to the sale of such boxes will no longer be utilised. If it would be an ease to the Deputy's mind, or if he asks me to do it, I will undertake to bring in an amending Bill to delete that section from the code, if and when it is possible for me to require creameries to use such wooden boxes no more than once in future.
I must congratulate the Minister on his eloquence in support of governmental interference with the ordinary processes of trade. Some of the arguments that he advances for keeping on this power at the present time do not hold water. The complication of the Butter Marketing Committee would not nullify the system altogether whereby the shopkeeper who purchases butter for sale in the home market could be fined if he did not return the box to the butter marketing organisation or to the creamery, and a fine it would be if he were invoiced with the box at twice its replacement value. I think it could be done and that the box account would not be too complicated. However, if the Minister insists on getting these powers and on having all these inspectors to do this job, I am afraid we shall have to surrender.
When I tell Deputy Aiken the Butter Marketing Committee gets on an average 540,000 boxes of butter per annum, perhaps he will sympathise with me in my desire to deliver them from the necessity of docketing the price of each individual box amongst all those boxes.
I would like to ask the Minister just one question. Could the Minister give the House any information as to the probable quantity of butter for export in the present year? I do not know whether he would like to give that information now. Would he also tell us what bargain he hopes to be able to make?
The answer to the Deputy's question, with as high a degree of precision as I can tender at this time, is that we will have between 3,000 and 4,000 tons of butter to export. I know the Deputy will not require reassurance that it will procure the highest price it is humanly possible to procure for it.