What are the facts? In January of this year, the adverse balance of trade was £4.86 million, compared with £11,000,000 in January, 1956. I think it is a fair calculation to say that our average invisible exports amount to about £60,000,000 a year. They do not, of course, accrue to us in even quantities each month, but for the purpose of balance of trade calculations, it is a useful idea simply to estimate these invisible exports at £5,000,000 per month. If we do that, we are entitled to say that in the month of January, apparently, the balance of payments would be favourable. When we come to the month of February, we find that the adverse trade balance has declined from £10,000,000 last year to £5.18 million this year, giving us again, probably, an even balance for the month. When we come to March, we find it has declined from £7.47 million to £4.48 million this year, giving us probably a credit balance in that month. Again, when you come to April, you find that the adverse trade balance declined from £6.78 million to £2.3 million this year.
All that would be materially mitigated in its value if it were related exclusively to a reduction in imports, but if you look at the export figures you find that in these four months to which I have referred, in January, the exports rose from £6.8 million to £10.7 million; in February, from £7.6 million to £10,000,000; in March, from £8,000,000 to £11,000,000; and in April, from £7.5 million to £10.9 million. Those figures are encouraging, but I do not think they are sufficiently encouraging to justify the line of country which the Government is at present pursuing, that is, removing all restrictions on imports of a luxury character, because at the end of this year, if these imports are allowed to grow indefinitely we might find ourselves in difficulty again.
Some Deputies seem to imagine that this procedure of limiting unnecessary imports is evidence of exceptional difficulty. As far as I know, there are very few countries in Europe, or outside it, who are not doing exactly the same thing. What is the alternative? The whole object of having foreign assets available is to preserve for ourselves the right to determine what categories of goods are to be restricted in imports, if our exports are not sufficient to finance the purchase of whatever our own people chose to want or buy. If we do not take steps to place all the restrictions we think appropriate and where our external balance declines to the point that we can import only that which we can pay for, we may find ourselves in the position that we are not exercising the choice at all, but that somebody else is.
I want to ask the Taoiseach again does he think it sane to stimulate imports of motor cars, radio sets and television sets in a year in which he considers it right to recommend to this House that we should increase the price of butter to our own people by 7d. a lb. and increase the price of the 2-lb. loaf by 4d.? It does not seem to me that he can possibly reconcile these two procedures. That is my principal difficulty on this Estimate on which general Government policy is discussed. I detect a dichotomy of mind in the Government which so far the Taoiseach seems to be unable to pull together, but the people are entitled to know which side of the dichotomy is to prevail.
I want to turn again to the statement made by the Minister for Lands in regard to housing. I think he is entirely wrong in his belief that the house building programme was embarked on primarily to give employment. The house building programme was embarked upon because those of us responsible for Government determined that it was a right and proper charge to put on the resources of the nation to take the people out of slums, urban and rural. If we had to do it again, then I think we should do it.
I remember a debate in this House 15 years ago when it was argued that you could not afford to do it. I remember the late Deputy Alderman Tom Kelly speaking from somewhere on that side of the House and describing how in tenement houses bugs were falling from the ceilings into the babies' cradles and how muslin had to be stretched across the cradles to prevent the bugs falling onto the babies' faces. I remember saying that whatever the cost and whatever the subsequent difficulties that would confront us we should remedy that situation in town and country.
We did it, not for the purpose primarily of creating employment but for the purpose of securing for our people a minimum standard of comfort without which we thought our people should not be expected to do; but what we have got to face is that, so far as rural Ireland is concerned, the job is nearly done. There are many towns in rural Ireland now in which we have all the houses we want. The progress in our cities has been very substantial. I remember when I was a child in this city the area down around Marlboro' Street and the area up in Meath Street and the area around the Coombe and realise what is there now as compared with what was there 40 years ago. Deputies who did not know the position and who were not familiar with it do not realise the distance we have travelled in resolving the housing problem.
I freely concede that in the City of Dublin, the City of Cork, the City of Limerick and other cities, work still remains to be done. But here is a danger Deputies will overlook: you must have some regard (1) to the resources available to you and (2) to planning your programme so that you do not go forward at full speed, finish the job and then have to inform a vast army of working men that there is nothing more for them to do. We have got to plan our programme therefore with both those issues in mind.
Mark you, we had to take exactly the same decision in regard to rural electrification. We could have finished rural electrification. We could have completed and finished the job by the end of 1959, but we deliberately elected not to do that because if we had gone on blazing away straight ahead and finished the job by 1959, on 31st December, 1959, we would have had to tell the entire staff: "You are out of a job. There is nothing more for you to do. The job is finished." When one proceeds, therefore, towards the end of a capital undertaking of that kind, unless one is mad, one proceeds to taper off and plan and know where one is going.
I cannot make out what scheme, or what plan, or what programme the present Government has in mind. Perhaps the Taoiseach will say he has not had time to formulate one so far, but, if he has not, I think in the interests of the country he would be well advised to tell his Ministers to keep quiet until they have arrived at some agreement, and not be racing around the country, one of them preaching woe, desolation and restriction, other charging around and announcing that we cannot live another hour without the installation of a television station, and yet another removing levies from motor cars, television and radio sets and urging everyone to resume, on an unrestricted scale, instalment purchasing. If we are to have unrestricted instalment purchasing, then everybody can buy anything he or she wants. Anything on which they can put down a deposit, let them go out and get it. But that means imports, and that implies unrestricted imports. At the present time, that course is not prudent and what I am afraid of is that, if it is pursued, it will create an entirely false mentality in the country.
I am perfectly certain that if we proceed intensively to develop the agricultural industry on the lines on which we have been going, we can build up an export volume which will permit, in due course, any imports our people require and, in the interim, all the essential imports that our people can reasonably require in existing circumstances. Now one of the remarkable new catchcries of Fianna Fáil is that they are going to develop markets. I should like to know what do they mean by that? It is a dangerous kind of talk for the reason that it creates in the minds of a lot of farmers a strong impression that, if they produce more, there is no market in which to dispose of it. That is all cod. We can double the output of cattle, sheep, pigs and butter and dispose of it all without the slightest difficulty, at a price. But now we have got to make up our minds one way or the other. Do we want increased production or do we not? I have no doubt at all that the survival of this country depends on increased production and I have no doubt at all of our ability to market it all.
I should like to remind Deputies, however, of this fundamental economic fact because it is the key to what must seem my excessive optimism. Agricultural production here is at present consumed roughly as to one-third on the farm, one-third in the country by people who do not live on farms and one-third by exports. Now the truth is that up to the time the Government took the subsidy off butter and bread, our people were consuming about as much agricultural produce as they wanted to consume. Therefore, if you could increase output practically the entire volume of that increase would pour into our export market. If you could increase output by 50 per cent. you would increase exports by nearly 150 per cent. because your increased production would go into the export market. That is something a lot of people forget. If only people would realise that in our economic circumstances our people are to-day the best fed people in the world, or certainly were, up to the removal of the subsidies. We had the distinction of appearing in international records as providing for our people a higher level of nutrition than even the United States of America, evaluated in terms of calories, which is the international standard. In our circumstances then, increased output goes on to the export market.
The question of getting markets abroad is a national question. If we want to increase output, and I have long experience of this here and abroad, let us face this fact: you can talk till the cows come home, you can propagand till the cows come home, you can organise, you can exhort, you can persuade, you can even try to compel, but there is only one way effectively to get increased output from the land and that is to say to the farmer, who knows and works the land: "If you produce the stuff, that is the price you will get for it," and there is not any other way to get increased output. Some people will say that that is all very well but what are we to do if the price the farmer demands is such that we cannot get it in any foreign market where we have to dispose of the surplus?
I remember once asking a very prudent economist this question: Of what value to the national economy is a subsidised export? He looked at me for a moment and said: "Just about the same value as a protected industry." Of course, the more you think of that aphorism the more profoundly true it is. But there is a difference, and here is where it is difficult to make the farmer's case. You give an industry a tariff. Incidentally, I notice that the Minister for Industry and Commerce has been distributing tariffs very liberally in the recent past. I see a tariff clapped on galvanised iron that every farmer has to use to roof a shed or farm building. I see another tariff clapped on forks that every farmer has to use in digging beet or anything else. I see another tariff clapped on farm machinery. All these tariffs do not appear in the Exchequer returns. All these tariffs do not show any money coming in and money going out. They short-circuit the normal procedure of taxation. All these protected industries collect their subsidy without any reference to the Exchequer at all; they take it from the consumer by putting it on the price of the finished article.
The farmer, if he produces butter and is paid at the rate of 1/7 a gallon for milk has to face and defend the appearance in the Book of Estimates of £1,000,000 or £2,000,000 or £3,000,000 export subsidy, so that he is confronted with the situation that the better he does, and the more he produces, the louder the row in the Dáil will be about the subsidy required to sell his product on the foreign market while at the same time he is paying a tariff on cans, on farm machinery, on galvanised iron, on his bucket, on his boots, on his clothes, on everything he uses, everything he buys, about which there is no talk at all because it is not measured; it is incorporated in the price of the product that the farmer has to buy.
All the tariffs do relatively little to help the balance of trade. Why? Because 90 per cent. of the industries established by tariffs in this country are secondary industries, all the raw materials of which must be imported. In so far as the balance of trade is concerned, these secondary industries established here under tariff protection do nothing. All the raw materials they use are brought in. But, every cwt. of butter that is sent out helps the balance of payments.
What I want to warn the Government of is this: There is only one way in which you can get the extra production without which this country goes bust, because the extra production we want is extra production that will operate on the balance of trade and provide us with the wherewithal to pay for imports that we require, and that is to give the farmer a remunerative price for his output with primary emphasis on that part of his output which can be exported and for which there is a market and which is preeminently suited for production in our circumstances.
What are our circumstances? Our circumstances are these. We have an equable climate with a variation of not 20 degrees Fahrenheit from one year's end to the other. We have 42 inches of annual rainfall equally distributed over the 12 months of the year. Do Deputies realise that there are only two other places in the world that have what we have here, a relatively small area in the centre of England and a small area in the State of Oregon in the United States of America? They are the only two other areas in the whole world that have that temperature and that even distribution of 42 inches of rainfall spread over the whole year. Instead of bucking the fact that we have that infinite benefit at our disposal, we should capitalise it and, if it indicates anything, it indicates live stock and live-stock products.
Whether we all agreed with it or not, I do not think it will be denied that for the last nine years the agricultural policy of this country has been heavily orientated in the direction of increased live-stock production. Is not that true? What I am terrified of is that there will be some departure from that and it is for that reason that I want to direct the attention of Deputies to the results of it.
In the first three months of this year we exported 285,162 cattle from this country, for which we received £15.164 million—in three months. In the following month of April we exported well over 50,000 cattle and in the first fortnight of May we exported nearly 20,000. The last date on which the census was taken was in June, 1956. That is the last date of which we have information and on that date we had more cattle on the land of Ireland than we ever had in our history before.
We had increased the sheep population from 2,000,000 to 3,500,000, and I expected that we would have a kind of catastrophic slump in the market for lamb consequent upon the unilateral action of the French Government recently in stopping our exports of lamb, but I am happy to see that the British market seems to be taking up what we have to sell, which is a great blessing, and which is a very valuable indication of what that market means to us in comparison with the market in France which is liable to close at 24 hours.
Admittedly, our efforts to expand the pig industry have received a check. It is a check which we will surmount and it is a problem which has confronted other countries.
The heart of this matter probably is the butter industry. I am not going to argue any more about the removal of the subsidy. I think it is wrong but we have had that out before and there is no use arguing any more about it. It is done and we cannot undo it, but you are going to face, I hope, and I should like the Taoiseach to say that he hopes, larger and larger exports of butter in future. I should like to communicate to the farmers of this country —and here is one of the most precious keys to increased output from the land —the assurance that we regard exports of butter and all that they bring with them as something well worth maintaining and that we will see that the fluctuations of the foreign market are not allowed unrestrictedly to bear on them and that if the farmer continues to produce milk and improve his methods of production he is guaranteed against any slump in the price of the commodity he is producing.
If we can do that I can see coming out of it an increasing number of live stock, an increasing number of pigs and increasing exports in both these cases. On that I would hope to see, and I am perfectly convinced I will see, improvement steadily maintained in grass land. On that improved grass land I would expect to see an increase in the number of cattle, cows and sheep with the consequential exports that would flow therefrom.
At the same time, we have got to face the fact that the Government ought to make up its mind that there should be an end to the practice of raising the costs of the raw materials of the agricultural industry. I succeeded after great difficulty in having the tariff removed from superphosphates. I hope and pray it will never be put back again. The Government ought to announce now, and I believe it is the only means by which we can hope to develop the economic life of this country, that it recognises agriculture as the main hope of expansion in the future; that it guarantees to the industry a remunerative price for agricultural produce, well and economically produced, and that as its contribution to the remunerative character of the price, it undertakes that there will be no further imposition on the raw materials of the industry.
Let us remember this. What the farmer is concerned with is not primarily the price; it is the profit, and the profit is the difference between what he gets for his product and what it costs him to produce. We can contribute to his profit in two ways, by assuring him of a reasonable level of price and at the same time taking every precaution we can to reduce the cost of his raw material to the lowest possible figure. If there is any departure or exception from that fundamental principle, that we charge ourselves to get for him his raw materials at the lowest possible figure, as certain as we are standing in this House that exception will be continually expanded in order to give to others the advantages which the farmer ought to enjoy. Any time the farmer enjoys a passing phase of relative prosperity it will be said that he can afford to pay more so that others will have the benefits he ought to have and without which we will not get the extra production.
I want to present this, not on the basis of a plea for the agricultural community, but on a cold, matter-of-fact basis—that we cannot survive if we do not get the extra production which providentially we know would go into exports and that there is no means available to us to get that increased production except by reassuring the agricultural community that it will be remunerative to them. Unless we face that, accept it, and act upon it, I want to warn the Taoiseach that whatever his Ministers are saying, and God knows they are saying enough, this country will go bust.
I hope to make it clear that a great deal of the talk about marketing is illusory. It is perfectly easy to market all the cattle, sheep, and pigs that we are capable of producing but it is true that is subject to the limitation of marketing them at a price. Possibly marketing research methods might result in our realising in external markets a better price for those exports than we would otherwise get but, if we do, I think that must be in relief of whatever burden the community may otherwise be called upon to bear, in meeting the costs it has to bear in getting the external markets. There is no use in telling farmers that £250,000 is being spent on getting new markets. They will not believe you. They will not produce for that kind of amorphous, ruinous hope. They will produce more if they know they will get paid for what they produce and nothing else will make them produce more. We ought to realise that a subsidised export is just as good as a protected industry.
We have more cattle on the land than we ever had. We have as many, or more, sheep than we ever had. I do not think anyone will deny that the quality of our grass land is steadily improving though there is still room for vast improvement. I have every hope that if we can pursue consistently a sane policy the Minister for Industry and Commerce will be proved to be quite wrong. In June, 1956, we had 4,534,000 cattle on the land of Ireland. That is the greatest number of cattle we have had in our recorded history. We had 1,187,000 cows and 107,800 heifers. We had over 1,000,000 cattle of one year of age and under and we had 1,000,000 cattle over one year of age and under two years of age.
