Imposition of Duties (Confirmation of Orders) Bill, 1958—Committee Stage (Resumed) and Final Stages.

Question again proposed: That the Schedule be the Schedule to the Bill.

Mr. Dillon

I want to comment on the fact that this Schedule covers a number of commodities, most of which impose a charge on the agricultural community in that they have to pay costs. I have advanced to the House on divers occasions the proposition that an export is, from the point of view of the national economy, substantially the same as a protective tariff. That proposition has been challenged. I want, therefore, to raise the question in respect of any one of these commodities. Let me take it with special reference to No. 91 of 1957—an increase in the duty on certain agricultural implements and the extension of the scope of the duty.

That duty means that, in respect of certain agricultural implements, the manufacturers make the case that if they have to sell those implements at the same price as they could be imported from world markets, there will be no margin of profit left to pay the wages and meet the costs of production in this country. The Minister for Industry and Commerce accepts that argument and imposes the tariff or raises the existing rate of tariff, thereupon enabling the producer of that agricultural implement to charge the world price, plus 10, 15 or 20 per cent.

In the case of these agricultural machines, that additional charge amounts to approximately £5 per machine. When the farmer goes to buy that machine, whether he regards himself as a consumer or a taxpayer, the fact is that he pays £5 more than he would otherwise have paid—but no more is heard of it. Once we have passed this Imposition of Duties Bill, that charge will continue to be levied on every purchaser of an agricultural machine. Although there is no legislation recurring in Dáil Éireann, the charge continues to be levied. So the manufacturer is kept in lucrative occupation and the operatives in the factory retain trade union rates of wages.

When that farmer uses that machine to produce merchandise for export, he finds that when he seeks to sell his product in the same market whence the competitive farm machine has been forbidden to come, he can get only the world price for his product and there is no machinery available to this House which, by way of imposition of a tariff, can provide a silent subsidy for him. The only way we can make him competitive, while retaining a tolerable standard of living in his own country, is to appropriate money to be paid out by the Exchequer in relief of the price which he has to accept on the foreign market.

Now, I have seen it argued, very recently, in certain industrial publications, that this is not a fair comparison, because the domestic market is, in effect—whether by tariff or veterinary regulation or otherwise— preserved for the agricultural community and they are already enjoying that benefit which is strictly comparable with the tariff protection provided for industry; but the proposition that he should get an export bounty is something quite separate and over and above anything that industrial production has enjoyed or sought to enjoy.

That constrains me to say that which it might be better not to dwell upon at too great length. I am satisfied that there are industries in this country at the present time which are charging for certain commodities 30/- to 36/- in Ireland, while they dispose of the same commodity in foreign markets at 20/- to 21/-; and that, with the consent and approval of the Minister for Industry and Commerce, price levels are maintained here far in excess of the price levels accepted for the same commodities in foreign markets, thus ensuring that these industrial products not only have the protection which secures the domestic market for them, but a further protection which secures the domestic market for them at a price level which enables them to sell surplus production at a lower price abroad.

If that is the settled policy of the country, all I stipulate for is that there should not be discrimination against the agricultural exporter—because if there is, he has a legitimate grievance and sooner or later, if that grievance is allowed to continue, the farmers will react to it by withdrawing from the export market—which I consider would be a catastrophe.

I said here before, and I want to say again, that I believe the farmers are a reasonable body of people. If they are asked to take their fair share of a common burden of which everybody else in the community is bearing a share, they will be prepared to do it; but if you put to them the proposition that the industrial producer is guaranteed his profit, guaranteed his trade union rate of wages and guaranteed not only the domestic market but facilities for disposing of his surplus output at remunerative prices in foreign markets, by the device of marrying the foreign to the domestic price, then the agricultural producer will demand from the community the same support. If he does not get it, I believe he has a legitimate grievance and the consequence of that legitimate grievance will be a reduction in his output, with catastrophic results, not alone for agriculture but for industry and employment in the whole country, whether it be town, city or the countryside itself.

Minister for Industry and Commerce (Mr. S. Lemass)

It seems to me that all the observations which we have heard from Deputy Dillon are based on two completely wrong premises. It is not correct that the prices of agricultural machinery produced in Ireland are higher than the prices at which that machinery could be imported from Great Britain. Indeed, we have an undertaking from the manufacturers concerned that they will maintain their prices at the prices at which comparable machines can be imported from Britain—unless some exceptional circumstances should arise, in which case they would seek my approval before effecting an alteration in that situation. It may be that some continental agricultural machinery could occasionally be imported at less than British prices, but I have no information about that. The present situation is, however, that most of the agricultural machines used in this country are available to Irish farmers at or below the price at which similar machines could be imported from Britain without duty.

The Deputy wandered into a very wide field when he talked about industrial producers in this country selling their products abroad at lower prices than they could obtain in Ireland. That, I think, could be regarded as the classical method by which industrial exports expanded in every country in the world. If these firms cease to sell abroad at whatever price they can get there, it does not mean that the Irish producer will get the products at a lower price. Possibly he would have to pay a still higher price for them.

In the normal type of industry which sells the bulk of its production in the home market and exports only something less than half its output, the aim would be to recover the normal overhead expenses upon home market sales and to seek the trade in the more highly competitive markets abroad by eliminating these charges when determining its selling prices. As I said, if the export sales do not materialise, the overhead charges have still to be recovered anyhow, and if they have to be recovered upon a lower output intended for home market sales only, then the prices in the home market would tend to increase.

Even though, therefore, it is true that in some cases firms sell abroad at a lower price than at home, the effect of the extension of their production, which is involved in their success in obtaining export sales, is to reduce prices at home as well, and I would not regard that as an undesirable development. Indeed, I doubt if there are any firms in this country which are in a position deliberately to subsidise export sales by increasing prices at home. In most industries, there is competition on the home market and the price level which operates is determined by the intensity of that competition.

I think it is undesirable to spread this idea that there is, in any way, discrimination in policy between agricultural and industrial producers. It is not true. Indeed, it would be far easier for me to show that agricultural producers for export are getting from the State a far greater degree of assistance than any industrial producer is getting, than it is for Deputy Dillon to show the contrary. Regarding products like bacon, butter and wheat and other commodities which are produced in exportable surpluses, where the export price is lower than the domestic price, the producer here is getting not merely the benefit of protection but also the benefit of State subventions to export sales. In the case of butter, bacon and wheat, there is complete prohibition on import; the home market is absolutely reserved for the local producer.

The protection given to these producers is as complete as in the case of any industrial production, and more complete than in the case of most. Over and above that, there are these arrangements under which deficiencies realised on export sales, because of the lower prices available on export markets, are recouped in whole or in part from funds to which the Exchequer contributes. I recognise at once that in the case of many agricultural products the volume of production is not within the control of the individual producer and that, therefore, export surpluses may arise which cannot be checked in the same way as an industrial firm, which, finding it is losing on export sales, may be able to limit its activities in that field and avoid losses.

It is because of that, that the practice of giving subventions from State funds to meet the losses on export sales of agricultural producers can be justified. There is, however, no case whatever for the argument that there is any more preferential treatment or that there are more liberal arrangements devised for industrial producers than those which apply to agricultural producers. The contrary is the case.

Mr. Dillon

I do not suppose the Minister or myself will ever agree on this general theme. He has his views and I have mine. There is one specific matter arising in connection with this Schedule. When the previous Government were in office, there was a conference between the National Farmers' Association on the one side and the Taoiseach, the Minister for Industry and Commerce and myself on the other. At that conference, it was agreed that certain tests and experiments would be carried out and that the National Farmers' Association would be accorded an opportunity, at a future date, of making further representations as to the question of whether the domestic manufacturers had redeemed their undertaking to make such reasonable adaptations in their mowing machines, ploughs and so forth, as might be bespoken, and on the question of whether the quality of the machinery came up to the specification claimed by the manufacturer.

I want to suggest to the Minister that that undertaking should be redeemed now, even if the Minister chooses to change the policy thereafter and to say to the National Farmers' Association: "This redeems the undertaking given by our predecessors, but as from now on I will adopt a different policy." There is no doubt whatever that the imposition of that duty was a consequence of an arrangement to which there were two parties, one of whom was the National Farmers' Association, and I think that the undertakings given to them then should be redeemed, whatever the future may provide.

Mr. S. Lemass

There is no question about that. Indeed, quite recently I had discussions with the manufacturers of agricultural machinery and I have ascertained from them that they are only too willing to enter into discussions with the representatives of farmers' organisations and to consider any observations they may wish to make regarding the design, quality or price of their products. There was, as the Deputy knows, a test carried out under the auspices of the advisory committee set up by the previous Government in respect of ploughs. That committee is available to carry out similar tests, if they are considered necessary.

I have, with the consent of the Government, relieved Dr. Beddy of the obligation of acting as chairman because of his multitudinous other duties, but a chairman will be appointed in his stead by the Minister for Agriculture. If at any time there is a question of carrying out further tests and having a report from the committee, there is the problem who is going to pay for them. That is a detail which was overlooked when the committee was set up originally. If there is to be a question of further tests, some arrangements will have to be made to defray the cost. But I do not know that that is entirely a matter to be solved by means of tests by Government-appointed committees. I see no reason why representatives of farmers' organisations and machinery manufacturers should not get together and stay in continuous contact with one another to consider all questions that may arise regarding suitability in respect of quality, design and price of Irish agricultural machinery.

I have ascertained that so far as the machinery manufacturers are concerned they are only too willing to have an arrangement of that kind and I see no reason why there should not be a similar willingness on the side of the farmers' organisations. There have been acrimonious comments appearing in farmers' journals concerning the machinery manufacturers. I have urged them not to add any fuel to that fire by engaging in public controversies with those organisations which are representatives of their customers. I do not think that is good policy and they agree it is not good policy.

I believe that advantage is to be gained by the whole country, both by the farmers and the manufacturers of agricultural machinery, by an arrangement under which there is regular consultation and agreed methods for the investigation of complaints regarding any type of machinery and for consideration of questions of design in order to have it brought about that the machines produced here will be those best suited in every respect for the needs of the agricultural community. I believe that method of consultation will work satisfactorily so long as the general policy of securing the maximum production of agricultural machinery within the country is accepted.

Question put and agreed to.

Title agreed to.

Bill reported without amendment.

Dáil Éireann debate -
Friday, 21 Mar 1958