Dáil Éireann debate -
Wednesday, 23 Jan 1963

Vol. 199 No. 2

Nítrigin Éireann Teoranta Bill, 1962—Second Stage.

Minister for Industry and Commerce (Mr. J. Lynch)

I move that the Bill be now read a Second Time.

Its purpose has been outlined in the explanatory memorandum and I feel that there will be general agreement that the Bill is not a document of any great complexity. In fact, the provisions of the Bill are generally identical in effect, if not in wording, with those of the Acts of the Oireachtas dealing with the financing and control of the other State concerns such as the Electricity Supply Board, Irish Steel Holdings Limited, Bord na Móna and Min Fhéir Teoranta. In the course of the detailed statements which it is my duty to give to the House on the various sections of the Bill, I shall, for the convenience of Deputies, make reference to the corresponding provisions in the existing legislation in relation to State companies.

The main purpose of the Bill is to provide for repayable interest-bearing advances from the Central Fund to enable Nítrigin Éireann Teoranta to undertake on behalf of the State the establishment at Arklow of a nitrogenous fertiliser factory. I consider it desirable to stress the fact that all moneys advanced to the company will be repayable with interest, on the lines of advances made to the Electricity Supply Board and Bord na Móna. There will be no grant or subsidy assistance for this industry and there will be no tariff or quota protection in any shape or form.

In the matter of placing before the House all the information which, at various stages of the development of the project, I could disclose without jeopardising its economic and orderly planning, I think it desirable to refer Deputies to the Dáil Debates of 15th November, 1961, 21st February, 1962, 17th May, 1962, 26th July, 1962 and also 31st October, 1962.

It will be found that full information was given on these occasions about the selection of the site for the factory, the nature of the products, the quantities to be manufactured of the different products, the raw materials to be used and the fact that there would be no protection or subsidy.

Deputies generally and, in particular, those Deputies who are directly concerned with the business of industry and commerce will understand that industrial concerns engaged in the negotiation of a contract involving some millions of pounds, in relation to which it is known that there is keen competition between international consortiums, cannot be required or expected to make a public disclosure of the details of such negotiations.

I can give the House an unqualified assurance that, since the inception of the State, no industrial proposal has received a more thoroughly searching examination than that to which the Arklow project has been subjected. The decision to seek binding tenders for the establishment of the factory was taken by the Government on the basis of a unanimous report made to them through me, after a final objective and completely uninhibited investigation by a committee set up by me to undertake the assignment. The subsequent examination of the tenders, with their guaranteed costings, confirmed fully the findings of the committee that an industry could be established at Arklow to produce nitrogenous fertilisers to meet the growing requirements of Irish farmers and to make such fertilisers available at prices at least as favourable as the prevailing import prices, without protection or subsidisation.

The case, economic and otherwise, for the establishment of the factory has been given broadly in the Explanatory memorandum. I have, of course, been furnished by the company, in confidence, for my consideration and for consideration by the Government with comprehensive information on all the commercial aspects of the project including capital, production and distribution costings. The procuring of this information involved a full-scale and intensive investigation over a protracted period. Deputies will be aware of the critical views expressed on the scheme but I have seen no evidence that any comparable intensive survey had been undertaken by any person or group of persons.

Perhaps I might qualify this latter statement by saying that the National Farmers' Association have been quite commendably engaged in the critical appraisal of the project over a period and, latterly, the Irish Creamery Milk Suppliers' Association has had an objective examination of the project carried out. I believe each Deputy has got a report of that examination and I think the action of the ICMSA in this respect is very commendable. An intensive survey has not been carried out by this organisation since it would not be practicable to secure outside the resources available to the Government the services of a group as well equipped as were the Committee assigned to the job.

The House may wish me to recapitulate the history of the investigations which led up to the Government decision to go ahead with the project. This industry has been under consideration since the early 1930's and might well have gone ahead some years later were the negotiations not interrupted by the outbreak of hostilities in Europe. The prospects for the industry were kept in careful review during the post-war period, and when it became clear in recent years that considerable expansion in the home demand for nitrogenous fertilisers was about to take place, a special committee was set up in 1959 to report on the practical considerations involved in establishing a factory based on peat.

This committee consisted of senior officers from the Electricity Supply Board, Bord na Móna and Ceimicí Teo. with special qualifications and experience in the engineering and chemical fields, as well as economist and administrative representatives of the Departments of Industry and Commerce, Finance, and Agriculture, who were experienced in dealing with the fertiliser industry over a considerable period of years.

The Report of this committee was submitted in July, 1959 and while it was being considered by the Government a considerable reduction in import prices of nitrogenous fertilisers took place. The Government announced in October, 1959 that, having considered the committee's report, they were satisfied that the project would be economically feasible at prices prevailing before the recent drop in import prices but that it was not intended to put the project into operation until it could be shown that such a step would be economically sound and of advantage to the farming community.

In September, 1960 the committee was re-established with additional representation from the Department of Transport and Power and the Economic Development Branch of the Department of Finance. Detailed studies were secured from the foremost chemical and engineering firms in Britain, France, Germany and America, and further consultations took place with all possible sources of technical and commercial information in this country about production, distribution and application of fertilisers.

The committee in their report published in June, 1961 unanimously concluded that a nitrogenous fertiliser factory operated by a State company, at Arklow, using fuel oil and Avoca pyrites, could produce nitrogenous fertilisers for sale, without subsidisation, at prices in line with prevailing import prices. The committee's recommendation was made in the context of a factory with a design capacity of about 125,000 tons a year, but they pointed out that with the increases which were taking place in the home demand, a capacity of the order of 150,000 tons a year might be necessary.

I should like at this stage to pay a tribute to the memory of the late Professor Thomas Wheeler, who was a member of the faculty of science at University College, Dublin. He had been associated as adviser with my project and he rendered important service to the State as Director of Ceimicí Teoranta and Bord na Móna.

The Government accepted the committee's recommendations and established Nítrigin Éireann Teoranta to implement their decision to go ahead with the factory.

As indicated in the explanatory memorandum, the discontinuance of supplies of Avoca pyrites resulted in a change over to imported sulphur as an ingredient of sulphate of ammonia, one of the factory products. While sulphur from Avoca pyrites would have been more economical than imported sulphur, the change has proved not to be significant in the economics of the project as a whole. Sulphur is now in excess supply in world markets and prices are falling.

Nítrigin Éireann Teoranta have confirmed to the Government on the basis of the capital investment required and of the production costings guaranteed by the contractors that, using fuel oil, limestone and imported sulphur, sulphate of ammonia and calcium ammonium nitrate can be produced at Arklow at prices which will ensure that Irish farmers will continue to receive their requirements of these fertilisers at the present favourable levels.

Nítrigin Éireann Teoranta was incorporated as a private company in October 1961 to acquire, erect and operate a nitrogenous fertiliser factory at Arklow, County Wicklow. The Company engaged as their technical consultants the United Fertiliser Company of Holland, and its associate Shell Chemical Company Limited, England, both of whom are fully experienced in the operation and management of major nitrogenous fertiliser factories. The Electricity Supply Board provided consultancy services on the civil engineering side. The factory site selected by the company in the townland of Shelton Abbey, situated about 1½ miles west of Arklow, has outstanding advantages. It can be readily and economically connected to road and rail. Movement of the products out of the factory will not cause any traffic problems. In particular, road traffic to and from the factory will not have to pass through Arklow town. In addition, the site is screened from public view and it will be suitably screened from the Forestry School at Shelton Abbey. With the permission of the Ceann Comhairle I have placed outside the Library of the House, a photograph of the site. Deputies will be able to see how convenient the location is for road and rail connection and for adequate water supply. The factory will use a minimum of 1½ million gallons of fresh water per day. Fuel oil, which is the main raw material for the factory, will be delivered there by pipeline from Arklow harbour.

As I explained to the House in May last, the closest possible consideration was given to the question of location before the site at Shelton Abbey was ultimately selected. Representatives of the Arts Council inspected the site in April, 1962 and, having received full information as to the layout of the buildings, etc., they intimated to representatives of Nítrigin Éireann Teoranta that they saw no objection from their point of view to the location of the industry as planned. Full information about the site was also given to An Bord Fáilte, who raised no objection from the tourist amenities viewpoint.

The plant will include special equipment for treating such waste gases as oxides of sulphur and nitrogen to absorb any elements which could be harmful to local vegetation, or in any way unsightly. In this respect it can be said that the factory will be ahead of any of its kind in Europe and will more than comply with the requirements of the most modern clean air regulations.

It seems to me that much of the criticism of the decision to build the factory in the townland of Shelton Abbey must have come from people who have never either set foot in the townland or set eyes on sulphate of ammonia or ammonium nitrate. The house and out-offices in this townland, known as Shelton Abbey, are used as a Forestry School under the aegis of the Minister for Lands. It is not open to public view save with the permission of the Minister. Contrary to the impression sought to be given by the critics of the site, the house in Shelton Abbey has not, as a matter of fact, been a tourist amenity of Arklow. The house is situated 1½ miles from the town and, without travelling that distance along a private road, it cannot be seen.

For the convenience of any Deputies who may not be acquainted with the appearance and other characteristics of sulphate of ammonia and ammonium nitrate, I have, with the permission of the Ceann Comhairle, placed samples of these products on display in the House. It will be noted that both products are granular, odourless, and dustless. Deputies, I hope, will agree with my view that the production of these materials in a modern well laid out factory, giving permanent employment to upwards of 300 persons, should not detract in any way from the amenities of Arklow. I believe that, in the event, the factory will become a place of great interest to the public, and that planned landscaping of the grounds between the buildings and the Shelton Abbey house will add greatly to the tourist value of that property, should it be decided at any time in the future to throw it open to public view.

Following the selection of the site, invitations to tender for the factory were issued by Nítrigin Éireann Teoranta to consortiums of chemical engineering firms, comprising fifteen firms of international repute from Britain, France, Belgium, Germany and the USA. Four Irish civil engineering firms were associated with the consortiums.

Tenders were received from those firms on the due date, 31st July, 1962, and the Board of Nítrigin Éireann Teoranta, having received a report from the consultants on the capital and guaranteed costs submitted in the tenders, furnished an immediate report to me indicating that the contractual offers had more than confirmed the costings in the Report of the inter-departmental committee in June, 1961, on which the decision by the Government to establish the factory was based. The Government, after full consideration of the circumstances of the project, approved the placing of a contract which was then awarded by the company to the consortium of contractors headed by Messrs. Lurgi of Frankfurt-am-Main, West Germany. The basic contract price was of the order of £5 million. In accordance with the practice in the chemical industry and to ensure that work could commence on the site before the onset of winter, a letter of intent to place the contract was given to Messrs. Lurgi. The preliminary development work at the site commenced in November last and the entire factory is expected to be in commercial operation by 31st March, 1965.

The factory will have a design capacity of 150,000 tons of nitrogenous fertilisers per annum in the forms of sulphate of ammonia and calcium ammonium nitrate. These products are not manufactured in Ireland; neither is ammonia, which is a key intermediate product. For the information of Deputies, who like myself, may not be familiar with the chemical processes involved, I should say that I am advised that the process to be used at Arklow is very well established and is of standard design. Briefly, the process involves the separation of oxygen and nitrogen by compression, the partial oxidisation of fuel oil to produce hydrogen and carbon monoxide, the removal of the carbon, and the treatment of a mixture of the hydrogen and the nitrogen to form ammonia. This is the main basic process.

Ammonia contains over 80 per cent. pure nitrogen. Part of the ammonia produced at the Arklow factory will be used for reaction with sulphuric acid produced at the factory to manufacture sulphate of ammonia. Ammonia will also be used for the production of calcium ammonium nitrate, the second main product of the factory, which indeed is expected to become the main product of the future. The manufacture of calcium ammonium nitrate involves the production of nitric acid from ammonia. The reaction of this nitric acid with additional ammonia gives ammonium nitrate, which, as a pure dry product, contains about 34 per cent. pure nitrogen. The nitrogen content is reduced while the product is still in slurry form by mixing the product with finely ground limestone. This treatment ensures that there can be no danger of fire or explosion which could happen in certain conditions with pure ammonium nitrate. The grade currently favoured by Irish farmers contains 20.5 per cent. nitrogen, but the indications are that calcium ammonium nitrate containing 23 per cent. and perhaps 26 per cent. nitrogen are likely to find favour in the foreseeable future. These higher concentrations can readily be produced at Arklow.

Traditionally, sulphate of ammonia has been the main nitrogenous fertiliser used here. When imports were resumed after the war, calcium ammonium nitrate had come on the market and the imports for 1952-53 amounted to 51,000 tons of sulphate of ammonia and 4,000 tons of calcium ammonium nitrate. Since then, the demand for both products has increased steadily and substantially. This is not surprising and the trend is likely to continue in view of the spectacular results achieved by An Fóras Taluntais in experiments in the use of fertilisers generally and particularly in grassland experiments with calcium ammonium nitrate. The actual figures of imports over the past three years have been as follows:—

Year	Sulphate of Ammonia	Calcium Ammonium Nitrate
	Tons	Tons
1959-60	78,122	21,005
1960-61	88,500	25,500
1961-62	101,969	30,638

The continued growth in the demand for these fertilisers has been closely studied throughout the entire post-war period and was the subject of the following comment in the publication Economic Development published by the Department of Finance in November, 1958:—

"On the other hand, while it has been estimated that ammonium nitrate fertilisers based on milled peat could be produced more cheaply than imported nitrate or sulphate of ammonia, it is unlikely that the economic output of the factory (100,000 tons) would be absorbed on the Irish market for some years. The current demand for all types of nitrogenous fertiliser is of the order of 80,000 tons per annum. A factory producing 100,000 tons of ammonium nitrate per annum would, therefore, be faced with the initial disadvantage of having to sell its surplus production on export markets in competition with large-scale British and Continental producers."

Speaking in the Dáil on 26th July, 1962, Deputy Norton reminded me that when he was dealing with this matter as Minister for Industry and Commerce his one concern was whether there would be sufficient use of nitrogenous fertiliser of the type contemplated to make the proposition an economic one, and he asked if I was satisfied on this score. I replied that I was satisfied beyond doubt and that it would not need tariff or quota protection. A factory with an output of 150,000 tons per annum is well above the minimum economic size and should be able to dispose of its whole output on the home market. Deputies will have noted from the figures I have already quoted that the total demand in the latest 1961-62 season was over 132,000 tons in all. Having regard to the trend of user and to the rate of increase in previous years, it is a reasonable expectation that when the factory is in production in 1965 the total demand in the home market should have reached the 150,000 ton level, at least.

It is a fortunate circumstance that the very substantial daily requirement of cooling and process water is available free from the Avoca river, without affecting in any way the river amenities or the availability of river water for other possible users. A suitable water supply is essential for a project such as this and the ready availability of adequate supplies from the Avoca river was an important factor in the selection of the site.

The factory will operate on a 24-hour/day, basis, 7 days a week throughout the year, and to meet this requirement, operations on the basis of 4-shift working will be necessary. Permanent employment will be given to over 300 persons, the majority being males. These will include senior supervisory engineers and chemists, foremen and skilled operatives engaged on the plants producing ammonia, nitric acid, ammonium nitrate, sulphuric acid and sulphate of ammonia, as well as the storage and handling plant. Unskilled labour will also be employed on those units. The maintenance personnel will include instrument operatives, electricians and fitters. In addition, there will be the usual factory employment for accounts and sales staff, clerical staff, despatch clerks, security officers, gatekeepers, messengers, etc.

As soon as the design documents have been drawn up by the contractor, the main civil engineering work in connection with the factory will commence. Orders have already been placed for the major plant items such as compressors, and it is expected that many of the plant units will be ready for installation next Autumn. Substantial employment will be afforded on construction and development work.

Deputies may have seen published statements that the employment content of this factory is out of proportion to employment in comparable industries elsewhere. These statements are simply not correct. The actual employment in each separate section of the plant and in administration and sales etc., has been assessed by Nítrigin Éireann Teoranta in agreement with their consultants, who are themselves operators of nitrogenous fertiliser factories in Britain and the Continent. The figures have been very carefully worked out and compared with the employment content of similar production units elsewhere.

As regards the factory costings, I would like to point out that Nítrigin Éireann Teoranta will be operating a nitrogenous fertiliser factory in open competition with imported products, i.e. in conditions of free trade. While therefore, as stated in the memorandum, it is desired to give Deputies as much information as possible about the project, they will understand I am sure, that there is no precedent for the disclosure by industrial concerns of such information.

It is quite understandable that Deputies are anxious to satisfy themselves as to the soundness of a proposal to invest £6,000,000 in an industrial project even though the money is to be provided on a repayable interest-bearing basis. I can assure this House that the Arklow project as planned will be fully economic in free trade conditions. I have no doubt whatever that the company will be in a position to honour the undertaking already given that nitrogenous fertilisers will be made available to Irish farmers without subsidisation or protection at prices in line with prevailing import prices. This undertaking assures the supply of nitrogenous fertilisers to Irish farmers at the prevailing favourable prices.

There is, moreover, another potential advantage. Dumping will presumably be prohibited in free trading conditions, consequently there can be no expectation of a continuance of the current low level of import prices. Without the factory Irish farmers would, in European free trade conditions, be at a substantial price disadvantage vis-a-vis their farmer competitors on the Continent.

Any commercial or technical assessment of the optimum location of a nitrogenous fertiliser factory must take account of the final cost to the consumer arising from the cost of raw materials, production and distribution of the products.

The best location for a nitrogenous fertiliser factory is a point convenient to a port where imported materials can be secured, and as close as possible to the principal areas of consumption of the factory products. In Ireland, nitrogenous fertilisers are mainly consumed in the east and south, and the largest compounding factories which need sulphate of ammonia for bulk are also located in the same general area, i.e., Dublin, Wicklow, New Ross, Waterford and Cork. It has been established from detailed studies that the average cost of distribution of nitrogenous fertilisers to farmers is very favourable from the Arklow area. The actual factory location is most convenient for distribution purposes. The railway and public road are beside the site and no traffic problems will be involved in connecting up with these facilities.

In addition, the factory site has the advantage, as I have said, of providing excellent foundations for the heavy factory equipment and stores. The factory will consume about 1½ to 2 million gallons of fresh water per day. The availability of adequate supplies from the nearby Avoca river at no cost, apart from pumping, was therefore a vital consideration. The factory's fuel oil requirements will amount to less than 100 tons per day. There will be no need, therefore, for large scale importations. Indeed the provision of substantial storage capacity and the financing of excessive stocks of oil, which such large scale importations would involve, would very quickly offset the benefit of any transport saving which might result from using large ships. To summarise, the location selected for the factory is the most favourable from the engineering and economic aspects.

This area was originally selected by the inter-departmental committee which reported in June, 1961, that a factory located at Arklow using fuel oil and Avoca pyrites could produce nitrogenous fertilisers for sale without subsidisation at prices in line with prevailing import prices. It is, of course, a matter for regret that sulphur from the pyrites is no longer available. However while that material, at the price at which it was available, would have been more economical than imported sulphur, the difference is not significant in the economics of the project as a whole, particularly as sulphur is now in excess supply in world markets and prices are falling. The House is aware that investigations into the future prospects for the Avoca mines are taking place at present and I am sure I am expressing the hopes of all the Deputies that it will be found possible to reopen the mines on some basis which will be found to be economic. Bearing this in mind, the factory is being planned so that pyrites-burning plant can be readily installed if there are prospects for production at the Avoca mines on a reasonably long term basis.

The cost of transporting from the Continent bulky materials such as nitrogenous fertilisers is relatively high, representing about £2 10s. 0d. per ton. The total transport costs represent, in effect, an addition of some 20 per cent. to 25 per cent. to the European ex-factory prices. The c.i.f. value of imports last season amounted to £1,800,000. It has been suggested in some quarters that it might be economical to import more concentrated materials such as ammonia, from which bulkier fertilisers could afterwards be made. I am aware of a number of commercial quotations for deliveries of ammonia to this country based on natural gas, and I can assure Deputies that such supplies are in no way competitive with the guaranteed production costs based on the use of fuel oil at the Arklow factory.

The reason for this is that ammonia, is a difficult commodity to ship. Freight and storage charges are heavy. Fuel oil is, of course, an international commodity freely available from commercial sources throughout the world, and is readily transportable. In addition, fuel oil has a very high calorific value and one ton of ammonia can be obtained from four-fifths of a ton of fuel oil. It is clear from our investigations and from the practice in other countries that it is more economical to import materials such as fuel oil for fertiliser production than to import either the basic chemicals such as ammonia, or to import the finished products such as calcium ammonium nitrate.

Imports of nitrogenous fertilisers are generally arranged on a c.i.f. basis. This means that the foreign supplier arranges for the shipping and the importer pays in foreign currency for the whole cargo on a c.i.f. basis. Total cost of imports of sulphate of ammonia and calcium ammonia nitrate last season amounted to about £1¾ million, and this figure may be expected to increase in the future. When the Arklow factory is in production the imported materials used in the process will be fuel oil and sulphur and the home materials limestone, water and air. The total annual cost of the imported raw materials will be in the region of £350,000 for the production of nitrogenous fertilisers for which without the factory we would require to send out of the country some £2 million per annum. By any standards, this is a very significant and important contribution to our overall balance of payments position, particularly when it can be achieved without any degree of subsidisation by way of capital grant or otherwise and without the imposition of quotas or tariffs.

As Deputies will have seen from the Bill, it is proposed to provide finance for Nítrigin Éireann Teoranta by way of repayable advances from the Central Fund, i.e. on the lines of advances to the Electricity Supply Board and Bord na Móna. I feel I must stress the significance of this arrangement. There is no question of a grant or subsidy to this industry. The money is being advanced on a repayable basis and the company will be required to provide for the repayment of principal and interest in full to the Exchequer.

The maximum total sum provided in Section 5 of the Bill by way of advances out of the Central Fund for the purpose of enabling Nítrigin Éireann Teoranta to perform its functions is £6 million. The balance remaining after meeting the basic contract for the design, erection and commissioning of the factory will be needed to meet the cost of the following:—

(1) Electrical sub-station and power connection to the National grid.

(2) Supplies of mechanical spare parts.

(3) Initial stocks of raw materials.

(4) Factory mobile equipment, furniture and fittings.

(5) Training of factory operatives.

(6) Salaries, wages and other expenses before commencement of production.

(7) Provision for contingencies.

In addition to providing for advances totalling £6,000,000 to Nítrigin Éireann Teoranta, the Bill empowers the Minister for Industry and Commerce, after consultation with the Minister for Finance, to guarantee borrowings by the Company not exceeding £1,000,000 at any one time.

The House will, I feel sure, readily recognise the importance, in the context of our industrial and agricultural economy, of a factory capable of producing nitrogenous fertilisers in adequate quantities at economic prices. There is, of course, the further attraction that the production of basic chemicals, such as ammonia, nitric acid and sulphuric acid, provides excellent prospects for the development of subsidiary industries and for facilitating the existing fertiliser manufacturers to bring their production programme more in line with the modern demand for more concentrated forms of fertilisers. As I have said, the factory is being laid out so that there can be a major expansion of capacity in due course. In addition, provision has been made for space for subsidiary industries which we may reasonably expect to result from the availability of ammonia and other chemical products at this factory.

I confidently recommend the Bill for approval.

As the House has ordered, it is proposed to take Supplementary Estimate No. 44 in conjunction with the Second Reading of this Bill. This Estimate is necessary to cover the anticipated cost of repayable advances to Nítrigin Éireann Teoranta to enable the company to repay certain borrowings to their bankers.

Nítrigin Éireann Teoranta were directed by the Government to award the contract for the nitrogenous fertiliser factory at Arklow so that the preliminary development work could commence before the onset of winter. The contract was awarded to Messrs. Lurgi of Frankfurt-Am-Main, West Germany, on 23rd October, 1962.

In accordance with the terms of the contract for the factory, the company are required to pay sums totalling £900,000 to the contractor by 31st March, 1963, i.e. in advance of legislation which is now before the House. The company were authorised by the Minister for Finance to secure this sum as short-term borrowings from their bankers to enable the company to be put in funds pending the enactment of legislation. Advances from the Central Fund are now required to enable the company to repay the borrowings.

Deputies will have a full opportunity of discussing the project in all its aspects in connection with the legislation before them and I recommend this Estimate for their approval.

Mr. Cosgrave

A large scale capital investment of this nature requires to be justified by sound economic or social reasons. In promoting this legislation for the purpose of giving statutory sanction to what is already an accomplished fact, it is reasonable to assume that the Government are satisfied beyond doubt that the proposal is a viable one. I should like at the beginning to express the view that the manner in which this project has been presented to the House is not very satisfactory. A matter of this sort should be introduced by submitting the legislation before or at the same time as the steps taken to establish the company.

In this case, the company was established first and, indeed, has been in operation for some time, and now the legislation has followed. It is not that the legislation presented any drafting or technical difficulties. There are many precedents so there was no great difficulty in formulating and drafting the legislative proposals at the same time as the company was initially established. When a matter such as this is presented in this way, even if Deputies believe that the project should not be proceeded with, they find themselves presented with an accomplished fact. It is not in accordance with the normal procedure of the House. Neither is it in accordance with the normal procedure which all Governments have adopted in promoting proposals such as this for consideration by the Dáil and for approval, or rejection, as the case may be.

As the Minister said, this matter has been the subject of consideration periodically for many years. Until the present proposals were brought forward, the last published information indicating the Government's view was contained in Economic Development published in 1958. For a moment now, I wish to advert to some of the remarks in it because I believe that, while the White Paper, or memorandum, circulated with this Bill and the Minister's speech have answered some of the queries which are uppermost in many people's minds concerning this project, there are still certain questions which require to be answered.

The publication, Economic Development, published in November, 1958, referred to this matter. At paragraph 6 of chapter 19, page 179, it is stated:

In 1953, Ceimicí Teoranta submitted a report recommending that ammonium nitrate should be produced, using milled peat or anthracite duff in conjunction with limestone as raw materials, the factory to have an output of 100,000 tons per annum. This recommendation was confirmed in a detailed report, prepared after consultation with Dutch consultants and furnished in 1954 at the request of the Government. An investigation of the position in the Netherlands and other countries had shown that there was a marked preference there for ammonium nitrate, mainly because of the lower cost of production and the absence of the soil acidification which may result from continued use of high doses of sulphate of ammonia.

In paragraph 7, it is stated:

Consideration of the matter has recently crystallised in a proposal to establish a nitrogenous fertiliser factory at Shannonbridge to produce ammonium nitrate fertiliser using milled peat from the nearby Blackwater bog, which has already been partly developed by Bord na Móna for the production of electricity. Until this proposal is further developed, however, detailed estimates of capital and production costs will not be available and it would be premature to attempt any conclusive assessment of the economics of the project.

That was as late as 1958. When the Minister recommends this proposal, he says that the matter has been the subject of inquiry by a committee set up by him in 1960. First of all, there was a committee established, which reported in 1959 and, on the basis of that report, the Government decided that it would not proceed with the project. I assume the project is the project of the Blackwater bog. Subsequently a committee was established in August, or September, of 1960. That committee consisted of representatives of the various interested Departments and they had advice, or the result of studies, from firms in Britain, France, Germany and America.

One of the disadvantages in the presentation of this measure is that we have not been given the names of the firms concerned and it is difficult to assess the value of these comments in their absence. It is true that later in the Minister's speech he refers to the fact that the company, that is, Nítrigin Éireann Teoranta, engaged as their technical consultants the United Fertiliser Company of Holland and its associate, Shell Chemical Company Limited. I am not sure whether that is the same Dutch company as had already advised in 1954 because the name is not given in this report, but I believe the Minister should indicate the reason for the sudden change of opinion between the proposal in 1958—late in 1958, in fact— and the apparent rejection of that proposal in 1959, although a public announcement had been made to the effect that it was proposed to establish the factory, and then the re-establishment either of the original committee, the 1958-59 one, or a new committee in 1960, which subsequently got technical advice from this Dutch firm and its associate company in England and also had information available from chemical and engineering firms in Britain, France, Germany and the United States.

The most satisfactory way of dealing with this proposal is to consider it on its merits. One of the drawbacks in the presentation by the Government and the Minister is that they have either pleaded too much or attempted to justify the project by utilising every available argument. It is reasonable enough in certain circumstances to adopt such tactics but in a serious project in which large-scale capital investment is involved something more definite is required.

This project is confidently recommended because, although it was originally based on pyrites from Avoca, there is now available a world surplus of sulphur and the price has tended to drop. Cheap supplies of the necessary raw material are readily available. On the other hand, over the past four years, there have been readily available ample supplies of cheap fertilisers at exceptionally low prices. That may not continue. I accept that, but it is equally valid to argue that the surplus of sulphur may not continue either. If it is argued, on one view, that supplies of fertilisers at cheap rates may not continue, it is equally valid that we should accept the fact that cheap sulphur may not continue to be available.

As the Minister said, this proposal has been the subject of very protracted examination at periodic intervals, if not continuously, over many years. One of the facts which we recognised many years ago was that the land of this country, particularly the grassland, required substantially increased application of fertilisers. Because we recognised that, an independent expert was invited by the inter-Party Government in 1948—Mr. Holmes of New Zealand —to advise the Department of Agriculture and the then Minister and Government on our grasslands. He reported in that year and said in fencing, water supply, drainage, cultivation, liming, fertilising and regrassing, Ireland is still largely a virgin country. I saw hundreds of fields growing just as little as it is physically possible for land to grow under an Irish sky. It is a miracle that some of the land is able to grow at all.

This report was adverted to in the publication Economic Development in which the comment was made that the progress achieved since then, substantial though it was, has not eliminated the force of Mr. Holmes's remarks. If we examine the quantity of fertilisers used by Irish farmers compared with the quantities used by other countries who are members of the OEEC like ourselves, we find a very great disparity. The consumption per acre of nitrogenous fertilisers in OEEC countries compared with Ireland for the following years gives this picture. These figures are taken from OEEC statistics: from 1950-53, the average of the OEEC countries was £13.1 per acre of nitrogenous fertilisers. In 1956-57, that had increased to £17.2 per acre. In 1960-61, it increased to £20.4 per acre. For Ireland during the same period it was: 1952-53, £2 per acre; in 1956-57, £3.3 per acre; and in 1960-61, £5.4 per acre. All this indicates the extent to which this country must increase its utilisation of fertilisers if we are to measure up to the standard achieved in other OEEC countries.

In addition, we must make up the backlog of the deficiency in the many areas and on many farms that some of these countries who have had more advantageous circumstances have not to contend with. If, on the other hand, we compare the consumption of nitrogenous fertilisers in this country and in OEEC countries, there are certain interesting facts which come to light from OEEC publications. One is that between the years 1952 to 1957, when the prices of artificial manures and nitrogenous fertilisers tended to rise, the annual rate of increase for this country was about 18 per cent. The annual rate of increase in OEEC countries was substantially less. For those countries using nitrogenous fertilisers, particularly ammonium sulphate—and most of the European countries use far greater quantities of ammonium nitrate than we do—the increase was between seven and five per cent. When the price of fertilisers dropped between the years 1957 and 1961—and this, I think, has a certain bearing from our point of view—the consumption of fertilisers increased here by between 11 and 14 per cent. It is significant that although the price dropped, that period also coincided with the period in which the farmers' incomes were either static or lower. One of the facts is that farmers naturally tend to spend money on other matters before they spend it on manures and if income contracts, there is a likely contraction in this respect or, as in this case, the rate of growth of consumption was not maintained, whereas in the other OEEC countries the rate of consumption increased slightly in the same period.

One of the necessary factors which must be borne in mind and indeed one of the incentives necessary for full utilisation of fertilisers is adequate credit facilities. In that connection, it is obvious from consumption in the past and from the fact that this rate of growth to which I refer was not maintained during the period when farmers' incomes did not maintain the increase and when costs were rising, that increased consumption depends on the maintenance by the farmer of an equivalent or increased income or, in the alternative, adequate credit facilities.

The publication of the results of the investigations by Mr. Holmes certainly stimulated thought and inquiry here and resulted in a substantial increase in the utilisation of fertilisers. To that extent, the decision taken to give expert opinion on the state of the grasslands, which was completed by Mr. Holmes in 1948, was a decision which was justified, not merely by the increased output subsequently but by the increased input of fertilisers which has been shown in the figures available here as well as in OEEC statistics.

One other factor in connection with utilisation of fertilisers here is that approximately ten years ago the import of ammonium sulphate here came almost entirely from Britain but between January and October of last year, we imported 90,000 tons of ammonium sulphate, of which over 10,000 tons came from Britain, showing that the imports from other countries here had increased substantially. I wonder whether the Minister or the Government have considered whether this project could have been undertaken by any of the existing firms. It is somewhat remarkable that although we have here well-established efficient fertiliser firms, none of them for one reason or another, saw fit to engage in this undertaking. It may be that because of their contacts with firms outside, or for other reasons, they did not want to engage in it. On the other hand, if the prospects are as satisfactory as the Minister and the committee investigating it believe it seems to me somewhat strange that the matter has not been considered by existing private enterprises, or undertakings operating here which are efficient concerns. So far as capital is concerned, no one can describe any of these firms as poor or those who operate them as people short of money. So far as capital is concerned they had readily available to them adequate financial facilities and should also have had adequate technical facilities.

One of the matters which have been the subject of concern to those who have examined this is the question of costings. I believe that the Minister should have given costings in greater detail. On at least one former occasion when a large scale investment was undertaken here, very detailed costings were given. The figures given here indicate only a general overall position.

I have endeavoured to get certain facts in order to try to base an examination of this matter on the available information and, so far as one can see, the costings available indicate that the cost per ton of the ammonium sulphate which would be manufactured would be made up on the following basis: depreciation in interest would amount to about £4; raw materials about £3 7s.; labour £1 16s.; power £1 6s., and maintenance about 10s., arriving at a total cost of £11 per ton. That is based on certain assumptions. It is based on the assumption that the charges in respect of plant maintenance would amount to about an average of £4 to £6 per annum, operating on the basis of the cost of the plant, that this would be on the basis of the funds available to the Government at the prevailing rates. Allowing for some variations in rates, there would be a certain change in that, but the writing off period would be approximately 15 years at 6 per cent., and on the basis that the total capital involved is £6 million, this would work out at approximately £600,000 per annum.

It seems to me that in other countries factories of this nature may have a shorter period of obsolescence but it varies, as I understand, between 10 and 20 years, and in this case, striking a balance between the two, I arrive at 15 years. On the assumption that these costings are right, the cost per ton would be somewhere between £11 and £12. Whether these figures will be altered, as they would be by a change in the supply position of the raw materials, is a matter which only time can tell, In that connection, the factor that has given rise to the greatest apprehension among farming organisations is the question of whether supplies of fertiliser from this factory will be sold at either existing price levels, or at prices comparable with those which would prevail on a free import market.

In Paragraph 27 of the White Paper published with the Bill, it is stated that "the Government are fully satisfied that this country can make nitrogenous fertilisers available without over-subsidisation or protection at prices at least as favourable as the present import prices." Provided that undertaking is honoured, I believe that the farmers' organisations and farmers generally will be satisfied. Where one has any doubts is that while the Minister and even the farming organisations themselves express the view that it is unlikely the present favourable trend of import prices for fertilisers will continue, the same is surely true in respect of the supply of sulphur. If for any reason the supply of sulphur alters or the price alters, as a result of a change in supply, then of course it will affect the economics of the proposal.

We feel that these proposals have not been fully examined by the committee which was set up. They had available to them technical, engineering, chemical and scientific advisers who are not available to any body other than the Government, and they must have been satisfied on the basis of that information before this project was introduced. In the light of that advice and the fact that this matter has been the subject of consideration over a lengthy period—although I am bound to say that I have read whatever information is published on it— I am somewhat disturbed by the fact that the project which was contemplated only four years ago has been abandoned and that in a relatively short space of time, an entirely new location and an entirely new process in many respects have been adopted. However, perhaps the Minister will be prepared to indicate the basis of the technical, scientific and chemical advice that has been given and the costings presented to him but not presented to the House, because the costings that were given in the memorandum were very inadequate.

I have attempted to work out the general basis of costings on the information available and on comparable figures for similar industries or establishments elsewhere and I have arrived at a general figure which may be disproved or altered by a number of factors, but nevertheless it is one which gives some indication of the cost involved. If the Government are prepared to guarantee that fertilisers will be provided at prices in line with existing prices, then I believe the farmers' organisations and farmers generally, as well as this House, may be satisfied with the proposal which is being brought forward. At the same time, there are certain facts which the Minister has referred to which may or may not alter. It is true that at present the consumption of fertilisers is mainly in the southern and eastern parts of the country. On the other hand, it is desirable that the increased use of fertilisers should be extended to other parts and that may alter to some extent transport costs.

The Minister has adverted to the fact that Arklow is well served by road and rail. He would be a rash man who would presume that CIE might not close that or any other line, because up to the present no one knows when the next line may be closed. In any event, there is available there a good road system to meet the needs of the area. However, having weighed up all these various factors and on the basis of the assurances given in Paragraph 27, and recognising the value of a project of this nature, the capital investment, the prospective employment in Arklow and in Wicklow which is very attractive at the present time, especially in view of the disappointment and dislocation caused there by the closing down of the Avoca mines, the fact that it will provide worthwhile employment of a new kind in an industry that offers prospects for development, providing employment for technicians and scientists, engineers and skilled personnel, as well as unskilled and semi-skilled, we believe that the facts which have been brought forward and the information which has been given to the Government and to the Minister in particular justify the decision to proceed with it.

Subject to the comments I have made which I hope will be satisfactorily answered when the Minister is replying and the fact that this offers an opportunity for the development of a new enterprise of a somewhat different kind from anything undertaken here before, although we have a well-established and efficient fertiliser factory engaged in different aspects of the work and provided the Minister can guarantee that there will be no increase in the price charged for fertilisers, we have no objection to it. Indeed, so far as the opportunities provided are concerned, we welcome the prospects offered for technical, scientific, engineering, skilled and unskilled personnel which may be provided at Arklow.

Mr. Norton

The establishment of a nitrogenous fertiliser industry has been the subject of much discussion, not only in recent years but in an intensified way in recent months. There has been a great deal of newspaper controversy on the subject. Statements have been made and contradicted. Fresh claims have been made as to the economic and uneconomic character of the proposed nitrogenous fertiliser industry. The result is that a sensible man in the welter of all this wades through these statements and then tries to extract the facts from all that has been said and all the propaganda that has been used, according to the viewpoint of the person concerned. Basically nobody can deny in a country like this where 40 out of every 100 people are gainfully employed in agriculture that it is obviously desirable that we should have a first-class fertiliser industry because fertilisers are the raw material of our entire agricultural industry. The price we get for the agricultural goods we export, the quantity we export and the quality we export will all depend in the long run on what we put into our agricultural production.

There is no better way of determining that than by ensuring that what comes off the land is fed by the best we can put into the land. Therefore, I come to the stage at which I ask myself the question: Is the nitrogenous fertiliser industry necessary here? The answer to that is "yes" to anybody who has ever given even the most perfunctory consideration to the necessity for boosting in every possible way our exports of agricultural produce. In the long run, and against the economic scene now emerging in Europe, this may bring us a better return than perhaps our industrial goods or other services upon which we rely so substantially for balance of payments purposes.

If one looks back through the vista of yester years, one can remember the long controversy over the Shannon Scheme. Should we ever develop the Shannon Scheme? That in its day was a case for much disputation. The wiseacres, or self-appointed wiseacres, said it would ruin the country; the country could not finance the Shannon Scheme. It is quite unnecessary, it was said; it is all right for some highly industrialised countries in Europe to finance an electrification undertaking like the Shannon Scheme but it is absolutely absurd for a small country like Ireland. But in spite of all the groans and the prognostications of the Jonahs, the Shannon Scheme went ahead.

If you searched the boulevards and the cross-roads of this country, would you find a fellow who ever hinted in the slightest way that it would not be a good job to develop the Shannon? Everybody was proud of the fact that the Shannon was developed, but in its day, as the 1926 Official Debates of this House will show, it was the subject of great perturbation and more acrimony until the facts justified the prophecies of the prophets. Thus we have the Shannon Scheme which is now not only the admiration of our own people but the admiration of many people who come from other small countries to see what a small country like Ireland has been able to do for the electrification of its industries and its private dwellings.

There was another subject of great controversy, that is, the establishment of the sugar beet factory. That in itself held the stage for quite a long time. It was denounced on many a platform and many people also denounced it as something we should never have attempted. But the sugar factory was established and now there are four such factories, all processing not merely Irish beet but imported raw materials for processing and for re-export. There is nobody here now who is so intellectually impoverished as to assert that the sugar beet scheme was not a good one from the point of view of strengthening economically the fabric of the nation. It is no harm, when we are discussing this nitrogenous fertiliser factory, to remember the self-assumed wisdom which distinguished our consideration of the Shannon and the sugar factory schemes in the light of the fact of what was said here in condemnation of them, and said outside also. Both of these schemes have added virility, life and stamina to the economic fabric of the country.

Now we come to the nitrogenous fertiliser factory. This scheme has been under consideration by a couple of Governments over recent years. In principle, there was a general desire that the nitrogenous fertiliser factory should be established. The great difficulty was to find out whether, if it were established, at certain times during recent years, it would not involve an increase in the cost of fertilisers to farmers. It was certainly felt that it might be dangerous to go ahead with the establishment of a fertiliser factory if that meant increasing the price of fertilisers to farmers During my time in the Department of Industry and Commerce, it was felt —I cannot say anything about the present Minister's term of office—that it might be difficult to go ahead if the establishment of a nitrogenous fertiliser factory meant increasing the price of fertilisers to farmers because it was recognised that the fertiliser was the raw material of the farmer who had to compete in a pretty tough competitive market and had to sell his goods in Great Britain.

With changes in sulphur prices and the availability of new processes of fuel oil for the purpose of making sulphate of ammonia, it has now been possible to look on this whole project in an entirely different way. Even up to as late as four years ago, thinking on the subject was along the lines of utilising peat for the purposes of producing the nitrogenous fertiliser, but, as I say, other experiments and developments elsewhere have shown perhaps that the production of nitrogenous fertilisers from gasification of fuel oil would probably give cheaper and perhaps better results.

At all events, the whole subject has now been thoroughly examined, not merely by the Government in office, but by their predecessors. It has been the subject of examination by competent civil servants in a number of Departments who had no axe of their own to grind. The Minister now comes to the House and says: "After having the whole matter thoroughly vetted by all the staffs available to the Government and by taking consultation with firms in different parts of the world who themselves have established nitrogenous fertiliser factories, and with builders who have had experience of building them, we now come to the Dáil and ask you to pass this Bill, involving the expenditure of £6 million, for the purpose of enabling us to establish a fertiliser factory in Ireland". The ground has been cleared by all the examination done beforehand. The position has been thoroughly sifted and so far as the Minister's statement is concerned, although he was obliged to be reticent in regard to the costings, the broad basis of the scheme was sufficiently put to us to enable us to make up our minds on the whole business, fortified by the opinions of people who have no axe to grind personally and by all the advice he could get from responsible people in the fertiliser world.

We have now reached the stage where the Minister says he wants £6 million to go on with the job. I think that at this stage we are entitled to ask him certain questions and to answer these questions ourselves or to get the Minister to answer them in the House. It has been said that the numbers of staff to be employed in the factory which will be established here will be completely out of step with the numbers employed in any other similar factory known in the world. The Minister says: "We have taken steps to check that and we are satisfied that the numbers to be employed in the nitrogenous fertiliser factory at Arklow will be approximately the same as the numbers in similar nitrogenous fertiliser factories in other parts of the world." That is either true or it is not. If the Minister says after consultation with firms who are specialists in this business of operating fertiliser factories, that Arklow will be staffed approximately the same as any other such factory, we must accept that as a positive assurance.

The Minister has said that as far as price is concerned, the farmer will get his nitrogenous fertiliser at no higher price than he is paying today. Possible he may get it at a lower price but he will not be asked to pay a higher price and it will not be necessary to impose a tariff on imported fertilisers or to institute a quota for imported fertilisers in order to maintain the viability of the fertiliser factory at Arklow. If we take these four items together: the fact that the factory at Arklow will give adequate employment commensurate with employment given by similar firms elsewhere—the fact that the price will be no higher and possibly lower, and the fact that there will be no need for tariffs to be borne by the farming community in order to maintain this industry and no necessity to adopt a quota as a protection device to sustain the factory—it seems to me that if the industry passes these four vital tests, there is no need for the misgivings of people who fear that the factory price will be higher, that there will be heavy tariffs to be borne and that only half a dozen people will be occupied in pushing buttons in the Arklow factory.

It has been established that the factory will give employment to a substantial number of people, that the farmers will be able to use Irish-produced fertilisers without having to pay increased prices for them and that no tariffs or quotas will be necessary to maintain the factory. These questions having been answered satisfactorily, there is good ground for the establishment of the nitrogenous fertiliser factory in the same way as the sugar company was established and the River Shannon harnessed.

I should like some information on one or two matters. The original proposal was to locate the factory at Arklow because of the fact that there was a substantial quantity of pyrites in Avoca, more than could be used in this country unless an export market could be found for surplus processed pyrites. I sincerely hope it will yet be possible to reopen the Avoca mines and I should like to know if it would then be possible to revert to the utilisation of Avoca pyrites instead of having to import sulphur. You can get all the sulphur you want from the Avoca pyrites and if you can get the copper mines working again, it should be possible to utilise the Avoca product as a substitute for imported sulphur in the Arklow fertiliser factory.

I would also like to ask the Minister if he would elaborate on the passing reference he made to the possibility of establishing subsidiary industries arising out of the establishment of the nitrogenous fertiliser factory. Such industries have gone hand in hand in every country where they have been established with other types of subsidiary industries. I am quite sure that the committee which dealt with the possibility of establishing the fertiliser industry must have come up against the possibility of the establishment of subsidiary industries on many occasions. Would the Minister pull the curtain back a little and give us a picture of what may follow from the establishment of the fertiliser factory? In Holland and elsewhere where the fertiliser factories exist, subsidiary industries have been established which provide substantial employment as well as making a useful contribution to the economic fabric of these States.

The Minister mentioned that he estimates that the economic use of this factory will probably necessitate a production of about 150,000 tons a year. When one remembers that the present use of sulphate of ammonia is roughly 101,000 tons a year, one sees that we have some little way to go, unless, of course, we include the calcium ammonium nitrate as an equivalent fertiliser. From what the Minister said, I gather the objective is to produce at an economic level from the outset. I hope there will not be a deficit for a few years because of the fact that the fertiliser is not in sufficient demand to cover the entire product of the factory. No matter how we get rid of the product of the factory, we should, I think, produce to the full economic possibilities of the factory, finding ways and means to attract the farmer to buy at no less than that necessary to make the factory an economic proposition from the outset.

It should also be possible to find an outlet for some of our nitrogenous products in the Six Counties. These products would have a much shorter haul than those that are imported to-day. An export market to the Six Counties, especially in view of what may emerge in the future, might make a substantial contribution towards financing a company of this kind. My view of the project is that overall the case for the establishment of the factory has been well made. Economically, it is fully justified. I regard it as one of those substantial steps which take us further along the road of building here a nation which can provide full employment for its people instead of spraying them out over all parts of the world.

Mr. Dillon

Deputy Cosgrave has stated exhaustively our position in regard to this project. There are certain specific queries, however, which I would wish to address to the Minister. There are certain facts the House ought to know. This is not the first proposal for a nitrogenous fertiliser factory adumbrated in Government circles here in the recent past. There have been three or four previous proposals, some of which I considered when I was Minister for Agriculture. On each of these occasions, the Department of Agriculture was in a position to make a case which carried conviction to the Government when Dr. Ryan was Minister for Agriculture, when the late Deputy Tom Walsh was Minister for Agriculture and when I was Minister for Agriculture.

The proposals then brought forward were of a character which would increase the cost of nitrogenous fertiliser and impose an intolerable burden on the agricultural industry of the country. In consideration of these representations, on each occasion the several Governments to which I have referred turned down the proposal. It is of interest too, and the House should note it well, that in respect of at least two of these proposals the product which it was proposed to produce is now generally deemed to be unsuitable so that we may thank our stars that millions were not in the past invested in the production of that commodity because, if there had been, we would now be constrained to make do with something that was not the best. In that respect this proposal has an advantage because, if this factory is adaptable for either the production of sulphate of ammonia or calcium ammonium nitrate, so far as I am aware, these two commodities between them represent an adequate spectrum of nitrogenous fertiliser availability for the agricultural industry, given the information we now have as to the most satisfactory medium for the application of nitrogen to the soil.

I want to dwell with special emphasis on paragraph 27 of the White Paper circulated by the Minister with this Bill. Paragraph 27 reads as follows:

As already stated, however, the Government are fully satisfied that this industry can make nitrogenous fertilisers available, without subsidisation or protection, at prices at least as favourable as the present import prices.

I read that statement with relative satisfaction, but I was not quite so happy when I looked at paragraph 36 of the speech the Minister made to-day.

There is moreover another potential advantage. Dumping will presumably be prohibited in free trading conditions. Consequently there can be no expectation of a continuation of the current low level of import prices.

Now, dumping has a thousand meanings, according to whoever uses the word. Is it dumping if we can buy Chilean nitrates cheaper than fertiliser produced by the European cartels? I do not think it is, and the House should know that, when I was Minister for Agriculture, I was on one occasion notified by the nitrogen cartel that in the coming season the cost of sulphate of ammonia would be increased by 15/- per ton. I got sanction forthwith from the Minister for Finance to enable Comhlucht Siúicre Éireann to embark on a programme of importation of Chilean nitrates and that programme had not begun before the representative of the European nitrogen cartel called on me to say that the proposed increase of 15/- a ton had been cancelled. I told him I was much obliged for the information “but would he mind telling me why had they ever proposed it.” He looked at me and said, quite frankly: “Well, after all, Minister, sure, there was no harm in trying.” I said: “I suppose there was not but was it not fortunate there was someone here who headed you off before you got away with it?” We parted on terms of cordiality.

Now, I want to be quite clear on this: If supplies of nitrogen can be made available to the farmers at prices more advantageous than those available from the continental cartel, I do not want to be told that this is dumping and, therefore, must not be regarded as a price suitable for comparison with the cost of nitrogen from the Arklow factory. This House had better make up its mind to this fundamental fact because there are too many people in this country, particularly in Dublin, all too inclined to float away from it: the whole economic life of Ireland ultimately depends on the land of this country. The President of the French Republic is at the moment squaring off to the whole Free World because he says he has a community to preside over in which 20 per cent. of the population are involved in agriculture and therefore he has an interest in maintaining price levels and profits for the agricultural industry not comparable with any other country in Europe.

Forty per cent., if not 50 per cent., of our people are involved in agriculture, not to mention all those engaged in industries based on agriculture, such as the creamery industry, the bacon curing industry, and a variety of other industries whose basis is the land and whose existence is dependent on the land of this country being able to produce the raw materials required at prices which make it possible for these factories to carry on. I could read a list of them a mile long. I give you the bacon and creamery industries, the dead meat industry, the leather industry, the felling industry, which deals with sheepskins, and a variety of others. I do not think it is unreasonable to say that between 50 per cent. and 60 per cent. of our people are, directly or indirectly, depending on agriculture for a living in this country.

We are in the difficult position that we may not be allowed into the Common Market if the present negotiations collapse. Our farmers will have to accept world prices which are not necessarily fair prices for their exporting surplus. We are trying—and every country is trying in some measure —to divorce world prices from domestic prices, but, in the last analysis, you will find that the domestic price for any commodity for which there is an exportable surplus will drift slowly towards the export price, in spite of whatever precautions are taken. Fix the price of butter for the domestic market in a measure substantially higher than that which is exported and butter will start trickling in over the Border leading to cut-price butter on sale in Dublin and in every town in Ireland.

We are faced with the fact that at this moment we are obliged to pay world prices for such commodities, as are not protected by the 1948 Agreement. That largely consists of some cattle and, in some measure, sheep. It is true that most of us in this House welcome the prospect of the Common Market in the belief that we would accept the more realistic concept that the farmers are as much entitled to live as independently as any other section of the community. They are entitled to a standard of living at least approximately equal to those in industrial employment, and industrial employment is now coming more and more to mean a five-day week, a 45-hour week. There is no farmer in this country who has a five-day week. A cow has to be milked every day of the week and a pig has to be fed every day of the week.

The monetary reward derived from work on the land bears little or no comparison, even at present levels, to the monetary reward in almost any other walk of life in this country. It is the industry which rules the destinies and circumstances we may encounter here when we consider this project. I want to make no invidious comparison but I am prepared to say this. I cannot persuade myself that the Minister for Industry and Commerce will come in here and pledge his word to this House with statements which he believes to be untrue. I am very constrained to accept what he says and I take it he is pledging his word that facts set out in his statement here today are true, to the best of his knowledge or belief. I make no apology at all for our position in this regard.

I have given this matter most protracted consideration. Neither I nor my colleagues have information enough to make a full technical examination of this project but the Government ought to have. I had the peculiar experience myself of consulting a variety of authorities and one adviser says the thing is unviable—"It can never work; there must be a very substantial increase in the price of nitrogenous fertiliser or else a substantial defalcation on the redemption of the capital and its service." That man sticks to his opinion now. The second advisers came with substantially the same story and they come back in a fortnight and say: "We want to withdraw what we said before; we do not take that view any longer; we take the view that this thing can work."

Then I have before me a copy of a report prepared by Mr. Crotty, which he submitted, I believe, to the Irish Creamery Milk Suppliers Association. It reaches the conclusion that this project is viable and should be approved by Oireachtas Éireann; and he is advising a body of farmers. Then, on the advice of the late Professor Wheeler, who was perhaps one of the most distinguished experts on chemistry in this country, and who in the last pronouncement he made before his untimely and universally regretted death, declared himself in favour of this project.

It is extremely difficult in these circumstances to say that you condemn it. It is an immense expenditure of public money. The capital investment involved in this enterprise is as great as the capital originally invested in the Shannon Scheme. On the other hand, if the undertakings as given by the Minister are valid and true, then that substantial capital can be serviced and an economic project can be made available, employment given and the agricultural industry put to no cost. If these propositions are true, how can anyone oppose the scheme? But let the House remember the minimum annual application of sulphate of ammonia, or its equivalent, to the land of Ireland ought to be in the order of one cwt. to one statute acre. I regretfully assert that the consumption of 150,000 tons of nitrogen per annum on the land of Ireland is an object which we should easily reach, and far exceed, if we had a proper agricultural advisory service operating in this country, which we have not; but that is another day's work. I have no anxiety in regard to our ability to consume more than 150,000 tons of nitrogenous fertiliser per annum.

If there is a differential in the price charged for the nitrogenous fertiliser by this factory over and above what would be otherwise available to Irish farmers from world markets, that is the equivalent of levying a tax on every acre of arable land in this country. If this Government, or any Government, are responsible for such an outrage, their name will go down in infamy.

I direct the attention of the House to the categorical statement in paragraph 27 of the White Paper in which we are assured that nitrogenous fertiliser will be made available without subsidisation at prices at least as favourable as the present import prices. But what happens if fertiliser were to become available at prices substantially less than the present prices? I should like the Minister to answer this question. The House is entitled to an answer because we have to sell butter abroad; we have to sell eggs abroad, if we have any to export. We have to sell everything else abroad at whatever price it will fetch. Supposing the price of nitrogenous fertilisers goes down, however, and farmers have an opportunity of buying them at substantially less, what will the position be then? Will our farmers be denied access to these reduced prices or will we continue to allow the farmer to have access to nitrogenous fertiliser at the best price he can get anywhere in the world, as we did when we authorised the importation of Chilean nitrogenous fertilisers, because they have to sell their surplus on the world markets?

Remember, if we start levying taxes on the fundamental raw materials of the agricultural industry of this country, the whole economic fabric of the nation will collapse. That is one question which I categorically ask the Minister and I suggest he has an obligation to answer it.

The second question I want to ask is this : has his attention been directed to the report submitted by Mr. Crotty to the Irish Creamery Milk Suppliers Association and, if it has, has he found difficulty in communicating to us the economic costings of this end product, sulphate of ammonia, from the Avoca factory? I do not know why he finds this extraordinarily difficult. I do not see why he should not tell us what it will cost to produce sulphate of ammonia. On page 16 of the memorandum, an estimate is made of the likely cost of production of sulphate of ammonia at the factory and it is made up on the following basis: Raw materials, £3 7s.; labour, £1 16s.; power, £1 6s. 8d.; maintenance, 10s.; depreciation and interest, £4 2s. 6d., a total of £11 2s. 2d. It was pointed out that no guarantee of precision could be given with such approximate calculations and that, therefore, a safer figure would be £12 per ton, the factory cost. Do these figures correspond with the information the Minister has as to total cost?

I should like the Minister also to elaborate somewhat on paragraph 36 of his speech in introducing this Bill. The Minister says, at paragraph 40: "I am aware of a number of commercial quotations for deliveries of ammonia to this country" and then refers to ammonia, which is one of the raw materials of the industry, "based on natural gas". He continued: "I can assure Deputies that such supplies are in no way competitive with the guaranteed production costs based on the use of fuel oil at the Arklow factory." That is an important undertaking and inasmuch as the Minister gives it as his own undertaking, I feel constrained to accept it.

He assures us at paragraph 8 that the most exhaustive investigations have satisfied him that nitrogenous fertilisers can be made to meet the growing requirements of Irish farmers at prices at least as favourable as the prevailing import prices, without protection or subsidisation.

At paragraph 16, he says:

Nítrigin Éireann Teoranta have confirmed to the Government on the basis of the capital investment required and of the production costings guaranteed by the contractors that, using fuel oil, limestone and imported sulphur, sulphate of ammonia and calcium ammonium nitrate can be produced at Arklow at prices which will ensure that Irish farmers will continue to receive their requirements of these fertilisers at the present favourable levels.

I was struck by the figure he gives for the daily consumption of water by this factory, which he says runs between 1½ million and 2 million gallons. I assume that adequate surveys have been carried out and that the water supply of the Avoca river will be adequate to meet that demand.

I should like the Minister, however, to elaborate on paragraphs 35 and 36 of his speech and to re-assure me and the House that there is no sinister significance in the statement:

There is, moreover, another potential advantage. Dumping will presumably be prohibited in free trading conditions, consequently there can be no expectation of a continuance of the current low level of import prices.

That is not to be taken as any qualification of the Minister's assurance given in the previous paragraph that this undertaking assures the supply of nitrogenous fertilisers to Irish farmers at the prevailing favourable prices?

The whole project boils down to this. If this enterprise ensures the supply of nitrogenous fertiliser to the farmers of this country at prices not in excess of those of nitrogenous fertilisers from any other source, then this project is to be commended. If this project results in our being saddled with an investment of £6 million or £7 million of public money, which involves either the farmers paying an annual tax in perpetuity through the purchase price of nitrogenous fertilisers, or the taxpayers being called upon to pay an annual levy in order to subsidise the project of this factory, then this project should not be proceeded with.

There is a suggestion from the Irish Creamery Milk Suppliers Association that if the prices of nitrogenous fertilisers fall in world markets, our farmers should continue to import the nitrogenous fertilisers at world prices and that the entire output of this factory should be exported to Great Britain and Northern Ireland under the 1948 Trade Agreement and thus benefit from some of the cartel prices which it is suggested will continue to be substantially higher than the cost of production here at home. I cannot believe that holds out a very fruitful hope for an industry of this kind, but our position is that if this enterprise will provide the farmers of this country with nitrogenous fertilisers as cheaply as they can get them anywhere else, then it ought to continue on. If, however, it means an annual tax on the farmers or an annual levy on the Exchequer, then it ought not to go on.

We are constrained to accept the personal undertaking of the Minister, speaking on behalf of the Government, and I am proceeding on the assumption that the Minister would not suffer himself to be made the instrument of misrepresentation in this House. On that understanding, we are prepared to give this thing a run, but there then devolves on the Minister a very special and peculiar responsibility. He has certified his facts. If these be true, we are not opposing the Bill, but if they should prove false, the responsibility is his and he will have to answer for it when the birds come home to roost.

Debate adjourned.