In conjunction with this Bill we are taking Vote 44, Industry and Commerce.
Private Members' Business. - Nítrigin Éireann Teoranta Bill, 1962 —Second Stage (Resumed).
Question again proposed: "That the Bill be now read a Second Time."
The attitude of the Opposition to this matter has already been clarified by previous speakers on this side of the House, but it is no harm to say that the Opposition, like the Government, must keep in mind the employment that will be given in a project such as this. It is their function in public, as it is the Government's function in private, to examine analytically and with the most critical eye the question of whether or not the costs are to be greater to the Irish farmers as a result of Nítrigin Éireann being set up.
I wish this project well. The Government without the vote of this House, proceeded to place contracts and, therefore, as never before in any other case that I know of, responsibility lies directly with the Government and not with Parliament. The Leader of the Opposition made that clear to the Minister and gave the opportunity to him, when replying, to accept that responsibility. The Minister, and the Government through him, will then have the pleasure of saying that the project will not in any way impede the opportunity of the Irish farmer to get his goods and his raw materials at as cheap a price as he can and sell his finished product as well as anybody else at prices similar to those obtaining in world markets, where he must compete.
The information given to us is scanty; it is sketchy. It is skeleton information which tells us no more than that which we could possibly get in any reference book on such a product. While the information is sketchy, it is valuable and I do not want in any way to be excessively critical of the project. I do think it is necessary from this side of the House to draw attention to certain facts in relation to the raw materials. The raw materials for this enterprise are comprised of oil, sulphur, power, money, men and presumably labour and will not be any more expensive here. In my opinion, it will be, on the average, of better quality than anywhere else.
Whilst there is a slump of sulphur on the world market at the moment, there is no guarantee that it will continue. For each ton of sulphate of ammonia used a quarter-ton of sulphur is used so that we are at the mercy of the world market. The price at which we get it is very often not the price at which our competitors get it. The buyers of our finished products may also be the sellers of our raw materials. That was very true of the production of steel up to the time of the idea of the European Coal and Steel Community. You had the situation whereby those who manufactured steel would further process it themselves at one price and sell it to their competitors at a different price and put them out of the market.
If you take sulphur, we are in the position of a buyer who must buy from somebody else. That is even more true in the case of oil. We have a figure given us of one-fifth of a ton of oil or about 450 lbs. of oil, and at 10 lbs. to the gallon, we get 45 gallons of oil. Whether it is in the making of sulphate of ammonia or calcium ammonium nitrate or anything else, a difference of 1/- a gallon in the cost of oil can make a difference of £2 5s. 0d. per ton in the cost of the product. That is not a savage criticism on my part but it is an expression of fact that cannot be refuted. I am assuming that ordinary oil that can be sold without tax at 1/6d. a gallon will be used and in that case, it is unlikely that we would get the difference of 1/- a gallon, but if you went as far as America or any place where oil is processed, then I am certain that that shilling would be there and that it would offset the cost of shipping the nitrogenous fertilisers here.
There is also the question of power. Power is going to be used to the extent of about £200,000 worth. You can take your pick of how much of that will be manufactured from oil, peat or water. We have come to the end of our opportunities for the production of electricity from water power and are proceeding with the other two. If the power is to be manufactured from oil, we are completely dependent on imported raw material. The Minister did not give us any comparison between the proposed factory at Arklow and factories elsewhere in the matter of size. He did not say that the normal factory elsewhere has twice the capacity of our factory, that it has the same capacity or that other factories have five times the capacity or any such figure. I think he should have given us those facts. It would give us a better indication as to whether this will be as viable a project as is suggested.
As far as this side of the House are concerned, we are as solicitous of the welfare of those who lost their jobs in Avoca as the Government or perhaps more so. That is one of the things that condition our approval of this scheme, an approval that might be described as conditional. We have approved of this project on the basis that the Government and the Minister accept full responsibility for it. If we envisage an expenditure of £6 million for the employment of 300 people, it is easy to calculate that the cost per person is £20,000. If we invested that money at 6 per cent. each worker could stay at home and draw £1,200 a year without getting rid of any of the capital.
That is not the proper way to look at it because the cost of the employment of people can range from £1,000 to the figures that have been put before us but it is true that the expenditure here, relative to the employment produced, is of a very high nature. While one could not say that it tends towards automation or anything like that, which has more reference to the assembly business than a project such as this, it is a very high figure, a figure of such a height that other very great advantages would be needed to justify it. Money is not plentiful in this country. Capital money for investment for the employment of our people is extremely scarce and a sum which if invested at 6 per cent. could produce the income I have mentioned, is a high figure of investment in an employment-giving project.
However, you cannot look at it in that way. The people in Avoca have lost their jobs and if this is to help in providing employment, if it is not to be a loss, if everything said about it is correct, then there is nothing done that should be undone and we will have helped the economy of our country in every way.
The White Paper issued by the Minister seems over-anxious to justify the expenditure. It is quite clear that the expenditure is extremely high, even when we see, in paragraph 14 of the explanatory memorandum, that there will be a new market for two million sacks per annum. The cost of a paper sack to hold a cwt. of nitrogen is about 1/- and it is an easy calculation to work out that two million sacks would result in a turnover of £20,000, so that we are talking, in connection with a project of this size, in terms of the turnover of a publichouse and grocery.
Are you for it or against it ?
I am for it, as long as you accept complete responsibility for it.
You are criticising a figure which I gave in explanation of the project.
It is my function here to analyse and critically examine the entire project in this way, to put these things on record, and, having put them on record, to wish the Minister well and express every hope that the project will be the success he has said it will be. It is right of us to examine critically this project and line by line. That is what we are here for.
I have given you all the facts possible and now you criticise some of the facts I have given you.
I say that the explanatory memorandum has gone into such detail in regard to particular things that the suggestion is that the examination of the project was pretty exhaustive when we had to come down to such things as the shilling sack.
The examination of the whole project was as close as just that. It went even into the cost of sacks.
That is excellent. That is what we want.
Is the cost of the sacks not a very small fraction?
It was taken into account in the costing of the project.
I notice that the amount which the Minister for Finance holds as share capital is extremely small. I asked a Parliamentary Question yesterday as to what would be the position in the Common Market in relation to State-sponsored bodies and the repayment of capital and interest. I got the answer that, as far as share capital was concerned, we could proceed without any limitation, but if there was a question of a loan, that matter would have to be examined under Article 93 of the Rome Treaty and that pending such examination, the Minister could not say whether or not such would be obligatory. We on this side of the House must seek rather the same undertakings as the Irish Creamery Milk Suppliers Association sought at page 21 of their memorandum. I quote from the memorandum:
"That their finding"—that finding was in favour of the project—"is subject to the following two reservations: that the ICMSA seek from the Government an unequivocal assurance that in the unlikely event of the factory coming into financial difficulties these difficulties will be resolved by direct State assistance rather than by any interference whatever with the Irish farmers' right to buy nitrogenous fertilisers from the cheapest available source."
We have here an answer to a Parliamentary Question which says that the Minister for Finance does not know whether or not, if the factory is going badly, he will be in a position to waive interest and repayment.
The Rome Treaty would specifically forbid him to subsidise this fertiliser as long as the fertiliser was coming in from abroad, as that would be unfair competition. How can he give this unequivocal assurance? It is all extremely difficult and, if we are in the EEC, we may be in a position wherein we will be selling only one-tenth of the produce of this factory at home because, if the ports are free, is it not true to say that the distributive organisations, the large seed wholesalers and importers, will establish links with nitrogen factories in Britain and on the Continent and bring in nitrogen here, nitrogen which will be sold presumably at the same price as the home product?
If the home product, without subsidy from the Government, cannot hold its own, then the producers are out of production. But if they can just break even, I would suggest that, if all the different wholesale seed organisations in the country, such as the Irish Agricultural Wholesale Society, and others I do not wish to mention, all make their different links with the three or four different manufacturing bodies outside this country, is it not true that they will all take their slice of the trade, and we will not all be so patriotic as to insist on buying Irish nitrogen? They will all take their slice of the trade, and we will have to export. If we have to export, are we capable of doing it at the same price? If we have to export, will we be given sulphur and oil at prices which will allow us to export? Will the numbers employed be such that we will be in a position to produce at the proper price? These are the questions which the inadequate information given poses and it is in no spirit of condemnation that I pose them from this side of the House.
There is a figure for employment. Salaries and wages, the annual outlay, are shown as £200,000 to £250,000. That seems small because there is a figure quoted of 300 employees and, if you divide 300 into that figure, or into somewhere between the two figures you get a wage of about £8 per week; but if you refer to the ICMSA memorandum on the subject, you find that there are about 50 out of the 300 who will be technicians, chemists, engineers, and all the rest of it. I would calculate that these 50 would have, at a minimum, double £8 per week. If that is correct, what wage then will the others have? Or is this figure correct?
These are the questions we have to put to the Minister. We do not like being difficult; we do not think we are being difficult in this matter. This is something that has been examined many times before. The Minister now comes along and says: "My experts tell me it is now all right; it can be done." I think the Opposition are going very far when we say: "Very well; we accept this, but we want the Minister's solemn assurance; that is all we are asking for."
The Leader of the Opposition quoted Paragraph 27 of the explanatory memorandum. I should like to quote it again:
As already stated, however, the Government is 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.
That is all we ask. There is, of course, the other eventuality. If we do not get into the Common Market, and we have to remain outside it, will we still be in a position to get the dumped nitrogenous fertiliser from within the Common Market which it is suggested we are getting at the moment?
Again, the Irish Creamery Milk Suppliers Association memorandum suggests there is over-production of nitrogen — slight over-production — in Europe at the moment. If that is so, and if we want to unload a little outside the Common Market, not being permitted to do it within, will we then be in the position that we will be precluded, either by tariff or quota, from enjoying that dumped nitrogen? These are the problems. I am not trying to pull this down. There are 300 jobs. We have made our decision. We support the Government, but we ask the Government to accept full responsibility; we would not ask the Government to accept full responsibility if the Government had given us all the details we require. They have not been forthcoming. It is a case of "over to you" now. The Government have the responsibility and it is our duty to point that out.
I think it was Deputy Norton who commented earlier on controversy over important measures such as this. He was not very far out when he said that the magnitude of the controversy this Bill has aroused, is a measure of its importance. The amount of controversy that has taken place is an indication of its importance.
From the positive point of view, what is the purpose of this project? The purpose is to provide material for increasing the productivity of our own land. That in itself would justify the project, were it not for the fact that there is the possibility of supplying that deficiency by importing fertiliser. The question then is whether it is desirable to depend on imported fertiliser or to produce it here ourselves. Up to this, the answer to that, in the economic context in which we live, has been a very simple one. If trade is in your favour, then go on trading. But what do you do when trade turns against you? I think it was overall considerations of that nature that led successive Governments, and the many people who thought about the matter, to the conclusion that it was desirable, highly desirable, to make the effort to produce fertiliser here at home and only serious price obstacles should be allowed to block the project. The situation was very similar to the situation in regard to our trade generally since we tried to strike out for ourselves in this community.
My own interest stems from the experience gained in the last Emergency. There was an acute need for chemicals here. We were practically in isolation at the time. The approach to the problem was through the lessons learned at that time as to what can happen when we are deficient in basic chemicals and basic chemical industries. That seemed to be further reinforced by the example of what could be done in other countries, countries with territories comparable with ours, to supply such deficiencies. It was for that reason also that this project appeared attractive because not only did it appear to be a project which was aimed at increasing productivity in our fundamental industry but it offered us a hope— indeed, it seemed the only hope—of building some semblance of chemical industry to supply some of our other chemical needs.
On another occasion here, I outlined, I think, how such industries would naturally be associated with a fertiliser industry. I need not repeat my arguments now. I should like to say, however, that the dual experience of the Emergency Research Bureau during the war in regard to explosives, on the one hand, and certain other fundamental chemicals, on the other, all pointed towards the need for creating a chemical industry here; and the only way to create it would have been by setting up a fertiliser industry here. It is from that point of view that I personally became interested in the subject. That was approximately 20 years ago. Before that, there had been a consideration of the problem both from the point of view of an explosives factory for the Defence Forces and also from the point of view of a fertiliser factory. For various reasons, the project had not matured before war broke out. One of the reasons was an argument that is still continuing, an argument as to whether ammonium sulphate is a fertiliser of lasting value. Whatever the reasons were, the project did not materialise. During the war, on more than one occasion, we had reason to regret that something had not been done. After the war, therefore, determined efforts were made to solve this problem.
Now we must be realistic about this. Technology is not static. During the course of the examination of this problem, there have been developments in techniques. There have been changes. I should imagine it was difficult for the experts who examined this within the past ten years to make decisions, for the simple reason that there were very large developments linked with the use of hydrocarbon oils and gases in the basic synthesis in this process as against the solid fuels. That fact alone explains why—it may seem serious to some people—it was necessary to change the proposals, apparently radically, within the past few years. I think it no harm to mention that aspect of the matter here, because of two questions asked earlier in the debate. One was—if it was not asked explicitly, it was certainly implied—why the change? There was reference to the change of plans. Why the change from peat? The other reference—I think it was by Deputy Norton—was as to what other industries could be based on the fertiliser industry.
The answers to these questions are tied up with a rather spectacular development in the technology of using natural and fuel gases for such purposes. In passing, I would mention, in answer to Deputy Norton, that there is even the possibility of synthetic rubber, plastics, and industries of that nature, associated with the turn-over to the gas process proposed here as distinct from a solid fuel process using peat. However, that is one of the things naturally associated with developments of this nature. I shall not be surprised if, even before the factory is finally completed, there are some further improvements in technique which it may be possible for us to incorporate.
There is one aspect in particular to which we should advert here. One cannot be absolutely final and definite in technical proposals of this nature. The Minister, or anybody else, has no guarantee that some new circumstance of a technical nature, apart from the economic side of it, may not intervene and make it necessary for us to make further adjustments. I think it is only right that should be said on this occasion. I have already instanced the development in technology by the use of fuel and natural gases. Originally one thought of producing the ammonia, using peat as one of the processes in making the hydrogen. Now the situation is different. We have no guarantee that circumstances may not again intervene, but, if one waits until there is an end of development, or until one thinks one has the last word, then one will wait for ever, and do nothing.
We should be clear, I think, that we are dealing with a practical problem. We have to make a business decision here. One cannot guarantee that one has absolute certainty and finality for all time at any stage in such a project as this. The "have-it-both-ways" attitude of Fine Gael, if the last speaker's attitude is to be taken as interpreting the Fine Gael attitude, may be politically clever, but it is certainly neither a realistic nor a practical way in which to approach a problem like this. A decision must be made. The Party opposite should face the situation. They have to make a decision too; they either support it or they reject it. It is not exactly appropriate, to say the least of it, to try to straddle both sides of the fence. The decision is not that simple.
I repeat that this project has been, as the Minister said, thoroughly examined. Proposals have been adjusted to date. There has been a long enough period of examination to permit of a reasonable prognostication of the future, but nobody can guarantee that some new factory may not intervene. The same argument holds good in relation to the question of price. I will not attempt to guess at what Common Market conditions could mean in this sphere. I still instinctively feel that, if we can produce fertiliser here for our own farmers and achieve stability in that way, that is a good thing anyway. I will not attempt to analyse a situation that to date is not capable of analysis. I am sure that is a factor that has been taken into account in the various Departments involved because it is only such Departments, with the full information available to them, which can, as the Minister said, really make a rational estimate on so broad a basis as that involved here.
Again, since this House has the right to direct these things and will assume its responsibilities in this matter, it is only fair to say that there are possibilities. For instance, there has been a rumour of a huge strike of natural oil somewhere on the Continent. That could significantly affect prices. I am sure all these things have been taken into account.
Lastly, I should like to say—this is a purely personal opinion, and I make no apology for it—our agricultural industry is so important, and the basic production from the land is so important, that, looking at the quantities involved, the sums likely to be involved should not be prohibitive. If I were put to the test, I should not hesitate to make moneys available for this project even if it involved something in the nature of long-term loans, or something like subsidy. This industry is of such importance to the farmers, to the country generally, and to all of us that, if it were necessary, we should be prepared to subsidise it. That is my personal view. I am stating it simply because I happen to be a city man and I think city people and townspeople generally do realise the importance of the farming community to us and the importance of the farmer's place in the community and his production for the community. I believe everybody should be prepared to co-operate with the farmer in getting efficient production. As I say, that is my own opinion. I stress that and say that, if anyone is to be beaten with that stick, it should be I. It is I who am responsible for it.
I do not stress the defence aspect of this. Fifteen years ago, I would have made a strong case for this factory on the basis that it would provide us with certain reserves of explosives and food resources in time of war. The defence situation has changed in the 15 years and that statement may seem somewhat naive now. I do not base my case tonight on it, but I think it is always sound policy to be conscious, at least, of provisions that may come to one's aid in time of emergency. In time of emergency an industry of this nature would be of great value to us.
There is one aspect of the matter about which, from a technical point of view, I am not completely happy. It goes back to the 1930s. It is the question of the manufacture of ammonium sulphate. This has been so discussed that it has, I am afraid, prompted a partisan following on both sides. I want to avoid that if I can, but I think we should examine the question from a number of points of view. First of all, let us admit—this is a big economic factor in the situation—that the Irish farmer is traditionally, as the Minister stated, wedded to ammonium sulphate and, if the consumption of nitrogenous fertiliser went up, the consumption of ammonium sulphate went up, as well as the consumption of calcium ammonium nitrate. It could be argued the Irish farmer still wants ammonium sulphate. Maybe he does. Maybe that is tradition. But we should not lose sight of certain facts. The first is that in other countries, in progressive agricultural countries, ammonium sulphate has given way to more efficient nitrogenous fertilisers.
The second factor is—it is one I shall deal with more deeply in a moment — that ammonium sulphate from the point of view of active fertiliser is relatively inefficient. The third one, something that is not to be lost sight of, is that if the farmer and fashion abroad lean towards fertilisers such as ammonium nitrates of some sort or urea, then the manufacture of ammonium sulphate may go down. If importation is free, we gradually come over to the new fashions and ammonium sulphate will go out, even amongst the Irish farmers. These are three factors which should be taken into account in deciding to make ammonium sulphate here and the proportion in which we make it.
I will repeat the point I want to develop, which is the actual efficiency and usefulness of ammonium sulphate. The Irish farmer has a tradition in this matter and in order to deal with this, perhaps I might be allowed to digress a little on the process. There is no question on the manufacture of the ammonia. It will be made by a process which depends on getting hydrogen from the fuel used and the nitrogen of the air. It is the nitrogen in the ammonia which is active; it is a question of how to supply it and get it into the soil.
There are two traditional ways of doing that. One is to take ammonia with sulphuric acid and put it into the soil. In that case, the sulphate is acting as a carrier and it has so much dead weight—something like 36 parts of the weight is active ammonia out of a total of 132 parts. The rest is merely carrier. This is ammonium sulphate, but the sulphate is merely a carrier as far as I understand and has no fertiliser value.
There is another way of using the ammonia, that is to turn some of the ammonia into nitric acid and use the nitric acid as carrier, in which case the nitrogen in the nitric acid is available also and there is a bigger availability of nitrogen.
Pure ammonium nitrate has its particular peculiarities. Five years ago, I would have asked for it because it was explosive. It is not as important a factor now and therefore I will not press that aspect. I will admit that concentrated ammonium nitrate has certain disadvantages from the handling point of view but where limestone and lime have to be used you can get calcium ammonium sulphate or a mixture of that sort. We are providing in this factory for the manufacture of ammonium nitrate and nitrate fertilisers in various forms. That is desirable, but I would ask the question as to whether we should not face the issue now, as to whether we should build on the basis that ammonium sulphate will fade out and will be substituted by a more efficient modern fertiliser of, say, the ammonium nitrate type or even possibly urea.
I am raising that question here now for two reasons. First, I am not satisfied with the Department of Agriculture traditional view, as I understand it. I admit there is a problem here when the farmers are preferentially buying it but there is also a long-term problem here. It might clear the air, if the view I have expressed here is wrong, if some authoritative statement on the value of ammonium sulphate, as compared with these other fertilisers, should come unequivocally from some such body as the Agricultural Research Institute. I think the air would be cleared if we got a definitive statement from the agricultural experts. We have an Agricultural Institute, with a Director and all the rest, and a statement from them might, for one thing, stop people from speaking about such subjects without full information.
It seems to me that that is something which should be finally disposed of one way or another so that we may know where we stand. Will we take an inefficient fertiliser merely because the Irish farmer will insist on buying it, or will we have a change for the better? Is it the right fertiliser to make? On top of that, I again make the point in order to indicate that there may be changes in development here. We should be prepared to accept this Bill and the proposals in it to have this factory set up on the basis proposed and have an open mind with regard to development which will follow.
Unless there is some good agricultural reason—not merely a traditional reason—to justify ammonia sulphate as a fertiliser, we should, while commencing in that way, be able to turn our production, so far as nitrogenous fertilisers are concerned, in other directions. I do not think that would be a complete loss. Ammonia sulphate is the result of a process in which you use sulphuric acid and the ammonia as manufactured otherwise. Sulphuric acid is a commodity which can be turned to several uses and a sulphuric acid plant would be one of the basic essentials of a chemical industry.
What I am saying should affect our approach. It is a subject which has bedevilled this project right from the beginning. Some effort should be made at this stage to be definite about our outlook on it. A relatively inefficient fertiliser, more than 50 per cent. of which is useless matter, is being put into the earth at the same time as you are putting in the useful nitrogen. It may be that there is some virtue in the other that I do not know about. If there is, let us be told about it and let the project be justified on that basis. The Agricultural Institute should make a definite statement in that regard.
Experts whom I have spoken to maintain that ammonia sulphate is inefficient in that the sulphate half has little or no value in the soil. If that is the position and that we are basing this on what the Irish farmer has traditionally bought, I am wondering whether the proper thing would be to win the Irish farmer over to a more efficient fertiliser rather than to produce the less efficient one just because he wants it. I have strong views on it in so far as I am entitled to them. I should like to emphasise again for our purposes here that that argument does not affect the validity of the proposals as a whole. The fundamental things in this factory remain the same. I would hope, as a matter of fact, that it would form possibly the nucleus of a chemical industry for us. Where you have ammonia sulphate or ammonium nitrate a sulphuric acid plant will have its own advantages. We should undertake a sulphuric acid plant unless existing installations are wholly adequate. Our social reasons for not using the pyrites are eliminated. There is a lot to be said for using straightforward sulphur from the point of view of a sulphuric acid factory.
Is it a dream to hope that other basic element in a chemical industry may grow up here some day? It is not directly associated with the fertiliser industry, but a chlorine plant, for instance, and other chemical installations may give us an opportunity to develop this community industrially. We need some kind of equivalence with the others in the environment in which we may find ourselves. There are certain advantages in this island site. There may be possibilities in such industries for us, apart from our uses at home. For that reason, apart from the basic reason for this industry, I welcome this proposal. I am glad to say that this Minister has brought in at least a practical proposal and that we now have a Bill before us to implement this proposal.
I do not think it will be necessary to refer to a number of things which were said about this proposal. The Minister has quite adequately answered those who attacked him about the site. The picking of a site for an industry of this nature is always a difficult matter. I think everybody is satisfied with the choice as ultimately made here. The objections that were put forward to the site are not in the same class as the economic objections urged at the beginning.
There is one small point in regard to the title of the Bill which, to the mind of a chemist, might be a little confusing. Why spell Nitrogen, in the Irish title, "Nitrigin". It is not an Irish word. The general word "Nitrogen" is a coined word with a Greek or Latin ending, "gen" having the same root as "generated". It was called Nitrogen in English because it generated nitrate. The French have a word of their own for the element, but Nitrogen is internationally accepted, and the syllable "gen" has a meaning. I object on technical grounds, because chemists are wont to use vowels for specific purposes.
Why not call it in Irish "Nitrogen"? Is there any justification for turning "Nitrogen" into "Nitrigin"? We should be able to talk about chemical subjects in Irish. However, if we are going to take the terms and change them in such a way that there is a danger of confusion in the chemical nomenclature it will benefit none.
It is in order to make that point here. I do not see why it could not be "Nitrogen Teoranta". It would be different if we had a new word of our own. The French have a word of their own for it. If I could translate it into "ábhar nitrate" or something like that, that would be fair enough. That would be a fair translation. It is only a small point but if you are dealing with chemical nomenclatures, in the language of chemistry, words have very significant meanings.
That is all I have to say. I think I can claim to have had some little knowledge of, and an interest in, this subject for some 15 years. I know from my own personal experience that even the enthusiasts were careful to weigh the pros and cons.
On that note, I should like to join with the Minister in his tribute to one of the great Irish scientists of our time, Professor Wheeler, who died recently. I had the privilege of working with him during the Emergency and I knew his thoughts on this subject rather well. We often discussed them and I know the care with which he personally went into this matter. I know he was a man who was very careful and critical about these things. I think this is an appropriate occasion on which to pay a tribute, as the Minister has done, to his memory. He was one of those Irishmen who had a deep scientific and technical knowledge with the optimistic driving outlook that gets things done, and who believed that we could, and would, develop in this country. Apart from the work which he did in this field he re-created his own Department, and met the challenge of the times and was building further. It is a great tragedy at this stage to have lost such a man and I should like to join with the Minister in paying a tribute to his memory. Indeed, I know that the work which he did is bearing fruit and, when this fertiliser factory goes into production, it will be in a sense a monument to his thinking in the initial stages.
It is difficult to know where to begin in connection with this matter. I will just quote a few words to follow a certain line in connection with it. It is stated in the explanatory memorandum:
"the Minister for Industry and Commerce appointed a Committee to examine the economics of a factory to compete freely, without protection or subsidisation, with imports and to meet the Irish farmers' requirements of nitrogenous fertilisers at prices in line with the prevailing import prices."
A good deal of the publicity and anxiety associated with the proposed establishment of this factory comes from a feeling amongst the farming community that if, and when, this industry gets going it will not be able to compete with the huge factories on the Continent producing nitrogenous fertilisers at competitive prices.
We saw the other day that the Irish Creamery Milk Suppliers Association gave their blessing to this proposal, but, having given their blessing to it, they immediately asked for an assurance, if this proposed industry folded up, that the farming community would not be required to contribute towards the losses involved. Whether they like it or not, whatever the costs in connection with this industry may be, the farmers are the people who will be primarily concerned. In the production of agricultural products, having regard to our agricultural economy, whatever projects come to the wall it is eventually the basic economy that must meet the cost.
It was mentioned in this memorandum that the farmers have been enjoying very favourable prices for nitrogenous fertilisers during the past four years. However, the memorandum says, in connection with this proposal, that these import prices cannot be controlled. We have to accept the rise and the fall in prices that may occur outside the country. However, there seems to be terrific competition amongst fertiliser firms on the Continent and they appear to be anxious to sell at very competitive and favourable prices to those who are prepared to use their fertilisers.
The Table given to us here shows that the Irish farmer is becoming more conscious of the value of nitrogenous fertilisers and, of course, sulphur of ammonia, which has been the traditional fertiliser so far as the farmer is concerned. The Table shows that farmers are moving more and more towards the use of these fertilisers because they are getting results. The comparison between this country, Great Britain and the Continent in the use of fertilisers is fantastic. There is a very small proportion, or if you like, tonnage, per acre used in this country. The Table here shows that the farming community are becoming conscious of the real value to them, in connection with agricultural production, of using nitrogenous fertilisers. As the memorandum has said, we can look forward to a greater consumption.
While we have this proposal before us we are not being given any guarantee by the Government, or by the Minister, that the prices here will be competitive. We are not being given any guarantee, by reason of the fact that it is to be located in the country, that they will be able to compete and keep out the imported fertilisers.
If the Deputy would read my speech he would see that undertaking given no fewer than three or four times. I do not know why he should make that statement now.
I just turned to one part of the memorandum. As I mentioned earlier, the Irish Creamery Milk Suppliers gave this project their blessing and at the same time they said that if this proposal does collapse they should not be asked to make any contribution towards it. At the moment this organisation are crying out loud regarding the prices being paid to them for their milk. The use of nitrogenous fertilisers in connection with pastures is very important. Certainly, if the price of them goes any higher the cry amongst the milk producers will be still greater because it will cut further into their milk costings. That aspect of it does not seem to have been taken into consideration. As I say, they are clamouring for this increase in the price of milk but the price the farmers pay for the fertilisers is going to be very important.
I consider that this is a basic industry. It is one in respect of which there will be a local demand. Our economy is mainly agricultural and we will require these nitrogenous fertilisers at an economic price for the improvement of the land and in association with our production, mainly in relation to pasture. It has been shown already that as far as exports from this country are concerned, meat and milk products seem to be most in demand and the use of nitrogenous fertilisers on our pastures will help the output of meat and milk.
There has been some dispute about the location of the industry. Some people consider that if it were located elsewhere, the fertiliser could be produced at a lower cost. I assume the Minister had to decide on some place, that he had technical advice and is satisfied that the location of this factory will not cause the price to go above a figure at which it could be produced at some other location.
We have been hoping that we will get into the Common Market and, if so, our fertiliser factory here would find itself in competition with the fertiliser factories on the Continent, those very factories which are engaged in what has been described as price-cutting at the moment and which are making fertilisers available to our farmers at prices which are considered to be very reasonable and which have been quoted here as the lowest in Europe, if not in the world. These prices are enjoyed by our farmers at the moment and we can understand the anxiety that exists amongst them when we realise they feel that there is every prospect that they will continue to enjoy them. They feel that there is no immediate prospect that the cost of imported fertilisers will rise and that they will continue to enjoy the benefit of the low prices. As long as the cost of fertiliser to them is kept low, they have a better opportunity of competing in the export markets, particularly in relation to meat and milk.
It is stated in the explanatory memorandum that for commercial reasons of concern not only to the company but also to the potential suppliers of sulphur and oil, it is not possible to quote precise figures of quantities and costs. That is in relation to questions put to the Minister in an endeavour to get basic costings which would give further assurance to the potential users of the fertilisers that they can be assured of getting them at a reasonable price for a reasonably long time, and that there will not be a sudden rise in costings, because they would be obliged to include these higher costs in the price of their exported products.
Deputy Donegan mentioned that this industry is expected to give employment to 300 people. That is a fairly good figure but it is not a great number for an industry designed to supply the nation with nitrogenous fertilisers. It is a proof of the fact that there is considerable automation in this type of industry. There will be a lot of press-button work in it rather than the type of work which has a large manual content. Even if there is a considerable measure of automation in this factory, we can be sure that the degree of automation in factories outside this country, particularly if we join the Common Market, will be still greater. The argument that the factory will provide employment for 300 people is not a very great one. Considering the magnitude of the industry, it is a very small number of people and a great number of them will be technical men.
There has been mention here that the financing of the factory will follow the lines of the ESB, Bord na Móna and Irish Steel Holdings. We all know that of these three, the ESB has been outstanding, but even this evening we listened to a motion from Deputy Tully pointing out that the users of electricity must shoulder what appears to be an unfair burden to keep the financial position of the ESB in line.
The materials which will be used in this factory, mainly sulphur and oil, must be imported and as a result the factory does not offer very much of a demand for native raw materials. While we are talking about the setting up of this new industry, we must at the same time look at the news we have been reading recently in our newspapers, the danger of a considerable amount of unemployment in certain industries, if we become members of the Common Market. The motor industry has been mentioned but several other industries have also been quoted. It has been suggested that there will be considerable redundancy in industry if we became members of the Common Market group and there is no assurance that this is not also an industry which will go to the wall if we became members of the group.
I think that aspect should be dealt with in this memorandum because in these days the question of redundancy in our industry is very much in the minds of people who are examining the impact of the Common Market. I should like to hear from the Minister whether in fact he has asked his experts to consider that aspect and whether we might find ourselves in the situation of the motor assembly industry of expecting large scale unemployment. In view of the fact that we have not native raw materials and must depend on sulphur and oil imports for the manufacture of these nitrogenous fertilisers, is there a danger that these large cartels, fertiliser factories on the Continent of Europe with automation and modern methods, will be in a position to render the production of fertilisers in this new factory uneconomic?
It is very reassuring to read in the memorandum that the Government are fully satisfied that this industry can make nitrogenous fertilisers available without subsidisation or protection at a price at least as favourable as the present import price. That is certainly a very valuable assurance because the prices at which fertilisers are available to our farmers at present are considered to be the lowest in Europe, if not in the world. In our agricultural economy, the price of fertilisers is important since they are becoming more popular and also since it is essential for our farmers to gear their economy and production at a higher level and to have nitrogenous fertilisers for their pastures and crops.
I have no doubt that the demand for these fertilisers will be far greater than anticipated. Of course the estimate here is for the year 1965 and that is fair enough. A quantity of 150,000 tons may be required by the country in 1965. I agree fully that even if we had no factory here, imports would rise to 150,000 tons because our farmers have become fully aware of modern techniques and of the value of using these fertilisers for increasing their output in an economic way. They are anxious to get more from their land within a specified period than they did in the past when they had the old tradition of leaving the land to lie fallow for years on end in order that fertility might return to the soil after it had been removed by the production of one crop or another. They just cannot allow the land to lie fallow now. They must make it productive and nitrogenous fertilisers will do that.
It is also mentioned in the memorandum that this is not a new idea, that successive Governments have given consideration to this proposal. That is quite true. The circumstances now, however, are somewhat different which leaves a measure of anxiety among farmers and which makes us in the House ask questions. The fact that the cost of these fertilisers has been falling rather than rising during the past ten years makes one wonder whether modern methods will find a way of producing fertilisers or anything, if you like, which will stimulate plant culture and pastures at an even cheaper figure than is shown on the scale—and the scale shows that costs have fallen consistently and continue to fall. That is a situation that did not exist ten or 15 years ago when this matter was being considered by experts so we now have to face the possibility that new or alternative methods may be found and that farmers will be able to get some type of fertiliser which will give the same plant culture at a much cheaper rate per acre and that higher output will give them greater profits.
We in Fine Gael are anxious to see this project become a success. We have already asked many questions on this proposal, all the time trying to secure an assurance that it will be a benefit rather than a burden to the agricultural economy because we know it is the farming economy that will support this industry. The industry will depend on the demand by farmers for the production of extra fertilisers. Certainly if we can become self-sufficient in the production of nitrogenous fertilisers at an economic price, it is something we should strive for and we should spare no effort to find ways and means to ensure the success of the project.
I do not think there is any other matter I want to raise at this stage except to say that I feel that the estimate of 150,000 tons in 1965 will be far surpassed because statistics have shown that the volume of imports each year is rising very rapidly. We can look forward to an output of a quarter of a million tons in a matter of a few years, so that, apart from the very large increased demand we can expect, the main problem at the moment is to ensure that the price of the product of this proposed new factory will be kept within the reach of the farmers so that we can continue our exports. The proportion of our exports from the agricultural field is the major safeguard of our economy. We need to ensure, whatever else we do, that our agricultural products will continue to compete on the export market.
The fact that the Government have seen, on the advice given to them, that there is a good sound proposition in bringing in this Bill is the greatest proof to me, and to many people, of the humbug and nonsense spoken here about the wonderful future facing Ireland if we are allowed in as a full member of EEC. Let me say that, personally, I am in favour of this project, but I cannot for the life of me understand how the present Government, who are wedded to free enterprise, who worship at the shrine of private enterprise and prize free trade, have seen fit, at a time when they are preparing to sell out other successful State companies, to embark on a venture of this size under State auspices. If ever there were a condemnation of the policy pursued by the Government over the past five years, we have it here in this Bill.
The fact is that in spite of all the talk we have had about private enterprise, and the extent to which the nation depends on it to give full employment and raise the standard of living in this country, the Government come in and say: "We want this fertiliser project set up as a State company, to be run on the lines of the successful State companies which have been in operation here for a number of years." The Minister for Finance stated in his last Budget speech that the Government were contemplating the winding-up of the existing State companies, one of the reasons being a gesture towards private enterprise.
In every chamber of commerce in the country and at every meeting of so-called business industrialists, appeals were made to the Government to sell out those State industries in the form of shares, so that these gentlemen could reap the benefit to which the people and the community are entitled. This Government were the first to send in their application for admission to the Common Market; they beat the British Government in the matter of time, so far as application for full membership was concerned. One of the reasons given by the Government was that the countries of the EEC, from which at the moment we get fertilisers, were an outward-looking group, anxious to help other nations and anxious to have trade with those countries less well developed than themselves. It was highly desirable that Ireland should enter this new community of nations. What do we find? In this White Paper produced by the Government, the fear is expressed that, although fertilisers came here over the past four years at what might be described as tempting prices, we may not always have that happy position because of the fact that Nitrex, a group of Europeans engaged in a cartel or in control of the production and distribution of fertilisers, would be in a position to raise prices or lower them and hold the Irish farmer to ransom. Would that be possible if Ireland entered the Common Market? Could this terrible disaster face the Irish farmer—that this European cartel which obtains in the Common Market countries would be in a position, despite the fact that Ireland was not a full member, to exploit the Irish farmer by raising prices to whatever level they thought fit? If that is the position—and that is the fear of the Government as expressed in the White Paper—does it not make nonsense of their application for full membership?
I can only say that the Bill itself is evidence of the confused and erratic behaviour of this Government over the years. They go on from day to day with a new policy as every new day dawns. They cannot hold on to a principle or policy for 24 hours. Let me say straight away that I believe that if the economic experts and scientists are satisfied that this is a sound proposition, then there is every justification for embarking on it and I feel that it was a sound economic proposition for years past. I cannot understand the long delay on the part of this Government in dealing with it. It seems very strange that they deal with a matter of this nature on the eve of their admission to the Common Market. This measure, prepared and drafted, was introduced here some months ago in the light of the fact that we were to be protected and helped in the Common Market and that we would get, as full member, a fair crack of the whip with regard to the industrial set-up.
I think it is no harm to have it on record that as far as the country is concerned we have a group of people at the moment who are perturbed that this huge expenditure is not a wise one. They feel that the Government's order of priority is mixed up. It might even be suggested that far greater and more immediately productive work would be done if the millions involved were spent on drainage. There is an argument which could be put forward on that basis. If what is in paragraph 11 of this White Paper is correct, that the expenditure on imported materials for use in this project will not exceed one-sixth of the amount which would otherwise leave the country to pay for the finished imported products, on that basis alone and on the basis of the costings that have been given, it is a sound proposition. That is if we can be sure of that, or if we can be sure of anything at all that comes from a Government who change their mind from day to day—that is my greatest worry.
Logically, the only group in this House who should bring in a measure of this nature at this stage is the Labour Party. If the Government believe in this policy they should be running 20 miles away from a proposition of this nature, and not try to be all things to all men. I do not deny that in the process they may do some good things, but they do them in spite of themselves. It is a better proposition to suggest that one-sixth of the amount of money which would be spent on the imported materials is going abroad. When we make comparison with the car assembly industry to see which is the sounder proposition, the fact of the matter, so far as that industry is concerned, is that only six per cent. of the entire turnover last year of that big assembly industry went in wages, and it is safe to say that almost 90 per cent. of the materials was imported.
The Government should have used this approach down through the years instead of protecting and helping will-o'-the-wisp industries, which at the first breath of competition fold up, and are found by a Government or CIO report to be incapable of withstanding any competition. When it is found that the majority of these industries, of which reports are being made available, are controlled from outside the State, it is all the more necessary that a primary or a basic industry such as this, when it is in the State, should be owned and controlled by the State for the people. It is a pity that this is coming up so late in the day.
This is very desirable, especially in view of the fact that the Government's application for full admission to the EEC is not likely to be successful. It will make this measure all the more important and beneficial and helpful to the farming community for the future. That is one reason why I am glad to see it here and to support it.
I accept the fact that the explanation given in this White Paper is coming from experts who have advised the Government. On that basis, I feel that some of the fears expressed by people outside the House and by Deputies in the House should be allayed.
The question of the siting of the industry is something that I cannot comment on, because I am not an expert and I have no information on it whatsoever. I do feel, if it were a feasible and economic proposition, that this industry should be placed in an area which badly needs development of some sort. I do not begrudge it to the locality that has been lucky enough under the circumstances, but I do feel that if other areas were found to be as suitable a selection should have been made elsewhere. The reason I say this is that the Government have tried for many years to persuade industrialists and other people to move to locations which are in need of industries. If the Government desire to see big industries or small ones moved to the undeveloped areas and if they try to persuade private enterprise to do so, it behoves the Government to set a good example. I should like the Minister to clarify that point as well as he can.
I have done so already.
I appreciate that the Minister has made a statement on it. However, I should like him to make it quite clear that, so far as he is concerned and on the full information available to him from the experts, there is no other place in Ireland as suitable as the location chosen, taking into consideration population figures and the need for development, as well as the economic factors of transport and suitability. If he confirms that, well and good, and more luck to the locality that has got it.
I am in complete support of the measure and I am glad to see it coming in, especially in view of the situation which in all probability will develop in relation to our application for admission to the Common Market. It is time the Government and the major Opposition Party woke up to the fact that when they go over to Europe with their mouths open and a look of innocence in their eyes hoping for a fair crack of the whip from the cold, keen business men of Europe, what is expressed in the White Paper should send cold shivers up and down their backs. In regard to the fertiliser industry the Government have found that the cartel in Europe, in spite of the Common Market, could harm the Irish farmer by exploiting him so far as the price is concerned.
Like many other Deputies who have spoken on this Bill I have certain reservations. As the Leader of the Opposition said, we have to accept what the Government have said in their White Paper in which they have given a guarantee that they are fully satisfied that the industry can manufacture these fertilisers and make them available without subsidisation or protection. That being the case, this Party feels that it cannot legitimately oppose this Bill although many of us may not be happy in our own minds in relation to it.
The first thing I should like to ask the Minister is this: why is this, of necessity, purely and entirely a State concern? I am personally aware of the fact that a particular firm would be prepared to make a considerable private investment, running, I might say, into hundreds of thousands of pounds, if they were permitted to do so. In fact, I made inquiries a couple of years ago, when this was first mooted, of the Minister's Department to know if they would accept private investment or if it was conceived to be entirely a State concern. I was told that no definite decision had been taken on the matter. Twelve months afterwards, I made the same representations and I did not get a definite or clear answer. I am not a financial expert, but reading the White Paper which states: "The project will not involve any charge on public funds which would have to be met by the taxpayer," the position is that this factory will cost £6 million and this money is to be provided by advances bearing interest at current lending rates and repayable as to principal and interest over an appropriate period. Am I to understand in connection with the £6 million invested in this factory that they will pay interest at the current lending rates? I am not absolutely certain what the current lending rates are but I think they are something in the neighbourhood of six per cent. Will this factory be able to do that and at the same time, pay back the capital that is being lent to them? If that is so, the Minister should give us some costings in this House. I understand he has expressed some reserve in doing so. Deputies would be anxious to know when this capital will be paid, how it will be paid and will this company be able to make such a sizeable profit to repay the amount borrowed to the tune of £6 million and pay current lending rates as well. If that is the case, it would appear that this company is going to make quite a sizeable sum of money.
They would have to pay directors' fees and all outgoing costs as well. If that is the case, surely one can reasonably ask, if this will be such a successful company, if it is to be such a profitable company to all those concerned with it, why did the Government wait such a long time to open a nitrogenous fertiliser factory? Perhaps the answer to that might be that the demand for this type of nitrogenous fertiliser has considerably increased over the past years. From the statistics given to us here and those that have been made available by other organisations concerned in this, that would appear to be the case. At the same time, I wonder if we have any guarantee that there will be this increasing demand for the fertilisers concerned.
I gather the intention behind this Bill is that the factory will manufacture for domestic market entirely, with no particular prospect of selling outside as I gather that nitrogenous fertilisers are in full supply from the already existent factories. A factory such as this, in the final analysis, if it is going completely to fill the demand within the country itself, must of necessity have a certain surplus. If as stated here the likely demand for fertilisers in the next year or so would be 150,000 tons, it is inconceivable that the factory is going just to manufacture 150,000 tons and no more. They will have to have a small surplus so that they may achieve what they have set out to do, that is, to meet the domestic market. Whether that surplus is 20,000 tons, 30,000 tons, or whatever it may be, what does the Minister propose to do with it? Where does he propose to sell that surplus? If he intends to sell it, has he taken into consideration that that surplus will have to be married into the domestic market? Does it mean there will have to be some extra charge on the company to dispose of that surplus? Perhaps, the Minister in his reply can allay some of the doubts that I have on that particular subject.
In many parts of Ireland, particularly in the more fertile parts, we are able to produce—in fact it grows naturally on the land; it grows on my own land which is not very highly fertile—a vast amount of clover which is responsible for producing nitrogen, which is very good for the soil. I may be a bad farmer myself. I have a fair amount of land and I very rarely have to use nitrogen in connection with grass. It is equally used for stimulating purposes on root crops and so on. The type of land that I have in my own district of North Wexford is not by any means superior to or as good as that in the more fertile parts of the country. The Minister and his advisers are concentrating on the fact that many of the Fianna Fáil Deputies have accepted the fact that grass is good; that it is an economic crop which they did not conceive it would be some years back. They conceive that most of the fertilisers will be used on grass. I wonder have they taken into consideration that there are probably wide areas in the country which might not require the quantity which they anticipate.
I trust that the Department of Industry and Commerce, which is concerned with the project, have been in full consultation with the Department of Agriculture, agricultural organisations and societies and their officials who would advise them on this particular project. I am also advised that the question of producing nitrogenous fertilisers economically depends largely on the size of the nitrogen plant. I have been advised from a source which I believe knows a lot about the subject, that, in order economically to produce nitrogenous fertilisers by the cheapest method possible and with your own capital or with capital from outside existing firms, you have to have a sizeable nitrogenous plant.
I am told that we have, or anticipate to have, in this factory when it is set up, two small nitrogenous plants which may not be as economic to run as a big nitrogenous plant. I am further informed that one of the bigger cross-Channel firms not very long ago closed down on the production of nitrogenous fertilisers because their plants were not big enough to make it economical and put them in equal competition with some of the Continental firms. There was a big British firm which closed down because their plant was not big enough.
I understand that one of the reasons we have a small nitrogenous plant is that it has a very much higher labour content. While I would like to see employment given in the area concerned—and I can say that with an open mind here because it is not my own constituency—which I feel has suffered considerably with the closing down of the Avoca Mines, at the same time it seems to me, from the advice that I have had from a source which should know, that it would have been possible to have had a bigger plant and to have produced this nitrogenous fertiliser even cheaper than the figures which the Minister has given in the White Paper, though I admit by so doing there might not be the same high labour content in this factory as is anticipated now.
The siting of the factory is a matter which I personally do not want to criticise. It may not, perhaps, be the most desirable in the country itself. I suppose we must accept that the reason it was originally sited there was that it was proposed to be an ancillary to the Avoca Mines concern and that the raw material of pyrites was available to the Minister.
Debate adjourned.
The Dáil adjourned at 10.30 p.m. until 10.30 a.m. on Thursday, 24th January, 1963.