I move:—
That a supplementary sum not exceeding £4,490,500 be granted to defray the charge which will come in course of payment during the year ending 31st March, 1963, for the Salaries and Expenses of the Office of the Minister for Agriculture, including certain services administered by that Office, and for payments of certain Subsidies and sundry Grants-in-Aid.
Most of the expenditure covered by this Supplementary Estimate relates to price support for pigs, milk and wheat, and to schemes of productive assistance to agriculture. Deputies will recall that we have already had a Supplementary Estimate of £1 million for milk, so that the total provision for support of milk prices in the present financial year now stands at £3,172,000. The total provision to support pig prices is going to be £2,750,000 in this financial year, while the arrangements for wheat are expected to cost about £1,540,000 in the present financial year and a further £500,000 next year, making a gross total of £2,040,000.
I would like to begin by saying something about price support and other forms of assistance to agriculture, in order to put in proper perspective various pronouncements made recently by some people who claim to speak for the farming community; and I shall take first the question of milk. In many of the declarations we hear on this subject from various sources, there is a great deal of propaganda and a very little amount of objective analysis. It is very important, therefore, that the actual facts should be stated clearly and fully understood by all concerned. I have no need to indulge in propaganda or wild statements. I will confine myself strictly to the facts.
In comparing the farmers' position over a period of years, some organisations love to take the year 1953 as the starting-off point. We all know that 1953 was an exceptionally good agricultural year and that if you take 1952, and particularly 1947, comparisons with present-day conditions would show entirely different results. However, I am going to take the year 1953 and meet these people on their own ground.
In 1953—a good year, as I have said—total milk production amounted to 508 million gallons, and the quantity of milk supplied to creameries amounted to 232 million gallons. In 1960, these figures had risen to 570 million gallons and 281 million gallons, respectively; in 1961, to 594 million gallons and 305 million gallons, and, in 1962, to 613 million gallons and 324 million gallons. The total milk cheque of creameries in 1953 was £18.1 million, and in 1962, about £26.2 million. The number of cows on farms supplying milk to creameries rose from approximately 625,000 in 1953 to 695,000 in 1962, and the average quantity of milk supplied to creameries per cow increased from 370.9 gallons in 1953 to 460 gallons in 1962. The average return per cow from milk supplied to creameries, including value of skim content, was £32 in 1953 and £41 in 1962. The average value of the dropped calf was £8.9 in 1953 and £11.9 in 1962. The cost of Exchequer support to the dairy industry was £122,000 in 1953/54, and it will be £3,172,000 in 1962/63.
Obviously, the price of milk went up by a smaller percentage than did the total amount paid to milk suppliers by creameries, but it is, clearly, absurd to try and judge the milk producer's position in 1953 and 1962 by looking only at the price of milk. The fact is that, by their constructive agricultural policy which has brought about a considerable increase in productivity of our dairy industry, the Government have succeeded in increasing the return from milk production by £8.1 million through a combination of price support and production subsidies.
Our production subsidies are conveniently forgotten by those who pretend that Irish agriculture has been neglected by the Government, but it is, obviously, essential to consider not only the large amount which the Government are paying by way of price support, but the large amount they are also providing for aids to increased productivity and lowering of costs. State aid to agriculture otherwise than by way of price support totalled £13 million in 1953-54, and will amount to over £30 million in 1962-63. This State aid includes the following:
Relief of taxes on agricultural land: £4,940,000 in 1953/4 and £8,524,000 in 1962/3; Fertiliser subsidies: nothing in 1953/4 and £3,000,000 in 1962/3; Land Project: £2,244,000 in 1953/4 and £2,208,000 in 1962/3; Farm Buildings and Water Supplies Scheme: £574,000 in 1953/4 and £1,253,000 in 1962/3; Advisory services: £257,000 in 1953/4 and £411,000 in 1962/3; Agricultural research: £50,000 in 1953/4 and £808,000 in 1962/63.
In addition, direct price support to agriculture will cost £7½ million in the present financial year. Now, I am not looking for any thanks for this very large increase in productive State aid to agriculture. All I am asking is that its existence should be recognised. It is, after all, a fact.
When I introduced the fertiliser subsidies a few years ago, I knew that greatly increased fertilisation of our grassland would put a good deal more money into the pockets of our farmers, and especially into the pockets of milk producers. Not only was there a great potential to be developed here if fertilisers could be made sufficiently cheap, but this was only a way of assisting farmers, particularly dairy farmers, which could not give rise to complications with other Governments, as can the price end.
The fertiliser subsidies have been very successful in bringing about a marked increase in production, especially milk production, without a corresponding increase in costs. As a farmer, I certainly would prefer to have subsidised fertilisers than to have their monetary equivalent added to the milk price, and I believe most good farmers would take the same view. The fertilisers and ground limestone subsidies will cost £3.75 million in the present financial year. We expect the use of ground limestone to exceed a million tons in 1962-63. The use of phosphates and potash is now 50 per cent. greater than before the fertiliser subsidies were introduced. It is sometimes alleged by the kind of person who thinks that his function in life is to try to tear to pieces every progressive State measure of agricultural importance that the fertiliser subsidies are benefiting the tillage farmer mainly. This is a false and a futile argument. Grassland has, in fact, benefited greatly from the fertiliser subsidies.
Then, take the question of local rates. We would all like to see agricultural land derated, as in Britain and the Six Counties, but this is a comparatively easy business in Britain where only 5 per cent. of the working population is on the land, as against 35 per cent. in our country. However, the large sum of £8½ million is being made available in the present year in relief of rates on agricultural land, and this is a figure which cannot be shrugged off. These grants represent over 50 per cent. of the total rates payable on agricultural land. A farmer with a valuation of £20, however, would this year be paying only about £13 in rates; his land is derated to the extent of 70 per cent.
Let us have a look, now, at another side of the question—export markets. We have very heavy bills to meet this year for subsidies on pigs and milk, as well as wheat. The average price for our butter on the British market in 1962 was about 298s. a cwt., and, if this was all we got for our butter production, the price of milk would have been only 1/2d. per gallon. The British market became so saturated with butter, including British home produced butter as well as imported butter, that the British Government decided to control import of butter from all sources. This control is being continued in 1963-64. In working out the quotas for individual countries, the British Government took into account what they described as the degree of dumping by each supplying country, that is to say, the difference between the market price in Britain and the price to producers in the supplying country. I am not saying that I agree with this approach, but my disagreement with it does not prevent the British from doing it in this way. Apart altogether form the cost to the taxpayer, how can we start increasing prices here of products which we have to sell in such difficult and controlled markets without thinking of the consequences this might lead to in relation to those outside markets? Again, how could we take the risk of increasing the price of butter to our own consumers, when we know very well that this will only reduce consumption, increase the quantity for export and add to the difficulties of producers and Government alike?
Pigmeat, also, has been a very weak market in Britain during the last year, and that is the main reason why I have had to ask the Dáil for so much money to support this industry. The British market has been over-supplied, mainly because of imports from Denmark and increased British production, and very difficult marketing conditions existed throughout the period. In order to ensure that the quality of produce we send to Britain would measure up sufficiently to that of bacon from other sources, and, in order to retain our position on that market, we found it essential to bring in stricter grading arrangements. This was done following lengthy conversations with farm organisations, and it was carefully phased so as to cause the minimum upset to our own producers. I believe that these measures are bound to bring in good results in time and will give the efficient pig producer a better return for his money.
Let me say, finally, on the subject of pigs that we calculate that, if there had been no State support, the price paid to farmers for Grade A pigs during the past year would have been no more than 155s. per cwt., dead weight, as against a guaranteed price of 230s.
To return, for a moment, to my 1953 comparisons, it is provisionally estimated that income per farm family member increased by approximately 30 per cent from 1953 to 1962. During the same period, income per head in all other sectors increased by about 60 per cent. If, however, one takes 1947 as the base year, a very different result is obtained—agricultural incomes have since then increased by some 152 per cent and non-agricultural incomes by about 130 per cent. However, I am not going to quibble. I realise that 1947 was a poor year agriculturally and I only wish that those who pick a particular year because it may seem to suit their argument, would try to be a little more objective and fair minded.
The fact is that in Europe and throughout the world non-agricultural incomes have been increasing faster than agricultural incomes. This is a matter which gives no satisfaction to Governments, but is mainly due to hard economic facts—above all, to world production of food outrunning commercial demand, and I regret to say that expert opinion believes that this position may persist for years, especially for dairy products, wheat and pigmeat. At the same time, there has been a good world demand for industrial products, and the result has been to widen the income gap between farmers and other sections of the population. We have experienced this in common with other countries, but the disparity is not as great in this country as in, for example, France, Germany, or the United States. It is true that some well organised groups in the non-agricultural sector have occasionally been able to exert considerable pressure in order to get increases of income which would not be justified by the economic situation generally, and I deprecate such tactics, but, when all is said and done, the basic reason for the disparity between agricultural and other incomes is the weakness of agricultural export markets.
The best any Government can do in such circumstances is to try and maintain some reasonable relationship between agricultural and non-agricultural incomes. That is, precisely, what the present Government have been doing since they came into office, and the increase in total State aid to agriculture from £12,979,000 in 1953/54 to £19,342,000, in 1957/58 and £37,894,000 in 1962/63 is a sufficient measure of the Government's regard and sympathy for the agricultural community.
Turning, now, to specific items in the Supplementary Estimate, we require a sum of £520,000 net for the purposes of the BTE Scheme. The original Estimate was based on the direct purchase of reactor cows in the South commencing early in 1962-63. In fact, the headage grant payments continued until 1st October, and this has meant that gross expenditure and receipts figures are less than they would have been. The increase in net expenditure is, however, mainly due to the fact that the number of reactor cows disposed of in the year, taking the headage grant and direct purchase procedures together, was considerably in excess of the number originally anticipated.
Under the modified clearance area programme which was put into operation in the South last year, compulsory testing of all herds commenced on 15th June. The results achieved under this programme to date are, I am glad to say, most encouraging. It is estimated that between 1st October and the end of the financial year some 70,000 reactors, including 52,000 cows, will have been taken up by my Department on direct purchase, while the returns from the round of herd testing which is now nearing completion show, in respect of close on 1½ million animals tested, that the overall incidence of infection in cows in the area has fallen from the original figure of 35 per cent to about 10 per cent and in other cattle from about 10 per cent to less than 3 per cent. This is a satisfactory picture and one which augurs well for the success of the final stages of eradication in the Southern area.
From the commencement of the next round of testing in the South, about April, stricter controls on the movement and sale of cattle in the area will have to be applied, and it is essential that these controls should be observed by all herd-owners if the job of eradication is to be completed in the minimum time. There are still some farmers in the South who have not arranged for the testing of their herds. These herd-owners, whether or not they realise it, are breaking the law and running the risk not only of prosecution but of having their herds placed under restrictions so as not to constitute a danger to other herds in the neighbourhood.
The fact that since the beginning of 1963, only attested store cattle can be sent to Great Britain will have brought home to many herd-owners in the South the importance for them of early attestation. From now on, farmers must be prepared for lower prices for their store cattle if they are not of attested status. I must strike a note of caution, too, as regards the export of uncertificated fat cattle. At present, such cattle may be exported to Britain, provided they are going to designated slaughterhouses. There can be no guarantee, however, that this can go on indefinitely. In these circumstances, I would urge farmers in the South to consider seriously having their herds individually attested in advance of area attestation. There are at the moment over 1,100 individually attested herds in the South, but very many more herds would become attested without undue difficulty, especially amongst the 32,000 which have earned the herd bonus.
