I move:
That a supplementary sum not exceeding £9,646,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1968, for the Salaries and Expenses of the Office of the Minister for Agriculture and Fisheries, including certain Services administered by that Office, and for payment of certain Subsidies and sundry Grants-in-Aid.
The net amount of this Supplementary Estimate, added to the original Estimate for 1967-68, will bring the total net expenditure from the Vote for Agriculture to £49,683,000.
Two items—Milk (Subhead N.1) and Meat (Subhead K.21)—account for the greater part of the additional sum now required, but substantial amounts are also needed for Lime and Fertilisers Subsidies (Subhead K.9); Bovine Tuberculosis Eradication Scheme (Subhead (K.12); Losses on Disposal of Wheat (Subhead K.20); Land Project (Subhead K.8) and in connection with the Diseases of Animals Act, 1966 (Subhead L.1) which provides largely for expenditure on the special precautions necessitated by the outbreak of foot and mouth disease in Britain. The gross total of the additional sums required under the various subheads amounts to over £11 million but against this it is now estimated that Appropriations-in-Aid will be £472,000 greater than the original provision and also that there will be savings on other subheads of the Vote amounting to over £990,000.
As Deputies are aware, my Department has, ever since the very serious foot and mouth disease epidemic started in Britain last October, been engaged in a massive and unremitting effort to keep the disease out of this country. This was perhaps the gravest crisis which has confronted us in agriculture for many a long year. There is, I am sure, no need for me at this stage to give details of all the various restrictions and controls that we have been operating. The number of Statutory Orders made since last October is no less than 24. They have affected every aspect of our economic life and have borne heavily on many people. The effort and the sacrifices have happily proved worthwhile, and here I feel I should publicly acknowledge, once again, the co-operation of all our people, including our people in Britain, and their truly remarkable understanding of the seriousness and needs of the situation with which the country has been faced.
The veterinary staff resources of the British Ministry were very heavily taxed during the outbreaks and I arranged to send to Britain at various times a total of 27 officers from the veterinary staff of my Department to work with the Ministry's staff in combating the disease. The British Minister, Mr. Peart, has sent me a personal letter of appreciation of this arrangement and of the good work done by our staff in Britain.
I have gradually cased the restrictions according as this was justified by developments in the disease situation in Britain. I was recently able to announce further relaxations as a result of which trading generally may be resumed at marts and fairs on and from 29th February and the various sports which have been under restriction may be resumed as from 22nd February.
As to the source of the outbreaks, the view is commonly taken that imported meat is probably responsible. The British Government have temporarily suspended imports from certain countries where the disease is endemic. The British Government have also decided to establish a committee to examine all aspects of the epidemic and the findings of this committee will be of great interest and importance to us. We have thought well to bring to the notice of the British Government our concern lest a resumption of meat imports from certain countries might lead to further infection.
The additional expense incurred by my Department up to 31st March in connection with the operation of our various restrictions and controls is estimated at £147,000. This is, however, only a very small amount to pay to avert the economic disaster that an outbreak of foot and mouth disease in this country would represent and I am sure that Deputies will agree that it is money well spent.
Total Exchequer payments in support of creamery milk prices in 1967-68 are now estimated at £19.2 million, the highest figure ever recorded. Five years ago the figure was only £3.2 million. Of the total requirement of £19.2 million this year, £15,875,000 is in respect of milk production allowances including the special allowance for quality milk, and £3,300,000 is for payments to Bord Bainne. The current rate of Exchequer support works out at an average of about 10d per gallon as compared with 8d in 1966 and 2.3d five years ago. The total creamery milk cheque in 1967 is estimated at £51 million compared with £27 million five years previously. The average supplier of quality milk to a creamery is now receiving about £175 of his annual milk cheque from the Exchequer.
The sharp increase over the years in the support for milk is a clear indication of the importance the Government attach to the dairying industry. However, it is necessary for me to say that the rate at which the total bill is mounting, as a result of the growth in production and the various increases in the allowances must cause some concern in relation to the fact that so high a proportion of the resources which can be made available for agriculture is now spent on one sector. Another problem is that milk production has been growing in other countries as well as here. Milk support is now costing the EEC some $800 million per annum and possibly more and the Community has a very large surplus of butter, some of which is being offered in world markets at very low prices.
The additional sum of £3,805,000 provided under Subhead N.1 to make up the total figure of £19.2 million required for 1967-68 consists of £3,573,000 for the milk production allowances, including the special allowance for quality milk, and £232,000 for payments to Bord Bainne in respect of export losses. Three principal factors are responsible for this increase —the sharp rise in milk production in 1967; the decision announced in the 1967 Budget to raise the milk price allowance from 6d to 7d per gallon from 1st May, 1967; and an improvement in performance under the creamery milk quality grading scheme. The bonus for quality milk was, of course, increased from 1d to 2d a gallon on 1st April, 1967.
Preliminary figures show that deliveries of milk to creameries in 1967 were 473 million gallons, an increase of some 60 million gallons, or 14 per cent on the previous year. Both in total and in the amount of the increase the 1967 deliveries represent an all-time record.
Performance under the creamery milk quality grading scheme has shown a remarkable improvement. When the original Estimate was framed it was thought that the proportion of milk which would qualify for the special allowance in the 1967 season would be about 55 per cent as compared with 48 per cent in 1966. The returns for 1967 now show that the proportion qualifying for the quality allowance was as much as 66 per cent. The total cost of this special allowance is now put at £2.54 million, or £652,000 more than the original Estimate. Some of this increase is, of course, due to the rise in milk production but the major part is the result of the greater care which suppliers are taking with their production methods. The doubling of the incentive by raising the rate of the special quality allowance from 1d to 2d per gallon last April was, I am sure, an important factor in producing the greatly improved results in 1967. I feel confident that with the very worthwhile bonus now obtainable for quality milk, the proportion qualifying for the bonus will continue to increase until the vast bulk of the creamery milk supply qualifies.
The grants which I introduced last year to help milk producers to instal milk coolers are a further help in this direction. While farmers have not so far availed themselves of these grants to the extent envisaged, experience up to the end of 1967 has been reasonably satisfactory. Nearly 1,500 grants amounting to over £9,000 had been paid by 31st December and a sum of £20,000 is being provided in the Supplementary Estimate for the scheme.
The increased exports of butter, cheese and other dairy products which have resulted from the rise in milk production involve an increase in the grant to An Bord Bainne in respect of the Exchequer's contribution towards export losses and subsidies. The requirement under this head is now £3.3 million or £232,000 more than the original provision. The grant is calculated at two-thirds of the Board's export losses and subsidies.
As Deputies know, the question of the reorganisation of the creamery industry has been on the mat for a long time. Various ideas were ventilated but nothing final or definite seemed to emerge. On the recommendation of the National Agricultural Council, I made arrangements for a thorough objective examination of the question by two eminent US consultants. Their report will be available in a few months and will, I am sure, be of considerable help when final decisions are being taken on this matter which is so vital to the long-term interests of the industry.
An additional sum of £4,900,000 is needed to meet the cost of the support payments on the record exports of carcase meat to Britain during the past year. Exports of carcase beef eligible for support payments rose to an unprecedented level during the year and it is estimated that by the end of March support payments will have been made on 105,000 tons—representing over 400,000 cattle—at a cost of about £5,900,000. Exports of eligible mutton and lamb during the year are estimated at 9,000 tons on which support payments of about £500,000 will be made, making a gross total of £6,400,000 in all on beef, mutton and lamb. As against those payments, we will receive from the British Government, under the terms of the Free Trade Area Agreement, the average UK fatstock guarantee on 25,000 tons of carcase beef and 5,500 tons of carcase mutton and lamb. The precise amount cannot be calculated until after the end of the British fatstock year on 31st March next; it will probably be something over £1½ million of which roughly one-half would be received before then and the balance early in the coming financial year. The net cost of supporting the exports in question will therefore be nearly £5 million.
I might add that there was also a very satisfactory increase in exports of boneless manufacturing beef to the United States, the quantity shipped in 1967 being 36,000 tons valued at over £12 million compared with 18,700 tons, valued at £6 million in 1966.
The past year was, on the whole, a good one for the cattle trade. Despite the gloomy prognostications emanating from various sources, the very considerable number of extra cattle carried over from 1966 were marketed throughout the year at reasonable prices and in an orderly manner as exported stores or as carcase beef through the meat factories. I have already referred to the record exports of beef. Our exports of store cattle to Britain during 1967 exceeded 600,000 head as compared with 391,000 head in 1966 and were it not for the disruption caused by the unfortunate outbreaks of foot and mouth disease in Britain, the total for the year would have been very close to, and might well have exceeded, the level of 638,000 head envisaged in the Free Trade Area Agreement.
There can be no doubt that the support of beef, mutton and lamb exports, which is partly financed by payments from the British Government in accordance with arrangements made under the Free Trade Area Agreement, together with the guaranteed prices paid under that Agreement for our stores fattened in Britain have been powerful factors in maintaining the cattle and sheep industry in good shape during the past year, despite the big carryover of stock from 1966. As Deputies are aware, I have also made arrangements under which any producer can have the beef export subsidy paid to him direct by my Department.
So far as can be judged, the prospects for 1968 seem good. There should be a good demand for our store cattle from British feeders and our exports of beef, both to Britain and the US, should be at a satisfactory level. It is not possible, however, to be very optimistic about exports of cattle and beef to the EEC, so long as we are not members of the Community. The high level of protection maintained by the EEC makes exports to the Community area completely unprofitable. For example, at the moment a levy of about £40 per head plus a duty of 16 per cent is payable on imports of cattle into Germany and Italy. It is clearly impossible for us to surmount barriers of this order.
As I have already announced, I propose to set up a board with promotional and development functions in relation to export marketings of livestock (cattle and sheep) and meat. The arrangements for the establishment of this body are well-advanced and I hope to make a more detailed announcement before very long.
There is a small provision in the Estimate in respect of headage payments on fat cattle exported to Britain. This is intended to cover a small number of payments in respect of exports under the scheme in operation in the autumn of 1966, which were not finally cleared until after the end of the 1966-67 financial year.
In order to help to provide an alternative outlet for pigs during the strike at bacon factories, which began on 20th October last, I arranged that an appropriate subsidy would be paid on exports of live pigs. The subsidy was initially fixed at 80/- per pig but this was later increased to a total of 100/- in order to cover the extra transport and other costs arising. When work resumed at the bacon factories on 8th November, I considered it desirable to keep this export subsidy in operation for a further couple of weeks so as to assist the disposal of the backlog of pigs with producers. In all about 3,600 live pigs qualified for the subsidy at a total cost of approximately £18,000. The subsidy was paid through the Pigs and Bacon Commission and the amount involved will have to be repaid to the Commission from Subhead K.19. I might add that in addition to subsidising the export of live pigs at that time I arranged that minimum guaranteed prices would be paid for a period after the strike, for pigs which exceeded the normal weight ranges for the top grades. These two measures contributed greatly towards offsetting any hardship occasioned to producers by the strike.
While, apparently due largely to the operation of the famous and mysterious "pig cycle", the level of pig production in 1967 was lower than it was in 1965 or 1966, these two years were in fact record years and by comparison with other years the 1967 level was reasonably good. It was not very much below the levels of the years 1961 to 1964 and it was higher than in any of the 20 years back from 1960. There is, however, considerable scope for increased pig production. We have assured market outlets for all the pigmeat we can produce and there are guaranteed minimum prices for all the top grades. At the moment I am having a special look at the position in regard to pig and feed prices and I am hopeful that it will be possible to make some adjustments which will give greater encouragement to pig production, especially in the West where increased pig production could do much to add to the income of small farmers.
An additional sum of £76,500 is required to meet the expenditure incurred this year under the Mountain Lamb Subsidy Scheme. This scheme replaced the Wether Lamb and Hogget Ewe Subsidy Schemes which were introduced in the previous year. The present scheme is in fact an extension of the Wether Lamb Subsidy Scheme and provides for payment to mountain farmers of a subsidy at the rate of 10/-per head on all good quality lambs of the Blackface and Cheviot breeds produced in mountain flocks. The sale clause in the previous scheme for wether lambs was dropped in the new scheme and this made it possible to hold inspections in the mountain areas, mainly at dipping centres, thus facilitating the mountain flockowners. There were in all 550 inspection centres this year compared with 67 centres—all at sales and fairs—in the previous year, and some 350,000 lambs were earmarked for subsidy. Another feature of the new scheme was the inclusion of a condition that all lambs presented for subsidy must be dipped. The insertion of this clause gave an impetus to the campaign for the elimination of sheep scab. The cost of the scheme in the current year is expected to come to £176,500 of which all but £1,000—for penning and ear-marking equipment and other miscellaneous expenses—went to the mountain sheep farmers.
The success of the scheme this year can be judged by the response of the mountain sheep farmers in presenting so many lambs for inspection and by the increase of about £130,000 in the amount of direct financial assistance which they received as compared with last year. The scheme is providing a worthwhile stimulus to increased productivity in mountain flocks and by helping in the elimination of sheep scab, it plays an important part in improving health standards amongst mountain sheep. I am having the results obtained this year examined to see if there are any changes which experience may show to be desirable in the future operation of the scheme.
The gross expenditure on the Bovine Tuberculosis Eradication Scheme is up by £587,000 on the amount already voted, the main reason being that the Department has taken up more reacting animals this year than had originally been anticipated. However, this excess is very largely counterbalanced by increased salvage receipts, which bring the net excess expenditure down to £100,000.
The extremely low level of warble infestation in the national cattle herd brought about by the success of the Warble Fly Eradication Scheme over the past few years has enabled us to discontinue the compulsory dressing of all cattle in the autumn. It is necessary, however, to ensure that any cattle which show evidence of warble infestation in the spring are dressed so as to eliminate sources of reinfestation and complete the eradication campaign. With this end in view I have made the Warble Fly (Notification and Treatment) Order, 1967, which obliges herd owners who have cattle showing warbles in the period from the 1st February to the 31st August to notify my Department. Such cattle will be treated free but a charge of 5/- will be made for the treatment of each warbled animal in cases where my Department is not notified. The Order also prohibits the movement of cattle showing warbles unless they have been treated and certified by my Department.
I regard the present stage in the campaign for the eradication of the warble fly as a very critical one. If all farmers co-operate by keeping a close eye on their cattle during the specified period and by giving notice where warbles are observed, we can speedily bring about the final eradication of this pest. On the other hand, indifference by farmers at this stage can only result in the re-infestation of their own and neighbouring herds and jeopardise the success of the programme. I would, therefore, earnestly appeal to all herdowners to be meticulous in examining their stock frequently between now and next August and in immediately notifying the Department's district veterinary office if any evidence of warble infestation is observed.
The provision of £18,000 in Subhead K.10 in respect of the Warble Fly Eradication Campaign is offset by a corresponding appropriation-in-aid in Subhead P (32) and (33). Of this provision, £6,000 represents the cost of dressing animals for warble during the year. The balance of £12,000 will be paid into the Warble Fly Eradication Account from which compensation is paid to farmers for any losses attributable to the treatment.
The provision of £440,000 in Subhead K.20 relates to a payment to An Bord Gráin to meet the Board's losses on the sale of about 27,000 tons of potentially millable wheat of the 1967 crop as animal food. Farmers were, of course, paid the millable wheat price for this wheat. The amount will be recouped to the Exchequer by means of a customs duty on imported milling wheat.
Flour millers purchased 203,000 tons of wheat from the 1967 wheat harvest at the full millable price. This represented 90 per cent of the crop. Of this quantity 168,000 tons was fully millable, and 35,000 tons was purchased as potentially millable. Flour millers could not, however, use for flour milling all the potentially millable wheat bought at the full millable price: 27,000 tons had to be diverted for sale by An Bord Gráin as animal feed at a price in line with current feed grain prices. These are about £17 per ton below the price paid to the growers for the potentially millable wheat. This year the flour millers increased their use of native wheat in the grist from 37½ per cent to 55 per cent in order to absorb all the millable wheat produced. If the 27,000 tons could have been used for flour milling, its cost would have had to be borne in the cost of flour. It is logical that its cost should still be so borne and the import duty is being imposed on imported wheat to meet it.
A sum of £400,000 is required under Subhead K.8 to meet additional expenditure on grants to farmers under the Land Project. I am pleased to be able to tell the House that there has been a considerable reduction in the time taken to deal with applications, with the result that the number of grants falling due for payment has increased substantially.
Under Subhead K.9. I am seeking an extra £610,000, made up of £150,000 for ground limestone, £430,000 for phosphates and £30,000 for potash.
In the year to March, 1967, deliveries of ground limestone reached the record level of 1,565,000 tons. There were exceptionally high deliveries in the months of January-March, 1967, accounts for which were not received in time for payment in 1966-67 and had to be met from this year's provision. Furthermore, in the present year consumption has proved higher than originally expected. Increased usage of ground limestone is of course greatly to be welcomed.
The year to June 1967 was one of record application of all the major fertilisers—nitrogen, phosphate and potash. This increased rate of consumption is being maintained in the present year. It is very encouraging to see that the intensive publicity campaign we launched last year in association with other interests, including county committees of agriculture and manufacturers, has proved such a success. I am sure that nobody will object to the provision now being sought which brings the total of lime and fertilisers subsidies to almost £6 million. Greater usage of lime fertilisers is an absolute essential for any worthwhile increase in agricultural production and I would urge farmers to expand still further their usage.
The scheme of grants for glasshouse nurseries was brought into operation in March, 1967. As the scheme was a new one, our original estimate of its cost was necessarily a tentative one. In the event, some 200 applications for grants were received and approval entailing grant expenditure in the region of £300,000 has issued for the construction of over 40 acres of new glasshouses and for the modernisation of existing units. Not all this expenditure will mature for payment before 31st March, but to date claims for grants amounting to £80,000 have been paid, further claims to the amount of £20,000 have been received, and it is reckoned that an additional £50,000 will be required to meet grants falling due for payment within the present financial year.
The purpose of this scheme is to provide the most modern type of houses and ancillary systems of heating, ventilation, irrigation, etc. in order to equip our glasshouse industry not only to serve the needs of the home market but within a short space to face up to competition in export markets. I consider it a good sign that growers are prepared to accept this challenge and to contribute their own money in the ratio of two to one of that provided by the State towards the modernisation of their industry.
Under Subhead D.10, I am seeking an additional £5,000 for the Farm Apprenticeship Scheme. This arises because we are increasing the grant towards the administrative expenses of the Farm Apprenticeship Board and also increasing the provision for awards to apprentices. These awards are £500 each and are paid to apprentices who complete their apprenticeship and pass the prescribed tests with special merit. More young men than anticipated originally are eligible to sit for the final examination and so complete for the £500 awards this year.
Under the Scheme of Instalment Credit Facilities for the Purchase of Dairy Livestock introduced in 1966, a special arrangement was made with the Agricultural Credit Corporation that loans issued up to 31st December, 1966, would be at a substantially reduced rate of interest, 2½ per cent per annum, the resulting loss of interest to be recouped by my Department. Extra expenditure of £4,000 was incurred in 1967-68 under that heading. A further £1,000 over the amount estimated was necessary to recoup the Corporation in respect of three cases of irrecoverable losses under sundry guaranteed loan schemes. Accordingly, a further sum of £5,000 is provided under Subhead K.3.
The provision of £2,600 in Subhead K.K.6 is to cover the travelling and subsistence expenses of the National Agricultural Council in the first year of its existence.
It is now about a year since the Council was established and I should like to place on record my conviction that it has in that period fulfilled very effectively the purpose for which it was brought into existence, which was to provide a means by which the Minister for Agriculture and Fisheries could discuss with representative members of the farming community the problems confronting the agricultural industry. That this can be done in an unemotional and constructive atmosphere has been proved at every meeting of the Council held since its inception.
Of course, as well all know, the Council has, from the beginning, been the subject of criticism by certain hostile interests in this country who have tried to undermine the confidence of the farming community in the Council. These efforts have not succeeded and there is now a growing realisation among farmers and the general public that the Council has in fact shown itself to be a very useful forum which enables the farmers to bring their views to bear on the Government's agricultural policy and to influence it in a very direct way. While on the subject of the Council, I would add that I have made it clear on more than one occasion that both the Government and I stand ready to work in close and constructive collaboration with all farming organisations for the benefit of Irish agriculture. That is still the position.
With the inclusion of the additional sums I am now seeking in respect of such items as beef and dairy produce subsidies, the total of State expenditure in relation to agriculture in 1967-68 is now estimated to be in the region of £69 million, of which about 38 per cent is for price support and the balance represents aids to increased productivity and reduction of costs. This record sum is much in excess of the amount estimated at the beginning of the year.
In conclusion, I should like to say something briefly about the general outturn for agriculture in 1967. It was a good year. A number of factors— principally the strong demand for cattle and beef in Britain and the United States, a record level of milk production and an increase in the tillage acreage—suggest that there was a substantial increase in the value of agricultural output and in income. The weather was generally favourable, crop yields were good and increased prices operated for a number of products. It was a record year for agricultural exports.
