I move that the Bill be now read a Second Time.
This Bill gives effect to the recommendations of the Committee on Wool Improvements, whose Report was presented to this House in July, 1966. The Terms of Reference of the Committee were:
To consider and recommend desirable improvements in the quality, handling and marketing of Irish wool, including the question of grading.
The Committee consisted of twelve members representing producers, traders, manufacturers, the Agricultural Institute and my Department. It was, therefore, fully representative of the interests concerned. I would like to take this opportunity of expressing my appreciation of the very thorough job which the Committee performed in examining all aspects of this complicated subject and in making recommendations of a very practical kind.
While our sheep industry is geared basically to the production of high-quality meat, for which we have an assured export market at good prices, the production of wool is also of considerable importance. About 16½ million lb. of shorn wool is produced here annually, of which 80 per cent is exported, and the value of exports of wool in 1967 was almost £3½ million. In recent years, the world market for wool has been affected by competition from man-made fibres, the variety and quality of which have improved as a result of technical progress in this field. Wool prices, therefore, declined. Nevertheless, there is a future for our wool, but only provided it is of good quality and is graded, presented and marketed efficiently. There is no doubt that, in the past, the manner in which our wool was presented and marketed left much to be desired and that this was reflected in the prices obtained for it. The purpose of the Bill is to remedy these defects.
The main recommendations of the Committee, as incorporated in the Bill, fall broadly under four main headings:
(1) wool to be bought from producers on a graded basis;
(2) buyers of wool to be registered with my Department;
(3) exporters of wool to be licensed by my Department;
(4) a council—called An Chomhairle Olla in the Bill—to be established, on which producers and traders will be represented and which will have functions relating to the grading of wool, the standards for registration, the standards to be observed by wool exporters, as well as the promotion of wool exports and the securing of the maximum use of home-produced wool by Irish manufacturers.
To bring about an improvement in the presentation of Irish wool on both the home and export markets, the grading of wool is clearly vital. As the Committee on Wool Improvements say:
There is no escape from the conclusion that the proper method of purchasing wool right back to the producer is on a graded basis. The Committee accepts this as a prerequisite for a rational system of wool marketing. It is of course equally essential that pricing arrangements should be appropriately and effectively related to the grading system. The grading system for purchases from producers should be as simple as possible so as to be understood without too much difficulty and to command producers' confidence.
The Bill, therefore, provides in section 11 for the making of regulations for the purchase of wool on a graded basis, and, where such regulations apply, purchases in contravention of them will be an offence. I endorse the Committee's view that the grading system should be simple and easily understood. It is intended that the regulations will provide for price premiums where wool is of good quality, and for deductions where it has defects, but the basic price of wool will not be fixed. It will also be obligatory for buyers to give producers statements giving prescribed details of purchases.
I come now to the question of the registration of wool buyers, which is dealt with in sections 5, 6, 8, 9, 10 and 11. These provisions are very important because, unless buyers have got suitable premises and competent staff (and these are the broad requirements for registration), any regulations that might be made for the purchase of wool on a graded basis could be stultified. The advice of An Chomhairle Olla will be obtained on the standards for registration, and, in the light of this advice, regulations will be made dealing with premises and the associated plant and machinery. Existing buyers of wool will be entitled to registration if their premises and associated plant and machinery comply with the provisions of the relevant regulations. Their continued registration will be subject to their compliance with the Act and any Regulations made there-under.
The licensing of wool exporters under section 7 will not involve any detailed control on wool exports. Existing exporters will be entitled to receive licences initially, but the continuance of their licences and the issue of new licences will depend on the suitability of the licensee as an exporter.
Section 9 of the Bill sets out what is to be done if it is proposed to cancel registration or revoke a licence. Briefly, a month's notice of intention must be given to the person concerned, who has the right to request an inquiry into the matter. Where that happens, a practising barrister of at least ten years' standing will be appointed to carry out the inquiry. Wherever the final decision is to cancel or revoke, as the case may be, a statement of the reasons involved will be laid before each House of the Oireachtas.
I should like to turn, now, to the provisions dealing with An Chomhairle Olla, which are contained in sections 12 to 18 and in the Schedule. This body will play a vital role in the successful implementation of a rational system of wool marketing. An Chomhairle Olla will include representatives of producers and of the trade, and it will be relied on for advice about grading and standards of registration. It will also fix a code of practice to be observed by exporters. Furthermore, it will be empowered to undertake promotion measures, such as mounting publicity campaigns abroad to stimulate exports, and will consider ways of increasing the use of home-produced wool by Irish manufacturers. It will, therefore, become the focal point of all wool improvement efforts. In the course of time, it may become clear that other functions should appropriately be assigned to it. For that reason, provision is made in section 14 of the Bill for the making of orders, with the consent of the Minister for Finance, assigning further functions to An Chomhairle.
In accordance with the recommendations of the Committee on Wool Improvements, An Chomhairle Olla will not, itself, engage in the purchase and sale of wool. The reasons for this are set out in paragraphs 128 to 134 of the Committee's Report, which points out that, in our circumstances, a marketing board
Would have to relate its purchase prices for wool to the realised price on world markets. The only solution to this problem appeared to the Committee to be a two-part price system comprising a basic payment to producers at the time of purchase of their wool and an appropriate extra payment later related to the board's resale receipts.
The financing of a wool marketing board would involve heavy capital to meet wool purchase and operational costs. Also it has been represented that the operational costs of a board could be expected to be high especially in view of the relatively small size of individual producers' clips in this country and the necessity to operate a two-part price system.
The Committee while believing that ultimately the establishment of a wool board might become feasible and generally accepted, considers that at this stage it would be preferable to introduce such control measures as are necessary in the short term within the framework of the existing trade.
The Committee also states that "should the measures it has recommended prove inadequate in the course of time and experience, a more thorough organisation of marketing under a wool board should be adopted". Two members of the Committee, however, signed the Report with the reservation that they would not favour the organisation of marketing under a wool board, while, on the other hand, one member thought that "the only ultimate solution is a complete marketing board", and signed the Report "as a stepping stone to such a board".
I accept the general consensus of views expressed by the Committee. I believe that the first essentials are grading, registration and export promotion under central authority, and that these objectives can be fully realised without the major, and possibly hazardous, step of taking over the job of buying and selling. In other words, I believe in a combination of private and public enterprise in this particular sector of our agriculture, but my views are not fixed and rigid, and I am prepared to re-examine the position, if necessary, in the light of a few years' experience of the functioning of this Bill. My expectation, however, is that the fundamental objective of securing the best possible return for our wool by raising the standard of presentation and marketing can be secured under this Bill which, as I have said, gives effect to the recommendations of persons who have a detailed knowledge and long experience of all aspects of the trade.