Vol. 234 No. 5
asked the Minister for Agriculture and Fisheries if in view of the serious drop in world market prices for skim milk powder he now considers it desirable to subsidise the exports of skim milk powder so as to enable the creameries to pay an economic price to the farmer for skim milk left at the creameries.
12.
asked the Minister for Agriculture and Fisheries if he is aware that two companies (names supplied) have informed their supplying creameries that they will receive only 1½d per gallon for skim milk this season; and, if so, whether he proposes to take any steps to enable these processing companies to pay an economic basic price for skim milk.
I propose, with your permission, a Cheann Comhairle, to take Questions Nos. 11 and 12 together.
The payment of a subsidy on exports of skim milk powder would in effect involve a double subsidy on about one-fifth of the national output of milk. It would benefit only the skim milk which is used for the manufacture of powder and would confer a special advantage on the sellers of this skim compared with sellers of skim for other purposes and the many farmers who use skim for livestock feeding.
The Exchequer is, of course, already contributing heavily to the support of creamery milk. The total Exchequer support in the current year will be £21 million as compared with £19.3 million last year and £3.2 million in 1962-63. Indeed, the Exchequer support now amounts to about 10d per gallon of creamery milk, or approximately one-third of the price to the producer.
I am not aware that the two manufacturers referred to by the Deputy have informed their suppliers as stated. The recent decline in export market prices for skim milk powder may, however, make it difficult for some manufacturers to maintain the higher prices they paid for skim milk in recent years. It is, of course, well known that export prices for skim milk powder fluctuate considerably over the years and it would be prudent for manufacturers to average returns to producers from year to year so as to mitigate the effects of these export market price fluctuations. I am, however, having a detailed examination of the whole position carried out at present.
I would remind milk suppliers that the value of skim milk for livestock feeding is considerably greater than its current value for the manufacture of powder and I would urge farmers generally to utilise as much as possible of the available supply of skim for such feeding.
Will the Minister not agree that if the price falls, as it has already fallen, for skim milk, it will take the whole bottom out of the dairying industry and create a serious situation?
I do not quite agree that that would be so, while at the same time admitting that the decline in price in recent months is quite a serious matter for some of our milk suppliers.
Will the Minister agree that the situation at present obtaining in regard to the price for dried skim milk is due to heavy subsidisation by countries such as France, Germany and others, and will he not agree that a small subsidy guaranteed to Irish dried milk producers and manufacturers would stabilise the price and get the country through a very difficult situation which is not likely to be permanent?
That is the question I actually answered first.
Is it not a fact that only about 25 per cent of skimmed milk is affected by the low prices prevailing for powdered skim milk——
About 20 per cent.
——and would it be possible to isolate that 20 per cent and subsidise it so as not to have farmers in certain areas at a distinct disadvantage?
It is not quite as simple as that. The fact is that some of this 20 per cent of our milk suppliers have, by virtue of the good trading position in milk powder over recent years, been in a specially favourable position. This has been the case, so that it is not just a question of their being on a level position with other suppliers. They were in a better position and if their present position has come back from that rather favourable level, it does not necessarily mean that they are less favourably placed today than some of the other milk suppliers who never had this advantage at any time.
Would the Minister agree that for some years past we have been encouraging dairy farmers to produce more and that we have now come to the stage where we are telling them not to produce any more, that they have produced enough?
What I am being asked is to pay more money for what is being produced.
To maintain production.
