This project of producing grass meal in Mayo has had a very chequered past, a past which was coloured by some quite vicious political battles in this House, a past which, perhaps, it would be better to forget. At the moment there are certain things which are not in the Minister's extremely short speech, which must be examined. The first is that the direct staff employment is 26 people. I observe from a study of the reports that lie in the Library of the House that the number of 26 has been a constant figure with no variation for years. Therefore, I take it that there was a direction that the number employed should remain the same.
The fact that the local smallholders carry grass to the drying plant is certainly a help but the number employed is 26. Of course, such work as we talk about would be extremely seasonal and quite small. The importance of the project may have been to some extent exaggerated by the Minister, but I want to say from this side of the House, and according to anyone I have spoken to, that there is no desire to harm this company in any way because as the Minister pointed out, it is extremely difficult to attract industry to this type of area.
However, it is important to point out just how much money has been involved in this project. We now have a suggested figure of a £150,000 increase on capital of £200,000, making £350,000. A large portion of this, as can be seen from the reports in the Dáil Library, was spent on development work on the bogs. An end result which would have been satisfactory to this House and to everyone in the country, would have been if this development work had resulted in a trading profit, a net trading profit rather than a gross profit before payment of wages and expenses. Unfortunately, such has not been the case.
I observe in the report for the year 1967 that it is stated that "it is quite clear that the project cannot be brought to an economic level until additional plant and machinery is in-stalled and production brought to the 2,000/2,500 ton level envisaged by the committee on the Glenamoy grass meal project." Then we find that the net loss in that year was a figure of £12 0s. 1d. per ton, or a net loss of £12,857. I want to emphasise that this sort of loss—all the losses I can find total up to something in or around £25,000 or £30,000—is treated in these accounts as a trading loss. It takes no account at all of what they call their development account. You can have a profit and loss account in an ordinary business, a trading account and a balance sheet. I suppose this development account which has been referred to could be referred to as capital expenditure in a balance sheet.
The purpose of capital expenditure is to produce a good trading position that can move a gross profit in the trading account to the profit and loss account. They bear all the expenses of an ordinary business and produce a net profit after depreciation has been taken into account against that net profit.
The year 1967 was a bad year for the production of grass because it was so dry. Therefore, let us not be unfair. In the year 1967, apart from the vast sum of some hundreds of thousands of pounds spent on development work there was a loss of £10 per week per employee. It is unpleasant to have to say that in this House but let us face it, the truth must be spoken. There was a loss of £10 per week per employee. It would appear, in fact, that if any other project in the area had been used that loss would be smaller. Let us be fair because in 1966 which was not a dry year the loss—again not taking into account the vast sum of hundreds of thousands of pounds on development —was £248 per year per employee or about £5 a week. In 1965 it was about the same—£237 per employee.
This brings us to consider whether there is great wisdom in what the Minister is doing. This Bill was produced just before the Dáil broke up before the election. It could not possibly have been reached. No doubt the Minister was pressed for time to consider all the matters under his control, and no doubt the Cabinet were pressed for time, but it is certainly a coincidence of some note that the Bill was circu-lated a couple of days before the Dáil broke up and that, under the normal statutory procedure, a motion had to be moved in pursuance of Standing Order No. 106 to reactivate the Bill without going through the whole paraphernalia again.
However, there are certain things we must also consider. Let me say that on this side of the House there is no desire to affect jobs in any way. In proof of this I want to remind the House of what was done previously and which nobody can refute. When it was found the previous company was incurring serious losses in 1956 and when it was put into voluntary liquidation, each one of the employees there was found employment as good as he had in the research project that was set up there at Glenamoy, research into what could be done in this area of Ireland on blanket bog and on hill-sides, in the application of lime, the improvement of grasslands and the ex-pansion of forestry. Not one family in that area lost a job.
Then in 1959 the grass meal project was reactivated. The market for grass meal must now be examined. There has been failure in the export of grass meal across the seas. There has been success in the export of our grass meal to Northern Ireland. The market for grass meal here has im-proved from those days when, reading the reports, we can see the figure was in the region of 8,000 tons to a figure which could now be taken as between 12,000 to 14,000 tons within the country. The market in Northern Ireland accounts for 6,000 or 7,000 tons. Therefore, the total market available to us, unless we can crack a market in Britain, which we have not succeeded in crack-ing, or a market on the Continent, which seems unlikely, is about 20,000 tons.
The commercial operators in this country are quite capable of producing 20,000 tons. Again they have worked in complete harmony and cohesion with the people in Glenamoy, and, as far as I know, they have even helped them to market some of their produce. At the same time, if the production in Glenamoy is increased, the labour potential there will be affected very minimally and, at the same time, there will be a danger of over-production of grass meal. At that stage it will be a question of whether or not the grass meal manufactured on the very good grasslands in the east, in Westmeath, Meath, Dublin, Wexford and other places, will stand up on quality against the grass meal from Glenamoy. If it does, then we shall find that the surplus of grass meal which exists at this moment in Glenamoy will exist to a greater extent and we may get our-selves into serious trouble. The salient point still is that the amount of capital expenditure incurred on the preparation of blanket bog for the production of grass has not resulted in a net profit and that the degree of employment in relation to the capital expenditure now asked for has been unsatisfactory, and that if any commercial operator was employing 26 men after spending £350,000, he would be broke.
That is not to say that, when we have gone this far, we should not go all the way. We on this side of the House will not stop the Minister going the rest of the way. But there is something that has to be safeguarded as well, that is, that the people who are paying rents, rates and taxes and producing grass meal commercially will not be injured by this proposition, which is only a proposition before the House. Before this Bill passes through here and becomes an Act—and it can be done this evening if the Minister goes into great detail on it as I would ask him to do—I want the Minister to guarantee that the operation there will not be so extensive as to damage the opportunities of the commercial firms to sell their grass meal.
There is another factor the Minister did not mention, that is, that up to now the north of Ireland did not produce grass meal. The northern Government has an institution called the North of Ireland Trust and the purpose of this body is to help agriculture to develop lines that are not being done properly or that have been neglected. One of the things that has been done up there is to restart the growing of flax. They have put money into that and, like this project, they will not get their money back very easily. At the moment in Limavady the North of Ireland Trust, in partnership or agreement with a subsidiary of ICI, Richardsons of Belfast, are preparing to make a colossal amount of grass meal. This is something the Minister must consider very seriously. He must explain to us why we can go blissfully ahead knowing that our market is of the order of 20,000 tons and that another Government within the confines of this island have decided to produce some thousands of tons themselves.
This North of Ireland Trust is not just an institution for commercial operations. It is an institution to give example to the farmers, to the businessmen up there, to encourage them to visit the operations of that trust and then proceed to do the same themselves. It is something like a pilot farm and if this is to continue where are we going? Are we to find, having expended £350,000, that the 26 people in Glenamoy will have hundreds of tons of grass meal piling up in their stores and be unable to sell it?
My information on this is that there are two selling organisations operating in this country. There is the ordinary private operator trying to sell on his own, and then there is an organisation which has its travellers and everything else, pools its production and sells. I understand that part of the problem is that there is no selling organisation in Glenamoy.
We have been asked for a sum of £350,000. Having read the Official Report and also read the reports of the two companies that are filed in the Library, I am in a quandary to know —and I should like the Minister to tell me when he is replying—whether the figure is £450,000 or £350,000. The first company was floated for £100,000 capital in 1953. It was in voluntary liquidation in 1956, and then the new company was floated in 1959. If the £100,000 for the old company is not included in the £200,000 of the new company, then the figure is £100,000 plus £200,000 plus £150,000 sought now. If the figure for the old company was taken into account when the new company was formed, then it is only £350,000.
There is no point in trying to produce the bad side of a story and not produce the other side as well. I am fully aware that there was a scheme under the old company whereby there were to be grants given to the extent of £350,000 and that this was wiped out under the provisions of the new company, and that the matter was dealt with as a development account. However, I should like to be told whether the figure is £450,000 or £350,000, because I was not capable of working it out myself in the time that was available to me.
The question of the plant in Northern Ireland, which plant I want to assure the Minister here and now is purchased, must make the Minister feel a bit worried about the fact that so far the best market we could crack was 20,000 tons and at the present moment we have that amount available. At the same time, there is, I understand, a big stock left unsold from last year. Now there seems to be a suggestion that production in Glenamoy should be increased to 150,000 tons—I am sorry: 2,500 tons —and the question of difficult marketing conditions, quoted by the Minister, is one, I suggest, that did not give that because, if the commercial people can get what we call in the milling trade "down to bare boards", there is no reason why a Government official cannot be just as efficient and get down to the bare boards.
I want now to come to another factor. The losses produced on paper will, in my opinion, be far greater than they really are. From personal experience I know that one buys milling machinery at a very high figure. One puts that machinery into one's production unit. If it is sold subsequently secondhand the price obtained is a mere fraction of what was paid for it and the only way one can get money out of it is by running it at a profit over ten, 15 or 20 years, availing of one's depreciation allowances, which, as the Minister knows, are akin to the wear and tear allowance against income tax and, when the machinery becomes obsolete, one then has enough liquid left to go out and buy another machine. That is the only way in which to get money out of milling machinery. That is the only way in which to get money out of grass milling machinery and out of farming machinery.
The machinery for making silage is akin to the machinery for gathering grass. I and four of my neighbours entered into a partnership; we bought a silage-making machine. Our system is quite simple. We borrowed money from the Agricultural Credit Corporation and we floated a bank account in the local bank. We charge ourselves so much per acre and we pay so much into the local bank and that sum has to cover not only the cost of repair and depreciation but also the fact that this type of machinery wears out very quickly. We are charging ourselves a levy per acre to enable us to replace the machinery in four years.
If one looks at the depreciation accounts here one must conclude that the figure is around ten per cent. That is totally inadequate in relation to any farming machinery which is worked hard because it just does not last that long. It is not of that long-lasting quality. There is then in this question of machinery the fact that, if one is not making a profit, and remembering that in 1967 there was a loss of £12,000, the machinery that produced that loss is worth buttons. The ten per cent depreciation is not like the ten per cent or 20 per cent depreciation one is allowed on a car after three years, at which stage one can sell the car at the figure the depreciation has produced. In this type of machinery one cannot do that. The only way in which one can get one's money back—I say this as a person of some experience—is by running the machinery all the time to make a profit. Those responsible have not succeeded in doing that in Glenamoy.
Taking into consideration the fact that this development related to a blanket bog and remembering the extra loss on the machinery, then the real loss here is huge in relation to the amount of employment involved. I could not be more sympathetic towards the people needing employment there and the Minister should rack his brains to try to produce some kind of employment there. I am glad the Minister for Industry and Commerce has been put in charge of the Gaeltacht as well because that may provide him with some opportunity of striking out and finding a way of providing employment in these areas. I suggest, however, that 26 people employed, plus an odd few weeks for the farmers drawing in grass, can lead to only one conclusion; something in the order of a quarter of a million has been irrevocably buried. That is a bad performance.
We have not got all the facts and figures on this side of the House. We are not opposed to this. This is the Minister's responsibility. Let the people decide at a later stage—a good deal later now—whether or not the Government are right, but I suggest that there is buried here a sum of about £250,000. Viable, and existing, is either £100,000 or £200,000, depending on what is owed at the moment; I have not had time to go into that in absolute detail but, with that sort of expenditure and that sort of employment, the result has been disastrous. It came about because the Fianna Fáil Government felt that the decision of the inter-Party Government in 1956 to reemploy every man employed there in the research station, with good conditions and salary, and closing down the plant, was wrong. Fianna Fáil opened it again and now we have to look at these figures and they are far from pleasant. They are not even pleasing to the 26 people employed because no one wants to be employed in a place that is losing money. I suggest the Minister has extremely detailed explanations to give. Above all, he must explain how we are going to sell the grass meal and whether or not the commercial operators, who have only this market available to them, will sell their grass meal against an increase in production in Glenamoy.
