When I reported progress on Tuesday last I had dealt almost completely with the dairying industry and the state of that industry as I see it at present. I had not dealt in full with the serious effects of the scaling down of milk prices. There are a few points which I want to bring to the Minister's notice in connection with this scaling down of prices because I believe that it is now it is having its effect.
When this was first introduced by the Minister's predecessor it was against the wishes of all the farming organisations, the creamery managers' association and everybody associated with the dairying industry. The Minister introduced a phased increase in the price of milk and it is having its effect at this point in time. In fact, it contributes to the increased cost of production because the pattern in the dairying industry is that the cows are calving at this time of the year and going into milk, and the milk producers are now aiming at a shorter lactation period. If they want to produce milk from now until such time as good quality grass is available, the only way they can do that is by feeding concentrates which are pretty expensive. If they do that they will produce milk over a longer period but it will bring some of them within the scope of the phased increase and they will not get the full value of the milk they are producing.
At this time of the year the creameries and the processing industries are not getting sufficient milk to keep them going due to the scaling down of milk prices. As I pointed out on the last occasion, the Minister and his predecessor were confused between the big milk producer and the big farmer because the big milk producer is not necessarily the big farmer. We have a situation now in which milk is being produced from the grass only and there is a shorter period of milk production. This results in our processing plants and our creameries having inflated overheads and inflated costs because they have to pay their staffs during the lean period which is a lot longer than it was heretofore.
I am told that at the moment milk is so scarce that the target envisaged for 1970-71 of 550 million gallons will not be reached and that we will not reach 500 millions gallons. I am also informed by a fairly reliable authority that some creameries are finding it very difficult to fill their contracts, and one creamery in the south is short of between 200 and 300 tons of skim milk powder. This is a terrible reflection on the policy pursued by the Government.
Early last year the farming organisations made representations to the Minister and advised him that at a time when Europe was moving out of milk production we should stay put. How right they were. Our contribution is so insignificant and our production is so small that it was a fatal mistake to move away from milk production. The Minister, who is a farmer, will appreciate that it is very easy to go from milk to beef, or to diversify from milk to any other line of production, but it is both difficult and expensive to get back into milk production. It is accepted that it takes approximately ten years to build up a proper dairy herd, and this is the great problem.
The Minister and his Department should realise that, once a farmer goes out of milk production, it is not easy to get back into it again. There seems to be no long-term planning. Last year farmers were encouraged to get out of milk production. That was a mistake. I have been told that representatives of Bord Bainne are at the moment canvassing creameries throughout the country to drop all production except butter so that we will be able to fill the quota to Britain. I do not know how true this is, but I have reason to believe that my information is pretty accurate.
We have heard a good deal from Ministers for Agriculture and members of the Fianna Fáil Party about the subsidy the taxpayer is called upon to pay in relation to agriculture. Every time there is a demand for an increase in farmers' income the reply is that the Exchequer is paying almost £100 million a year to subsidise the farming community. This is not correct. It is grossly exaggerated. I have tried to get the facts about State expenditure on agriculture. A committee was set up some time ago to examine into the amount of money provided to subsidise agriculture. Now, there is a vast difference between State aid to agriculture and subsidising agriculture. In the information supplied by the Department one finds ten different headings: education, research and advisory services; livestock improvement and eradication of disease; production and development aids, marketing support; administration of miscellaneous Acts; land annuities relief; capital for the Agricultural Credit Corporation and so on. The Supplementary Estimate for 1970-71 comes to approximately £97 million.
It was stated recently in a newspaper article that the farmer was being subsidised to the extent of almost £2 million a week. The report of the committee which reviewed State expenditure to agriculture said that it could be argued that a number of headings could be completely eliminated from this alleged State aid to agriculture. Expenditure under these headings is described as expenditure in relation to agriculture and not as State aid to agriculture. The committee are not prepared to argue that all of it is State aid. This is an important point.
In the realm of State aid unique to agriculture I list creamery milk. This aid is unique to agriculture. There is also carcase beef and lamb, bacon, lime subsidy, incentive scheme for small farmers, beef cattle incentive scheme. These come to approximately £46 million. This is a far cry from the £100 million we hear so much about.
With regard to creamery milk the Exchequer aid comes to approximately £30 million a year. There is a hidden subsidy in this. The consumer does not pay the economic price for the lb. of butter and the hidden subsidy amounts to some £5 million.
The producer of pigs is at a disadvantage in that factory processing costs are probably higher than they would be in a more rationalised industry and a good deal of the subsidy goes in price support of factory costs. This is something we should bear in mind.
There is relief of rates, a pretty sizeable sum. This is regarded as a subsidy to agriculture or to the farming community. This is what makes one ask oneself if this is the reason why such a barrier of suspicion exists between the farming and the non-farming community. Relief of rates and land annuities is a tax relief for the lower income farmers and should not be regarded as State aid to agriculture. Every one of us who qualifies gets relief in income tax. Deputies get a certain income tax relief. Could this be described as a subsidy for Deputies? This is something we should examine and, instead of talking about £100 million, we should talk in terms of £40 million which is, in my opinion, the accurate figure.
The cost of rural electrification is described as a subsidy to agriculture. This is utterly absurd. If there is an extension of supply to a doctor's house in Castletownbere is that regarded as a subsidy to agriculture? Is it part of the £100 million to agriculture about which we hear so much? It is ridiculous to regard the extension of electricity to the hills and valleys in rural Ireland as a subsidy to the farming community. The Minister should have another look at this whole question of the subsidisation of agriculture.
When the State contributes to agriculture the taxpayer has a right to know what contribution agriculture makes to the economy. The money spent on agriculture is money well spent but, in order to increase farmers' income, more subsidy will have to be provided. Agriculture employs 28 per cent of the total labour force. It accounts for 50 per cent of total domestic exports and, indirectly, it contributes to the employment of 50 per cent of those engaged in manufacturing industries. We should realise and appreciate the contribution agriculture makes to our economy. Agriculture uses £18 million worth of goods and services supplied by Irish concerns each year. This is something we should not forget. Agricultural exports are not like industrial exports because agriculture is a small importer of goods and an excellent earner, therefore, of foreign currency. The £100 million worth of agricultural products exported requires only £7 million worth of imports. Every £100 million worth of industrial products exported requires something around £38 million worth of imports. Those who complain, particularly those in the cities and towns, should bear this in mind when they talk about subsidising the Irish farmer. This is something they should bear in mind.
Statements are made from time to time about farmers not paying income tax but what people do not realise is that farmers pay rates on their place of employment which nobody else is asked to do. Confusion exists and no effort is being made to clarify it among people engaged in work other than farming. If the farmer pays rates on his place of employment surely he is not expected to pay income tax? I believe if the rates were abolished completely the farmers would not object to paying income tax on their earnings.
We have made very little progress in dealing with the problem of animal health. Two years ago, in the debate on the Estimate for Agriculture I brought something to the notice of the Minister and asked him to deal with it when he was replying but he did not mention it. Probably the present Minister has a better knowledge of agriculture than any of his predecessors had but so far as eradication of animal diseases is concerned progress is very slow and disappointing. At that time we had a situation which was brought to my notice by several people in which we had depots for the collection of dead animals. This is a widespread, pretty lucrative business from which some people have made considerable amounts of money in recent times. The dead animal is collected without regard to the cause of death and immediately afterwards the carcase of that animal is distributed throughout the country as dog meat without any control. This is adding to our eradication problem. The Minister should look into this because it concerns everybody in the farming community. If we wish to avail of the opportunities presented by entry into Europe it is essential to ensure that our cattle are free of disease. I do not know what is the solution to the problem but surely something could be done, either by way of licensing or better control of those engaged in this business? The matter is causing a great deal of concern.
We have failed to realise the extent of the damage and the cost to the farmer of brucellosis in recent times. Particularly in the southern dairy area brucellosis is very prevalent. There is nothing to stop a farmer, as soon as a cow aborts, from taking her to market and exposing her for sale among other cattle. There is no control. This is something that should be remedied. I should like a reply from the Minister on those points.
In regard to bovine TB eradication, this year a number of herds have broken down. I do not know why but I was amazed at the amount of testing being done in my own area by the vets. Is this an indication that no progress is being made? I put down a question to elicit some information from the Minister but he would not agree that this was the situation at that time. We have made very little progress in the eradication of bovine TB.
In the case of warble fly eradication the half-hearted effort made by the Department to get the farming community to eliminate this pest is pitiful. Practically no effort was made and at the end of last year farmers did not know whether they should or whether they would dress their animals because there was no encouragement, no lead given by the Department. When the Department did embark on the scheme it was an absolute waste of public money because it was continued only for a while and quite a number of cattle were not dressed. If you want to eradicate warble fly, treatment must go on for two or three years and every animal must be dressed against a blue card. That is the only way you can ensure full co-operation and be successful in eradicating the pest. Farmers now realise the amount of damage that the warble fly can do particularly to store cattle. I hope to hear from the Minister on that subject.
I have heard a good deal about animal feed. Veterinary surgeons are very concerned about the amount of antibiotics being used indiscriminately in animal feed at present. Some vets have complained that it is now difficult for them to treat animals because of the indiscriminate use of antibiotics particularly when they have to deal with animals that already have had an overdose of antibiotics. New brands of pig feed, rations and meals are coming on the market such as "rapid rearers" and feeds for young pigs and the amount of antibiotics used is detrimental to the industry. Is there any control? There is a certain control in regard to the millers but quite a number of farmers manufacture their own rations. I read a report from an analyst in England in which he said that he had found arsenic of 12 parts per one million in the liver of a pig. The matter is getting out of hand in this country. Copper sulphate, for instance, is now added to pig feed. What you would take up on a sixpence is sufficient for a ton of pig feed but you have farmers manufacturing their own rations using it ad lib. This is very dangerous and it is a matter the Minister should examine.
I should like to see the Minister using his good offices in the present farming dispute in an effort to bring the farmers together and get them to end this strike. The Minister should try to deal with their problems. They have problems. The Minister will have to grasp the nettle firmly and deal with them regardless of what criticism it evokes from those not engaged in agriculture. The Minister must try to settle this dispute which will otherwise escalate and cause serious damage. Even now we have evidence that it is causing damage. There are too many people on strike and too many willing to go on strike at the drop of a hat. I should say that the farming community are the most tolerant section of the Irish people.
They have had a pretty rough time in the past. The Minister has a duty to meet the farming community and come to a settlement with them so that they will get back to work, particularly now as we are approaching spring. We are now in the midst of this strike by the Irish Creamery Milk Suppliers' Association and the NFA and we will see, if this continues, wholesale redundancy and wholesale unemployment because already it has had its effect on the lime quarries and the machinery firms in which men are being laid off. The Minister should be sensible about this. Surely it has been proved beyond doubt that they have a grievance. I hope that before it is too late the Minister will realise the seriousness of the situation.