Dáil Éireann debate -
Tuesday, 23 Nov 1971

Vol. 257 No. 1

Committee on Finance. - Industrial and Provident Societies (Amendment) Bill, 1971: Second and Subsequent Stages.

Minister for Industry and Commerce (Mr. Lalor)

I move: "That the Bill be now read a Second Time".

Co-operative dairy societies, often known as creameries, are industrial and provident societies, that is, societies which are registered under the Industrial and Provident Societies Act, 1893. Section 53 of that Act provides that two or more industrial and provident societies may amalgamate by passing a special resolution. Under paragraph (a) of section 51 of the Act, a special resolution must be passed at a general meeting by not less than three-fourths of the members who vote, and under paragraph (b) of that section, the resolution must be confirmed at a subsequent general meeting by a majority of the members voting. Voting in either case may be in person or by proxy.

The purpose of this Bill is to amend section 51 (a) of the Industrial and Provident Societies Act, 1893, to enable the passing of a special resolution for the amalgamation of co-operative dairy societies by a simple majority instead of by a minimum three-fourths majority as at present. The amendment was proposed by the Minister for Agriculture and Fisheries, and I am sponsoring the amendment as I am responsible for administration of the Acts dealing with industrial and provident societies.

As indicated in the Third Programme for Economic and Social Development, the rationalisation and diversification of the creamery and milk processing industry is regarded by the Government as an essential and urgent objective of agricultural policy. The Minister for Agriculture and Fisheries has stated that, although some amalgamations of co-operative dairy societies have taken place over the past few years in furtherance of this policy objective, progress in this direction has been much slower than had been hoped for and than is now especially called for with the prospect of early accession to the European Economic Community. At meetings which he had with the Irish Agricultural Organisation Society Limited and with other farming organisations, it had been strongly represented to him that the passing of a resolution for amalgamation by the required minimum three-fourths majority had proved a serious retarding factor in the amalgamation of co-operative dairy societies and in the rationalisation of the creamery industry. I understand that these organisations support the proposed change to a simple majority requirement.

The Minister for Agriculture and Fisheries has informed me that he is convinced of the force of the arguments made by the farming organisations. Numerous instances have come to his notice where resolutions for amalgamation, although supported by a substantial majority of members at meetings, have failed to become effective because of the three-fourths majority requirement. These instances have been notable particularly in Kilkenny and in the Golden Vale area of County Limerick and North Cork. It would be only in an exceptional case that all members of a co-operative dairy society would derive their living solely or mainly from farming. Consequently, it is in some cases a relatively easy matter to secure 25 per cent support, on a variety of personal grounds, for an opposition motion to an amalgamation resolution. The result is that the real economic interests of the majority of members of such societies are thwarted and measures calculated to further Government policy and agricultural development are negatived.

I support the view of the Minister for Agriculture and Fisheries that, in so far as co-operative dairy societies are concerned, it is urgently necessary that the requirements of section 51 (a) of the Act of 1893 should be amended to enable a resolution for amalgamation to be passed by a simple majority.

I wish to emphasise that the proposed amendment will not alter, in any way, the existing requirement for a confirmatory resolution as set out in paragraph (b) of section 51 of the Act, and it will not affect any other matters which, under the Industrial and Provident Societies Acts, require the passing of a special resolution. For example, the amalgamation of registered societies, other than co-operative dairy societies, would still require the passing of a special resolution by a minimum three-fourths majority.

I commend this Bill to the House.

Mr. Donegan

We in Fine Gael accept this Bill wholeheartedly as a good step forward and our only criticism might be that it should have been introduced many months if not a year or more ago. Those of us who are familiar with agricultural matters know of the necessity for the amalgamation of creameries and it is not necessary to go into detail in this regard in connection with this Bill. Human nature being what it is, there are many occasions when people would wish to retain their independence when this would not be in the best interests of the country, the area or even the members. This could be due to personal reasons, as the Minister said, or because people believed their own efforts were better than would result from amalgamation. This is the age of amalgamation and, perhaps, of take-overs and while these things may not appeal to all of us, in the interests of rationalisation they are necessary if we are to make progress in the present-day world.

Also, there are various factors that have been mentioned in a general way by the Minister such as the cost of machinery for the manufacture of milk products. This is mainly stainless steel machinery for hygienic reasons and is highly expensive and in the size of units now being used it is beyond the reach of small creameries. Yet, people who might be in a commanding position as regards votes in small creameries might hold up amalgamation for some reason, perhaps because they would get agricultural goods at a lower rate or something of that kind, while the fact would be that for their own good and the good of the area and its people amalgamation would be absolutely necessary.

Another factor is the cost of marketing. Nowadays one does not buy butter or cheese or even cheddar cheese; one buys a brand name. Perhaps this brand is sold to us by advertising, again at a huge cost. When we buy the brand product we expect to get absolute uniformity of quality and taste, the taste and quality which pleases and which was advertised. This is not possible with a proliferation of small creameries.

The Minister is correct when he says it is sometimes extremely easy to get 25 per cent of the members objecting among the shareholders in a creamery and that percentage can stand in the way of a great majority who have other things in mind.

I think the House should pass this Bill tonight and ensure that the rationalisation of our creameries proceeds with due haste. No personal matters should be allowed to interfere and it is in the interests of all concerned that the amending Bill becomes law. The safety factors mentioned by the Minister near the end of his speech, where he draws attention to the fact that a general meeting must be held to confirm the decision and that section 51 paragraph (b) of the Industrial and Provident Societies Act, 1893 will stand, appear to me to be a guarantee that the amending legislation would not be used for any other than a good purpose. I have no hesitation in saying that this is proper legislation and should be passed tonight.

Minister for Industry and Commerce (Mr. Lalor)

In view of the fact that, in general, there is no criticism of the proposal and that Deputy Donegan has welcomed the Bill and spoken in its favour, I have nothing specific to add to what I have already said. Deputy Donegan mentioned that the Bill does not intend interfering in any way with various other societies that are registered under this Act and this is specifically spelled out in the Bill in order to avoid any danger of the intention behind this legislation being extended into any other field. I am happy that the House accepts this Bill and I share with the Deputy the view that it is necessary that the Bill be passed as quickly as possible so that its benefits can be put into operation.

Question put and agreed to.

Agreed to take remaining Stages today.

Bill put through Committee, reported without amendment, received for final consideration and passed.