We shall be hearing from him in due course. I tabled another question to the Minister asking him if in view of the fact that it may be impossible to provide State funds to marketing boards dealing with products covered by common agricultural policy after our accession to the EEC, he would consider making substantial funds available in advance of accession to ensure there is adequate finance available for agricultural marketing boards in the years ahead.
The point I am making is that when we are members of the EEC it is possible these marketing boards will have to be funded solely out of a levy on produce and the matter we should be considering is whether, before we become members and before we are subject to these regulations, we could give a substantial sum to these marketing boards to put them in funds going into the EEC so that they would not need to impose such a high levy on farmers and so that their operations in the marketing field could be in part financed out of funds already given to them by the State. This, apart from anything else, would be good anticipation. What we cannot do when we become members of the EEC we can still do as non-members and we should take advantage of this breathing space.
Another point which should be looked into is the method of operation of the Dutch system of marketing of agricultural produce within the EEC. This was explained to me only recently and I am sure I will be able adequately to explain it to the House. However, the Minister's officials will be able to dig out the details. What I believe has happened is that while the Dutch are not allowed to have a State marketing board, they are able to achieve the same effect by establishing companies in each of the countries to which they export which are subject to the company laws of those countries, are not controlled by the State but have State investment and as well have shareholdings by various farming organisations. Those boards have the same effect as a State marketing board and they are able to market solely Dutch products in those countries in the same way as a State marketing board would be able to do, which strictly they are not because their funds are not solely subscribed by the Government. We should consider setting up a similar system which would set up companies to handle agricultural exports.
Another problem is in relation to agricultural produce which takes a relatively long time to produce. Possibly the clearest example is beef. From the time of gestation until the animal is ready for the market, 2½ or three years elapse. If we wish to achieve a certain level of beef production in 2½ years, the investment decision must be taken now because when we are in the EEC we want to be able to produce so many cattle and we must do it 2½ years in advance. For that reason I regret there is nothing in the Minister's statement to give hope in this connection. Beef production needs the most long term investment and I had hoped the Minister would have intimated some provision in this regard. I welcome his reference to milk production.
Milk production is indirectly related to beef but milk production increases come much more quickly than increases in beef production. All that is necessary to increase milk production is to get a certain number of heifers in milk and this can be done from existing heifer stock. To increase beef production one must look 2½ years ahead and we must do something about it now. I should not be interpreted as criticising what has been done for milk production and I wholly support the Minister's action, but could he not also have been doing something about beef so that our production would reach an acceptable level on our accession?
I suggest that he should reconsider the operation of the present differential under the beef export guarantee scheme, the effect of which is that factories get roughly two old pence per lb. less in subsidies than their direct competitors in Northern Ireland and Britain. Unless we are to export our cattle to Britain to get that subsidy as British animals, we cannot benefit by the increased rate they are getting, whereas if we remove that differential it would increase beef prices here and give farmers confidence to invest. It would also give farmers an assurance that, during the transition period during which this differential would otherwise continue to operate, they would be able to see ahead and make plans. A decision now would be an advantage which would operate over a long period.
Another point which might be considered is that the beef incentive scheme is not available in respect of the first two cows in calf. That scheme has been effective, I concede, in greatly increasing cattle numbers but we have much greater potential and I suggest it should be extended to the first two cows in calf. A certain number of farmers, particularly small farmers, would go into the scheme and this inevitably would increase cattle numbers. The Minister probably has in mind or has had representations about many other possible incentives specifically to improve beef production.
Another point which should be brought to the Minister's attention is that it is unfortunate that the operation of VAT in relation to agriculture is to be brought into effect. This matter is a little uncertain at the present time. The idea is that the farmer will pay tax on his inputs and get a refund when selling the products. During the intervening period he will be at a loss for his money. That period will extend from March, 1972 when the first taxable input will be bought up to the end of that year or later when the farmer will sell his products. Some farmers will be out of money for that length of time. The amount involved is £7 million or £8 million over the whole farming community. It is unwise that at that crucial time in terms of investment decision for the EEC farmers should be deprived of their capital. The amount involved is important to them.
There is also the question of border formalities within the EEC. Imports to Italy as a result of administrative costs on the Italian border must bear what is actually a tax of 15 per cent. As a member of the EEC we will seek to export some of our produce to Italy. Administrative costs of this nature would be to our disadvantage. The Minister seems to be unaware of this possibility. When I raised the point he asked me for particulars of any conceivable instance in the future in which these border charges would inhibit us. The Minister did not seem to think that they could affect us at all. If we are members of the EEC they are bound to affect us because we will export some produce to Italy. I told the Minister that if we were exporting cattle or other commercial goods as a member of the EEC we would have to pay something like 30 per cent for administrative costs. My figure was not correct but the principle was correct. The Minister seemed to be unaware that this possibility could arise and he was not doing anything about it. I hope that the Minister will make strong representations to the EEC to have these border formalities removed. The Minister's response to this suggestion may be to say that we are not yet a member of the EEC. The Minister can put his views on record and thereby strengthen the hands of the countries advocating the removal of these formalities, who could then say that Ireland, who is an applicant country, is against these formalities also. The Minister is not prepared to make his views known. He should do so quickly.
On November 25th I put the following question to the Minister:
106. Mr. Bruton asked the Minister for Agriculture and Fisheries if it is likely that physical distances from the depots of the EEC beef, milk and grain intervention agencies in Ireland will mean that some farmers will get appreciably less for their produce than the basic intervention price in glut conditions.
I had seen a report of a trip made by the Irish Grasslands and Animal Production Association to north-west Germany. A number of farmers there had said to these people that for as long as a 12-month period they had not been getting even the basic intervention price for their goods. I was puzzled about what happened because if this happened in Germany it could happen to us. A number of possible explanations suggest themselves. This could be due to the floating of currencies. While the farmers might be getting intervention prices in Germany they might not be getting as much as the farmers in France because of the international monetary situation and the floating exchange rates.
That would not explain their allegations that they were getting less for a 12-month period because the floating of currencies has not taken place for 12 months. I had the impression from discussing this with an official of COPA, the General Union of Farmers' Organisations, and also with somebody in the Centrale Paysanne in Luxembourg, that this was due to the fact that the intervention price was set as a wholesale price and the farmers were getting less because their goods had to go through the hands of the wholesalers due to two factors—first, physical distance from the intervention agency, which meant that the farmers who was not able to do so himself had to get somebody to carry his produce to the agency and pay for it and, secondly, there were minimum quantities which could be bought by the intervention agency and no individual farmer would have enough himself to bring him up to that amount. The latter of those two reservations has been partly eased by what the Minister told me when I raised the matter. The Minister said that the amount in the case of skimmed milk powder is 20 tons. I suppose that most of our creameries would have 20 tons. In the case of wheat the figure is 50 tons. I am open to correction on this figure. A number of our farmers would have 50 tons but some would not and they would have to employ the services of a wholesaler and therefore would get less than the intervention price. The Minister was not able to answer me about the minimum quantity of beef. It is possible that the beef quantity which must be given to the intervention agency would be quite large. Farmers do not sell their beef in large quantities, but at different times of the year when it suits them. Beef is not a seasonal crop. They would not sell in quantities sufficient to enable them to act as their own wholesalers. Therefore, beef farmers would be getting prices less than the intervention prices. The Minister's general response to this question was that the best returns would be attainable on the Communities' markets and that it is by selling to those markets that Irish agriculture would make the most of the opportunities which EEC membership will provide.
He said that our aim, therefore, must be to sell as little as possible to those agencies. It is all very fine for him to say that, but it may be that we will have no option but to sell to those agencies because, of necessity, we are a producing country and if there is a glut of a particular agricultural product it is likely to be felt first in the supplying country. Therefore, it is likely that the supplying country will be the first that will have to turn to an intervention agency. Therefore, it is likely that, proportionately speaking, Irish farmers being further from the consumption market than, say, farmers in Britain who are living beside the market, will be the first to have to turn to an intervention agency. It is very important that the provisions in relation to intervention agencies should be satisfactory to us and that our farmers should have an assurance that they will get the basic intervention price and that they will not get less.
It is also important in relation to this matter that the intervention price mechanism should be introduced quickly. I know there is an automatic intervention price mechanism in regard to milk and grain where the price is set and, if in any case the price goes below a certain percentage of the guide price, you can go automatically to the intervention agency and sell your product. As far as I know in regard to beef there has to be a council decision to introduce intervention buying. It does not exist on a continuing basis. It is possible that, if there was a delay in the introduction of the intervention mechanism in the field of beef, we could be getting less than the intervention price for our beef for some weeks because the intervention measures had not been introduced. We will want to watch that. We will want to be sure that, as soon as prices here fall below the intervention level, intervention measures are introduced immediately. That will call for great speed and alacrity on the part of the Department and a good deal of arm twisting on the part of our representatives in Brussels.
I hope these problems will not arise but we should foresee them. My whole criticism of the Government's approach to the EEC is that they are not foreseeing these problems. They are not looking ahead and they are not telling the people what the problem will be. Admittedly, they are concerned, as I believe they should be, to ensure that the referendum goes through but the referendum campaign will carry much greater force if the Irish people can be confident that the Government are availing of every opportunity to improve the EEC regulations, pressing hard, not trying to softsoap the EEC or trying to cover over the difficulties in order to give the farmers of Ireland a picture of the EEC which is somewhat less than the reality and which shows only the cosmetic effects and conceals the warts.
I was making a point earlier about the lack of a common policy in the field of mutton and lamb and the very severe effects that will have for us and the fact that we have not as yet made our opinions known, that we have not pressed for the early adoption of the common policy. This argument also applies to potatoes which are an important product particularly in the northern part of my constituency. In north Meath there is a lot of potato production. Mushrooms are another factor. In my constituency we have a mushroom factory in Carbury in County Kildare. It is very important that there should be a common policy for both of these products in order to provide intervention buying procedures which will ensure that the prices of these products will not fall too low. The Government have not expressed an opinion on this so far as I know. They have not said that their policy is to get a common policy adopted. They have just said: "This will be done when we are in the EEC." This should not be their attitude.
I should like to move now to a question which I touched on already, and that is, the question of structural reform. I propose to deal with this largely in an EEC context but there are some things which can be said about the immediate measures which have been introduced. While I welcome the extension of the amount which will be paid to farmers at the various stages of completion of their development plans under the small farm incentive bonus scheme, I very much regret that the scheme has not been extended and that the target has not been raised.
The target at the moment is, and has been since the introduction of the scheme, that farmers can participate if they can show that they will achieve an income at the end of the development plan of £700 a year. Who wants to enter a development plan and go to all the trouble of drawing up accounts and participating with the adviser if all he is aiming at at the end of that period is an income of £700 a year? Very few people, indeed, are prepared to make all that effort in order to achieve £700 a year.
Perhaps that figure was in some way realistic when the scheme was introduced originally, but it is no longer realistic at all. It should have been adjusted regularly in line with the cost of living. Apart from that, this whole system of development planning in consultation with the advisers, with State intervention to provide incentives, should be extended and can be extended usefully to a much wider range of farmer than those who are at present in the category to which the small farm incentive bonus scheme applies. We should consider re-examining this scheme with a view to extending it to a very great extent so that it will cover a much larger number of farmers. The Minister has said—and he is correct—that this scheme is in line with the Mansholt proposals, but it is on far too limited a scale. While the concept is the same, the scale is not the same at all. It is important that we should expand this to a great extent.
A natural corollary of what I am saying is that the number of applications and acceptances under this scheme has been falling drastically each year since the introduction of the scheme. Perhaps it rose after the first year or so, but ever since then it has been going down. This is obviously a result of the fact that the target is so abysmally low that very few will bother going to the trouble of trying to achieve it. This should be considered. This new measure which the Minister has announced is too little and too late. Already there has been this drastic fall-off in the numbers entering the scheme.
There are remarkable differences between various parts of the country in regard to the number of people entering the scheme. The latest figures I have are the figures I quoted in my speech last year. It would be no harm to repeat them because they illustrate the point very well. I said that a point worth noting was the difference between various counties in regard to applications. I said that in Donegal in the last three months of 1969 there were only 13 acceptances even though there are 12,500 farmers in that area and of these 77 per cent have less than 50 acres; in Mayo there were 163 acceptances, a matter on which the Mayo county committee were to be commended; that was 163 as against 13 although the number of farmers in that area was not much greater than the number in Donegal and that in Meath there was only one acceptance in the same period whereas there were 31 in 1968. This is a county in which, too, there are many small farmers who would benefit from the scheme if it was attractive. Apart from the overall attractions of it, we should consider the question of the differences between certain areas. Obviously, a big effort was made in Mayo to promote the scheme and the advisers went out and endeavoured to encourage people to participate in the scheme and were prepared to help farmers in its operation whereas in other counties it is possible that the advisers did something about the scheme only when they were approached on the matter. If this scheme is to be effective there must be an effective selling approach to it.
In relation to experience on the Continent, the point has been made to me that these schemes will work but that there must not be imposed on the farmers too great a burden of account keeping. I am not saying that it is not necessary to keep accounts but that bureaucratic civil service procedures should not be imposed on farmers. In other words, farmers should not be required to account for their activities to the same extent as perhaps civil servants might be required to do and that we should try as far as possible to minimise the amount of bookkeeping involved in the scheme. Of course, a certain amount of bookkeeping is necessary for the operation of the scheme and even if farmers are not participating in the scheme, the keeping of accounts would be beneficial to them. However, we should avoid extensive bookkeeping.
On the question of structural reform, I have already made most of the relevant points by way of explanation on an earlier point concerning the Government's general attitude to the EEC, their sense of inevitability about what is being proposed and their reluctance at this stage to put forward proposals. One point that should be considered in relation to structural reform concerns the land distribution policy of the Land Commission. I asked the Minister for Lands how he expected the new targets under the Mansholt proposals would affect the land distribution policy of the Land Commission. The Minister replied that it was not possible at this stage to indicate the extent to which these proposals would finally be approved and adopted by the Council and that in these circumstances it would be premature to come to any final conclusion as to the effect of the proposals on the existing land distribution policy of the Land Commission. He said that under the agreed procedures we shall be given the opportunity of presenting our full views to the Community. The fact is that these proposals are available already in great detail and what I was asking the Minister was not to say what the final decision would be but at least to interpret the present proposals and their effect on the Land Commission. He could have ascertained that information quite easily and he would not have to wait until the proposals were finally agreed before giving us an interpretation of them. If he waits for as long as that, it will then be too late. The proposals will be accepted and we shall not be able to do anything further. Now is the time to alert farming opinion and not after the scheme has been accepted finally. When I asked the Minister if he had made any representations on the matter, he became very petulant and said that he had answered the question already. It was clear that he had made no representations although he has been parading around the country as the great apostle of part-time farming, compassion and so forth. Perhaps less oratory and more work would be appropriate in so far as the Minister for Lands is concerned.
In relation to part-time farmers the position so far as I can see is that in order to participate in the Mansholt Plan development scheme, a farmer must show that from agriculture alone, he can achieve what is described in the plan as a comparable income with that of non-agricultural workers in his region. A part-time farmer who would be working for some of the time in industry might, taking his combined activities, be able to achieve a comparable income within the stated period but the requirements of the Mansholt proposal are such that he must achieve it from agriculture only. The effect of this would be to exclude many efficient producers from the Mansholt proposals and from the investment aids made available under those proposals. Because of the many part-time farmers in constituencies such as those represented by Deputies Malone, Keating and myself, this should be a matter that we are prepared to take up. The exclusion of these people from the Mansholt proposals would put them at a severe competitive disadvantage by comparision with full-time farmers who possibly might not be as efficient in terms of utilisation of land and productivity per acre as the smaller part-time farmers but who, because of their larger acreage, can achieve from agriculture solely the level required.
Another point that should be taken up by the Minister is the effect that the Mansholt proposals will have on our existing State aid to agriculture. Whenever the Minister has been asked a question on this matter, he has said that it will fall to be considered in due course by the Council of Ministers. During the time I was visiting the EEC capitals last month, the impression I got was that it was generally agreed within the Council that national State aid would have to go by 1975 and that the French were resisting this but that most of the other countries were in favour of it. Since they were prepared to tell me that at that time, it is clear that the Minister is living in a rather unrealistic situation if he thinks that decisions have not more or less been taken nor lines drawn up on this question. The Minister must do something about this matter now because it would probably be too late for us to take action if we were to wait until after our accession.
In so far as the Mansholt proposals in relation to State aids are concerned, there is specific provision in the directive in so far as it does not prejudge the member State's option of taking additional assistance methods which may differ from those referred to therein or involve amounts in excess of the ceiling provided for, subject to the condition that investment aids to farms which fail to meet the requirements specified in Articles 2 (1) and 4(2) are prohibited. All that is in Article 2 is a reference to main farming activity, farming qualifications, bookkeeping and development plans. The possible interpretation of that could be that the national government could not give aid to farmers except those who are completely in line with the Mansholt proposal. That would exclude a lot of people. Article 4 (2) constitutes the other grounds on which certain requirements must be complied with. I am not sure as to the meaning of Article 4(2) which says that the term "working income" within the meaning of paragraph 1 should be understood to mean the annual average gross wage including payments made for social security purposes earned by workers outside farming in the areas in which the agricultural enterprise concerned carries on its activities. As far as I can understand it, that means effectively that to get aids from the State one must have this working income and be able to attain this working income and I would imagine that it must be done in agricultural production. The effect of these exclusions will be, if I am correct, that the national Government will not be able to give aids to agricultural other than to farmers who are already in the development programme of the Mansholt proposals. This will have a bad effect on aids which are at present available to part-time farmers, it will have a bad effect on farmers who are too small at the moment to reach the level at the end of the development plan, farmers who are too small starting out. It will also mean that farmers who start off above the comparable income level—if there are any farmers in this country, and I am sure there are some, who are earning more than the average national income—will also be excluded from national State aid. I suppose there will be no tears shed for these latter farmers in a social sense, and I do not think there should be, but there is the possibility that big industrialists will still qualify for grants from the national Government in the EEC. In terms of economics it is possible that there will be an advantage to industrial investment over agricultural investment and that large industrialists looking for credit, because they have national aids available to them, will have a better credit position than largish agricultural enterprise. They do not have to be all that large; all they must have is over the national average income and they are out. That is serious because it will distort competition for investment between industry and agriculture.
My interpretation of these proposals is possibly quite faulty and I am hoping that the Minister will be able to allay my doubts but these issues are worth raising anyway. We certainly need to make a case now before decisions are taken about our State aids. We need to come out now and tell the EEC that we want to retain our fertiliser subsidies, if we want to retain them, that we want to retain farm building grants for all farmers, if we want to retain them, that we want to retain land project grants for all farmers, if we want to retain them. The time to speak is now and not to wait until we are in the EEC and the decision is effectively taken even if it is not taken on paper.
I should like to know what the effect of the EEC will be, and particularly the structural proposals of Dr. Mansholt, on the operation of the Agricultural Credit Corporation. The ACC can at present give loans to all farmers who seek loans and who are prepared to put forward good, creditworthy proposals. Will this exclusion of national State aid apply to the ACC and if so will this mean that the ACC will be excluded from giving credit to farmers other than to those who are participating in the development plan under the Mansholt proposals? This should be considered because again it will be starving farmers who are not in the middle group, particularly the small farmer who might be excluded from the Mansholt proposals but who might have some small, sound project which required credit and it will also be starving any farmer who starts out earning more than the "comparable" income. He will not have these credit facilities whereas quite possibly the Industrial Credit Corporation or the Stock Market which will be making credit available to industry will be able to give credit to industrial enterprises of all sizes. Agriculture will be in a worse credit position than industry and that should not happen because we are an agricultural country. We are able to yield a much greater return in terms of income for capital investment from agriculture. Nothing should be done which starves agricultural credit for expansion.
There are existing structural difficulties in the field of agriculture as far as getting credit is concerned because industrial enterprises very often are formed into public companies and they can float shares on the stock market and get credit in that way. As they are companies there are specific regulations in regard to the publication of accounts. An investor knows that if he is giving credit to an industrial company this information will be available to him and he will be able to supervise, to some extent, how the money is being spent, whereas in the case of farming most farmers are individuals and not companies and there is not the requirement in regard to publication of accounts so that anybody who would want to invest money in the ACC does not know specifically how the money is being spent by individual farmers. This means there is a relative advantage in giving credit to an industrial company rather than direct to a farmer, or to a company like the ACC which specialises in giving credit to farmers. We should do everything possible to ensure that credit facilities provided nationally through the ACC are available to all farmers for a long period after we are members of the EEC. I hope my fears will prove to be unfounded.
I should like to quote briefly from a report which illustrates the great investment potential of Irish agriculture and the need to pump money into it now. This is a paper by Mr. Michael Walshe, agricultural adviser to the World Bank, formerly of Moore Park. I quote from the Irish Times of 1st December, 1971:
He said present production from our 11.8 million acres of farm land was disappointing. On 10.5 million acres of grassland we only carried 1.7 million cows, 200,000 heifers, 1.1 million beef cattle for sale and 2.8 million other cattle. If agriculture was financed and developed we could have 5 million cows, 1 million heifers, 0.9 million culled cows and 3.5 million beef cattle (10 cwt.) for sale.
This would amount to an output of £1,490 million a year, compared with present output of about £470 million (both adjusted to Common Market prices) which would mean an increase of £1,020 million.
The point is that if we were to invest this money we could get a huge return. We should ensure that farming is not starved of credit because that is the potential set out by a man who knows his job.
I should now like to speak on the subject of liquid milk prices. The bulk of milk producers in my constituency supply the Dublin liquid market rather than creameries. Increases have been announced in the Budget in creamery milk prices. There has been no announcement of an increase in the price paid to liquid milk producers. Why have these producers been left out while creamery producers are getting an increase? This matter should be considered. It may be that liquid milk producers did get an increase of late which the creamery men did not get. On May 1st liquid milk producers got an increase equivalent to 1.042p a gallon. I do not think there had been an increase for some time prior to that. That was to cover the increase in costs over a long period. The NFA have calculated that if you subtract the increase given in May from the increased costs, the net costs to liquid milk producers since January of this year have increased by 3½p per gallon. In other words their costs have gone up by 3½p per gallon since 1st January disregarding cost increases which took place prior to 1st January. Since January, feedingstuffs have increased in price by £3 a ton. This is equivalent, in relation to dairy rations, to an increase of 8 to 9 per cent. The cost of fertilisers has increased by 10 per cent from 1st July. Rates have gone up. Transport costs have gone up. ESB charges have gone up. I have quoted the figure of 15 per cent. Yet, the farmer has got only an increase of 1.042p per gallon. Increases should not be given solely to creamery milk producers. The liquid milk producer is in equal need of them. The liquid milk producer is not, generally speaking, an exporter but if a relative advantage is given to creamery milk producers there is a danger that farmers will go out of liquid milk production and change to creamery milk production, which might result in a scarcity of milk on the domestic market. I think there was a shortage of milk in October, even without the differential for creamery milk. It is quite possible that there would be a shortage of liquid milk due to farmers opting out of liquid milk production and going into creamery milk production if an equivalent increase to that given for creamery milk is not given to liquid milk producers. Such a shortage would not be to the advantage of anybody and the housewife, who is very sensitive to an increase in the price of liquid milk, would be the first to suffer.
There is a subsidy given to the small farmers for the installation of milk coolers but only creamery milk producers qualify. Liquid milk producers require cooling facilities because liquid milk has to travel a long distance from the farm to the market whereas, under the present unrationalised system of creameries, there is a fairly high concentration of creameries in the creamery milk belt. That does not apply in my district to the same extent as in the south of Ireland, where the scheme is of great importance and where there is a fairly high concentration of creameries. Therefore, the danger of a decline in quality due to lack of cooling is not as great in the creamery milk areas as in liquid milk areas. For the Dublin liquid milk area the only market point is Dublin but there are some people supplying Dublin with liquid milk from as far away as Gorey, Carnacross and Kells. These people do not have the cooling facilities necessary for milk to travel that long distance. The supplier in the creamery district may live next door to the creamery and he will get a grant for the installation of a cooling system. This is anomalous. I hope the Minister will consider giving grants to liquid milk producers for the installation of coolers. The liquid milk consumer, the housewife, is just as important as the person to whom we export butter and other dairy products and as much entitled to get good quality milk as the foreign buyer. All possible steps must be taken to maintain a high quality for the liquid milk market and for the Irish housewife. One would be to provide grants for cooling systems for liquid milk producers.
I want to comment on the secretive approach of the Department and their reluctance to tell the farmers the likely effect of accession to the Common Market on liquid milk producers. There are at an advanced stage draft regulations for a common policy for liquid milk before the Council of Ministers. These have been spelled out in great detail. Yet, when I asked the Minister to tell us how the liquid milk producer in this country would be affected by the adoption of these draft regulations, all he could tell me was:
The policy on liquid milk is one of the matters being discussed this week in Brussels in connection with negotiations on Ireland's entry to the EEC. The outcome of these negotiations will be indicated in the White Paper to be published on the subject of Ireland's accession to the European Community.
Not only was he not prepared to tell us the implications of the existing draft regulations, but he did not even promise to tell us what would be the result of his efforts to change the draft as soon as that would be available. All he would say was that he would tell us when the White Paper is published. Nobody is sure as to when the White Paper will be published. The time to tell the farmer is now so that his opinion can be mobilised to strengthen the Government's negotiating hand. It is no use in telling the farmer when it is too late.
I asked the Minister would he consider making this information available as soon as possible. I hope he will do so. The major implication will be in respect of butter fat content. I have discovered, without any help from the Minister, that this would be one of the major difficulties. I put down a question about this and the Minister said:
As the question is still under discussion I am not at present in a position to indicate the implications for Irish producers.
As far as I can interpret, without any help from the Minister, the position is that 3.5 per cent butter fat is the minimum requirement in the EEC. At present, the minimum legal requirement in this country is 3.3 per cent butter fat in liquid milk. This is, as far as I know, the present position. Also, as far as I know, the Agricultural Institute carried out surveys at certain periods, particularly in the months of January and February, when it is very difficult to produce milk, and they found that in some cases the butter fat content was lower than that 3.3 per cent. If our regulation 3.3 per cent is not rigorously enforced it will be all right but, as I say, the regulation in the EEC is 3.5 per cent and it is possible that that will be applied very rigorously. Farmers should be told about this. Liquid milk is paid for on a gallonage basis and not on a butter fat basis. If we join the EEC will it be paid for in the future on a butter fat basis? The Minister has not given us any information about this.
There is an enormous potential in beef production. The price of beef in the EEC has been very consistent. It is not a produce which runs into surpluses and, because of that, the price remains stable. We have very definite advantages here from the point of view of climate, soil and grass. The prospects are more favourable in the case of beef than they are in the case of milk. There has already been surplus milk production in the EEC and there is no reason to think that this may not occur again. We would be better off, I think, putting the emphasis on beef.
We have a very long grazing season as compared with EEC countries. We also produce more grass per acre and grass is a cheaper livestock feed than anything else. We can keep our cattle for a longer period on a much cheaper feed than can our continental competitors. They have a shorter grazing season and a harsher winter. We do not have to spend so much on overwintering. Fluctuations in price do not occur and the price is more or less the same in April as it is in November. We should be able to get a very good price for our beef in November. We have significant advantages and we should be able to benefit from these. It must be remembered, too, that prices are 50 per cent higher in the EEC.
Beef is an expanding market and we should aim at a growth rate of 500,000 head over the next four or five years. That should lead to an increase of something in the region of 50 per cent in cattle exports. It has been estimated by the Agricultural Institute that, in order to achieve this target, we would need a total investment in beef production of £20 million at farm level. About half of this can be provided by the farmer. If he gets a good price he will have money for investment purposes. The other half will have to be provided by way of credit facilities. The Government should expand credit facilities for beef production to enable this investment to be made now so that we will be ready to take advantage of the higher prices prevailing in the Common Market.
I would emphasise again that we will have to do everything we can to protect our credit facilities. If we increase our through-put by 500,000 head in the meat factories this would result in the creation of 700 new jobs in the meat processing industry. This is very important. We are prepared to spend £5 million on a smelter plant to create 400 jobs down in Cork. I am not sure if my figure here is correct. but I heard it was something like that. If we spent that £5 million on agriculture it might give a better return in jobs in the meat processing industry.
We cannot have beef animals in 1974 if the calves are not born now. There are a number of easily identifiable bottlenecks holding back expansion in the beef industry. A major one is the inadequate use of fertiliser. The 1967 survey showed that only 35 per cent of pasture gets any fertiliser every year. If we have to remove our fertiliser subsidy this figure could remain as it is or, quite possibly, decrease. If fertilisers are not used, we cannot get the maximum return in beef production. Another drawback is the fact there are not enough cattle to eat the grass and a great deal of grass goes to waste. A stocking rate of 1.75 head per acre gives a 60 per cent better liveweight gain per acre than a stocking rate of only one head per acre. This is a good argument for increasing our stocking rate. It is, of course, largely a matter for the farmer. However, if he is to have the stock to put on the land, we must produce the calves now and the Government will have to create an atmosphere of confidence which will lead to more calves being produced.
We will also have to examine our marketing outlets for beef. There is the danger that our beef may be at the mercy of a monopoly created by the retail outlets. British supermarkets are more and more coming under the control of a few big operators. These operators can tell our beef producers that they will not buy their produce unless they are prepared to sell at X price. A monopoly situation is developing in Britain and unless we have an equivalent monopoly in our supply position here, beef producers may be at the mercy of these large retail outlets.
There are two alternatives: we can either open up retail outlets in Britain for the sale of beef products there— I do not, however, think that is very feasible—or we can strengthen the CBF so that it can withhold supply if it feels it is not getting an adequate price, but we would probably run into difficulties with regard to EEC regulations in relation to monopolies in the agricultural marketing field. If that is the case, it is important we should get the EEC to ensure that no cartels or monopolies are created by the retail trade in Britain to our disadvantage. The same rules against monopoly marketing and selling should be applied to British supermarkets as are applied to the CBF.
We are not spending enough money marketing beef and lamb. CBF is limping along with £300,000 trying to promote beef and lamb exports, which probably make the biggest contribution to our balance of payments. At the same time, Córas Tráchtála is getting £1.5 million for the promotion of industrial exports which, while making an important contribution as far as exports are concerned, is far less than the relative contribution made by beef and lamb in terms of total production.
I believe some people are taking the CBF for a ride. There was a campaign for the sale of Irish beef and posters saying, "Great, great grass makes great, great beef" were distributed to butchers throughout Britain. A delegation went round Britain and in the few butchers' shops they visited, the posters were prominently displayed, but I heard from another source that the next day these posters were taken down. Most butchers took these posters but never used them properly and a great deal of attractive publicity material never saw the light of day.
There is no point in creating a brand name for a product until adequate supplies are available. A somewhat less glamorous activity, like the promotion of meat classification, proper packaging and effective transport to the markets would yield better returns than large expenditure on image creation. I believe the CBF should have statutory power to intervene and ensure that proper standards of packaging are maintained in meat factories so that the Irish product is worth promoting. Chilling regulations exist but they are not being enforced in meat factories as well as they should be.
It is important to have meat properly classified so that we can supply the consumer with exactly what he or she wants. The meat classification scheme may be too slow in coming into operation. It is proposed to run a pilot scheme first. How long will the pilot scheme be in operation before a comprehensive scheme is introduced? We should ensure there is no unnecessary delay.
On the group concerned with drawing up the scheme there were representatives from the trade and from the factories but there were no representatives from the producers who are, after all, the basic contributors to the beef industry. I hope adequate facilities will be made available to allow the producers to make their views known. The delay which will result from having to consult them at this stage would have been avoided if they had been consulted in the first place.
I understand the Department of Education has been approached on a number of occasions by the meat trade to provide a meat training school with slaughter line and various other facilities in order to teach people working in meat factories quality control, hygiene, safety, packaging and all the other skills necessary for the effective operation of a meat factory. There is a need to provide courses in vocational schools for people entering the meat trade because it is an important field of employment. The Department of Agriculture should tackle the Department of Education about such a scheme. The activities of AnCO should be extended to include the meat trade; at present they are not interested in it. If we are to produce the right product, skilled operatives are needed.
There is a need for refrigerated transport in the British market and indeed every market. The Danes have provided themselves with refrigerated transport in order to ensure that their bacon arrives on the British market in the right condition. We do not provide refrigerated transport and instead have to rely on the inadequate facilities provided by the British authorities. The CBF should consider providing this transport for the export of Irish meat. Shipping facilities to Birkenhead seem to be assured as a result of the activities of the consortium and private concerns. I hope we shall have assured shipping facilities to Britain, but I wonder if we shall have assured shipping facilities to the Continent when that market is opened up to us.
We must ensure we are producing the right sort of beef for the continental market. We must not produce beef required solely for the British market. We cannot continue to have all our eggs in one basket. The British want a product with a fairly high fat content, whereas continentals want lean meat. In Germany 65 per cent of the beef sold to the consumer is bull beef, 3 per cent are bullocks and the rest are female. Bull beef makes £18 a hundredweight, bullocks make £16 and £17 a hundredweight and heifers make less. This means that the type of meat we are producing at present will fetch less on the Continent. We should try to produce the meat which will get the highest price. There are many advantages in the field of bull beef production. The Government should introduce a policy to expand bull beef production here in order that we can take advantage of the continental market. The gains in terms of meat for food taken in are 12 per cent better from bull beef than from bullock beef; in other words that food into meat conversion is better in the case of bull beef than in the case of bullock beef. There is another reason for going into bull beef. The Minister admitted frankly to me that he had no plans for the development of bull beef production: he should have. He said that if any producer wanted to go into bull beef production he would get a licence but if this is the product field in which we have an advantage the Minister should be persuading people to get into bull beef production so that we would be able to serve the continental market with the sort of meat they want.
I already mentioned that it is unfortunate that we have a disadvantage under the differential in relation to the UK fat stock guarantee scheme: we should equalise the two rates of payment so that our meat factories would not be at a disadvantage relative to those in Britain or Northern Ireland. It is very important for us to develop a proper breeding policy. I understand that although the idea of performance testing for bulls in the AI service was first announced as Government policy in 1964 in the Second Programme for Economic Expansion they are only now getting around to building a station at Tully, County Kildare, so that performance testing may be undertaken. I put it to the Minister for Finance yesterday that this revealed a certain amount of delay on the part of the Government that they could not execute policy agreed in 1964 until 1972. He did not agree there was delay; I was somewhat surprised.
We need a much more rigorous system of progeny testing and we should reject bulls out of the AI service unless they can produce really top class progeny. The present selection procedure, only recently adopted, is that they will take one bull out of four and the three others not as good will be dropped. That selection procedure is not rigorous enough and I wonder if we could achieve a better selection ratio.
I should like to know what will happen to our US meat quota when we go into EEC. Will the relatively more attractive prices for meat in EEC mean that nobody will bother with the US meat market as it will be so much more profitable to export it to EEC? I understand at present people are only supplying the US market in order to preserve the quota and that it is more profitable to send the meat to Britain even at the present low prices there. What will happen when we are in the EEC, when we completely fail to fill our quota? This is something which should be considered.
Our research experts should take a very close look at the challenge of synthetic beef to Irish beef production. It has been estimated that over the next five years the use of beef substitutes made from various protein fibres and so on will increase at a rate of 200 to 300 per cent per annum. These, like margarine in relation to butter, will be synthetic substitutes for beef. We should try to ensure this development will not work to our disadvantage and that we can produce a product better in every respect than the synthetic competitor.
We have had a very dramatic fall in sheep production. It has been stated by the Committee on the Review of State Expenditure in relation to Agriculture that sheep production declined here over the last five or ten years largely because of State intervention. This took the form of the State giving more attractive grants to other lines of production. It was estimated in 1967 that to get £1 in price support from the Government you had to produce £19.3 worth of cattle, £19.8 worth of pigs, £3.7 worth of milk but to get a £1 worth of State support in relation to sheep in 1967 you had to produce £56.1 worth of sheep. Obviously, the financial disincentive existed to get people away from sheep and there is no use in the Government deploring that people are not producing sheep when they are not doing so because of the Government's policy of failing to give support to sheep on the same level as for other produce. This situation is being further aggravated at present because sheep prices are lower now even than last year and the recent encouraging trend of an increase in sheep numbers may, because of the collapse in the market this year, be reversed. There is a danger that because of price disadvantage and because of the relative improvement in competing products such as cattle and milk, people will be completely driven away from sheep. This will also be as a result of the fact that there is no common policy or common intervention prices for sheep in the Common Market whereas there is a common policy at present for beef, milk and other competing products.
If we want people to continue producing sheep we should now be agitating for the adoption of a common policy on sheep. There is great potential for sheep if we were in a position to avail of it because the self-sufficiency level in the extended Common Market for sheep is much lower than it is for other products. It is 56 per cent approximately for sheep production in the Community of ten whereas it is 80 per cent in beef production. The market is there but if we do not take action soon everybody will have gone out of sheep here and we shall not be able to take advantage of that market. The Minister said he was keeping in touch with developments in regard to the adoption of a common policy for sheep. I do not believe him because he reveals monumental ignorance of the subject in the House when in one week he is prepared to tell the House that when we enter EEC we would have free access to the French lamb market and in the following week he has to eat his words and say that because there was not a common policy we would not naturally have guaranteed access to the French market for lamb. Clearly, he was not keeping in touch with the matter if he could make such a fundamental mistake. I do not believe he is taking the steps he should be taking in regard to protecting the future of our sheep industry in EEC. I believe when we enter EEC the British will try damn hard to ensure that there is no common policy because it would keep the New Zealanders out and they will not want that.
I welcome, as does everybody on my side of the House, the fact that the multi-tier price system for milk is gone. At column 289 of the Official Report of 2nd December, 1970, I said:
The objective of Exchequer intervention in agricultural production should be primarily to increase efficiency and incomes. Any system of Exchequer support that discourages efficiency and expansion is hardly desirable.
That was the view I expressed last year in regard to the multi-tier price system.
I am glad this year the Minister has recognised that Fine Gael were correct in what they were advocating. It will be interesting to see how some of the Fianna Fáil backbenchers who spoke on last year's Estimate approach the change which the Minister has made. Deputy Hussey said last year at column 719, Volume 251, of the Official Report, of 9th February, 1971:
I favour an increase in the price of milk, provided it is fixed on a sliding scale.
Will he eat his words this year when there is an increase in the price of milk which is not provided on a sliding scale? Deputy Smith said, at column 890:
Deputy Keating described the twotier price of milk as a wicked scheme and Deputy Bruton advocated its total abolition. People who advocate the paying of subsidies at a flat rate must think we are living in some kind of paradise where money grows on trees. If we had unlimited resources we could consider paying a flat rate subsidy.
I am glad to note that the Minister and the Government now have unlimited resources, according to Deputy Smith. I shall be interested to hear what those two Deputies have to say about the initiative taken by the Minister this year in response to Fine Gael and Labour prodding. I wish to quote from an article in the Irish Times of Thursday, 2nd December, 1971:
One of the big dangers of the new system is that the incentive to produce quality milk is "watered down" somewhat. Up to now farmers whose milk passed the quality test got an extra 1p per gallon. This now goes and it is up to the individual creameries to carry on testing and the incentive if they so wish.
In other words, the State itself is no longer providing an incentive to quality milk. It was generally recognised that the scheme which the State was operating was very effective in leading to quality milk. I hope its withdrawal of the scheme will not result in the quality falling off.
The prices which have been given for creamery milk are long overdue. Deputy Donal Creed, the Fine Gael spokesman, was told by the Minister in response to a question on 11th February, 1971, that the price of milk in 1967 was 11.3p per gallon, whereas in 1970, three years later, it was only 11.5p per gallon, an increase of .2p over three years. Therefore, if we are getting substantial increases now, it is only to catch up on the backlog which the Government have allowed to develop. There is no point in saying now what a wonderful thing it is that the backlog has been partially done away with. Again it is too little and too late.
There is something to be said for paying for milk, not only on a butter fat content basis but also on a protein content basis. The protein content is very important in cheese production. From a nutritional point of view there is increased recognition of protein as a most valuable constituent of milk. I should like to quote from an article by T. C. A. McGann and J. A. O'Connell in the Farm and Food Research bulletin for March/April 1971:
At present, payment in the liquid milk industry (i.e. for human consumption) is on a gallonage consideration only, whereas in the manufacturing sector (85 per cent of total), payment is on a butter-fat basis. In the future, it is desirable that protein will be taken into account in payment for both liquid and manufacturing milk because of its primary significance in human nutrition and in the yield and quality of dairy products...
That is something the Government should consider as a matter of urgency. They should ensure that, if the EEC are not already paying on a protein basis, they will do so.
In regard to grain, the price of feeding barley is well below the price at present being paid in the EEC.
There is a feeling abroad that we are at a competitive disadvantage in regard to corn. We should not feel this. The average yields of grain per acre in Ireland are higher than the average yields of grain in any of the EEC countries. That is something we should consider before we write off the future of grain production in the EEC. It has been estimated also that from our existing grassland area, we could double our output of cattle without eating into any of the existing tillage areas. It is quite possible, therefore, that it is not undesirable to promote grain production.
In regard to horticulture, this is an industry of some significance in the eastern part of my constituency of Meath. The greatest need of all here is for a proper marketing system for horticulture. There is the danger that people are being encouraged, willy nilly, to produce particular soft fruits on an unco-ordinated basis without proper assessment being made in advance of the likely needs of the market for a particular soft fruit. There should be a proper marketing system so that information could be fed back to the producer and to the official who is advising him so as to ensure that we produce the right quantities of the various soft fruits and that there is not a glut in one product and scarcity in others.
Concern has been expressed by my colleague, Deputy Tully, in regard to the prospects for the soft fruit industry in the EEC. I think he is right to express those reservations at this stage. However, he may be slightly pessimistic, in that soft fruits are relatively perishable commodities, and as we are comparatively far away from the centre of the EEC, it is possible that our soft fruit producers will at least be able to retain their home market without significant danger from continental competition. The people should be told quite clearly the prospects in regard to this very important industry. There is a lack of information from the Department in this field and, in the absence of such information, people fear the worst.
Another important question in regard to the soft fruit industry is that of transport. As I have said, these are highly perishable products. They come on the market in large quantities at a particular time. Therefore, transport should be available to take them to their destination quickly. I have advocated in this House that the freedom extended to haulage of cattle and sheep should also be extended in respect of soft fruit, and that no stone should be left unturned to provide transport for this commodity to the market. Therefore, we should allow unlicensed hauliers to transport soft fruits. I asked the Minister recently what steps he is taking to improve the price for pears and apples within the EEC and he said:
Pending this country's accession to the EEC, there are no steps I can take to influence the price available within the EEC for apples and pears.
I suppose, in strictly legal terms, he is correct but I think at least he should make his views known and the views of the Irish apple and pear producers known. He should let the EEC know that we will not be satisfied with the prices which are offered there at the moment. He should at least express an opinion on this matter. He may not like taking that step but he should tell the EEC what he thinks of their price structure.
I asked the Minister to set up some sort of marketing or promotional body for the horticultural industry and he said that the matter was at present under consideration. This appears to me to be a step backwards because in the document entitled "Main activities of the Department of Agriculture in 1970" this was stated:
Consideration is being given following discussions with the interests concerned to the establishment of some suitable type of promotional body for the horticultural industry.
Apparently we have not initiated further discussions on this matter although discussions had apparently taken place when that statement was made. What has happened? Why the delay?
Farm education should be available not only to old and young farmers but to agricultural workers as well. It is very important to realise the role which an agricultural worker can play in the industry. More and more he is required to have detailed knowledge of machinery and to take management decisions in his employment. It is important that he be trained to take those decisions and in that context I welcome the initiative taken by the County Dublin Committee of Agriculture in initiating a course for agricultural workers specifically. I hope this will be extended to the rest of the country and that it will have the encouragement of the Department.
We will also be required in the EEC by the proposals of the structural reform, if they are adopted, to provide what is deemed socio-economic advice to farmers. The Minister told me that the provision of this socio-economic advice would require no change in our present system of higher education which prepares our advisers to advise people on this question. The Minister may be unduly optimistic because these proposals for socio-economic advice are spelled out in some detail in the structural reform proposals. I understand there are proposals there for the establishment of farm centres to provide training for the people who will provide this advice. The Minister may find it necessary to make some more fundamental changes in our system of agricultural education in order to provide this socio-economic advice that he apparently is prepared for at the moment.
In relation to the system of county committees of agriculture I will make only one point because I do not propose to deal in great detail with the system. It is very important that autonomy is retained for the bodies which are concerned with the provision of advice and with the other facilities which are at present available through the county committee system, that there will continue to be a guaranteed and substantial representation for people who have been elected by the people, namely, members of local authorities on those bodies. It is also important that there is in future a guaranteed minimum representation on those bodies for the farming organisations.
I should like to support the point made by Deputy Collins about the motion to annul the Agricultural Produce (Fresh Meat) Act, 1930, and Exporter's Licence Fees Regulations, 1964 and the Pigs and Bacon Act, 1935 (No. 3 Regulation), 1964. Those regulations contain a levy on the trade in beef and bacon. The purpose of this levy was not to provide funds for the Government but to provide money to be used directly to finance a research institute for meat. This has not occurred. On the 11th December, 1963 the then Minister for Agriculture stated:
No revenue will accrue to the State by reason of the increased fees produced and my Department will pay over to the trade's own research institute an amount equivalent to the proceeds of the increase in the fees plus additional contributions made by the State.
In a speech in Seanad Éireann on the 18th December, 1963 he stated:
I should like to make it clear that no extra revenue will accure to the State from the proposed increase in the fees.
These levies have been in operation since 1963. The money, initially, was put in a suspense account but since that it has all apparently been put into general purposes and has been spent by the State. The revenue has accrued to the State but the research institute which it was agreed should be set up for the financing of which the levy was introduced has not been established. The House deserves an explanation because what the House was told by Deputy Smith, who was then the Minister for Agriculture, has not transpired. The House supported these draft regulations on the assumption that this research institute would be set up. Therefore, Deputy E. Collins is to be congratulated on recognising this issue and putting down a motion to annul those regulations so that the matter can be discussed. It is unfortunate that specific time has not been provided to discuss this important issue and that, in fact, it is being lost in the maze of points being made in a very wide-ranging Agricultural Estimate.
I hope the importance of this question will be recognised by the media and that the Minister will give a satisfactory answer and will ensure that this money is made available for the financing of a research institute in meat. It should be clear, from all I have been saying about the meat trade, that research is vitally necessary to enable us to take the proper investment decisions for the future.
