A Cheann Comhairle, on Friday last I had been speaking for four or five minutes on a number of points arising out of the negotiations relating to sugar beet when progress was reported.
I want to deal now with a number of matters relating to the Estimate in general. I should like to compliment Deputy Bruton on a very comprehensive contribution which was both interesting and informative. The Minister's speech contained a number of matters which were of considerable interest to the House and a number of facts which have to be analysed in terms of the policy implications.
Now that the prospect of our entry into the EEC looms very large we seem, in a rather perverse way, to be expressing tremendous hope and optimism about the effect it will have on agriculture generally and while the impact in many areas will be immense we are still failing to accept the tremendous imbalance which already exists in the economy. In the post-war period agriculture suffered as a result of a lack of overall planning of the economy. Very little has been done to overcome our dependence on the UK market which has never offered adequate returns to our suppliers. The acknowledged advantages which exist have not been used to the optimum extent in agriculture because of a failure on the part of the Government down through the years to create a comprehensive marketing system. As one who comes from an urban environment but whose family are very much of a rural background I feel that agricultural policy and industrial policy have been developed on an independent basis to an excessive degree. No attempt has been made in my opinion to build up an integrated rural economy. The Department of Agriculture and Fisheries—and this is highlighted in the Devlin Report—has operated an independent sovereign Department.
The Government have failed to implement a progressive land policy. I am always amused to hear people talk about the way the EEC land policy will affect this country. We have had half a century in which to create a national policy relating to land structure. If radical changes had been brought in the rural poverty and social decay which were allowed to develop in the thirties, forties and fifties and which began to be mitigated again in the sixties, would have ended. We now have an opportunity to do something about it although this opportunity has arisen more as a result of an erosion in the population than from any dynamic policy.
The basic fault of successive Fianna Fáil administrations—it is the job of the Opposition to be critical although not critical in an unduly destructive manner—is that they have treated the agricultural industry as a kind of agricultural reserve for which national policies would be determined at Budget time. There has been too little appreciation of the economic potential of agriculture, particularly in the food processing industries. There has been no real attempt at national agricultural planning in recent times. Even though I disagree vehemently with many of his political attitudes, Deputy Blaney seems to have come to grips with agricultural problems. The publication, "Irish Agriculture and Fisheries in the EEC " written by Deputy Blaney and published in April, 1970, will go down as a monument to him.
The publication of James Deeny, The Irish Worker, highlights the problem in no uncertain terms. He pointed out and I quote:
The demographic analysis of the human resources of the agricultural labour force shows that there are four main social problems, all inter-dependent and all threatening not only the industry but the structure, economy and much of the way of life of the country as a whole. All four problems are fast approaching the critical level.
They are:
—the depopulation of young adults from rural areas,
—the ageing of those engaged in agriculture,
—the amazing celibacy rates and,
—the distribution of land.
He went on to say, and I very much agree with him:
There is an urgent need for a comprehensive review of agricultural policy. Hitherto agricultural policy has been framed in terms of production targets without very explicit reference to the serious social problems of this sector of the economy. The effects of existing agricultural policy on the social structure must be recognised and social objectives must be defined and pursued in new agricultural plans. A review of our present ideas is needed, a review involving the formulation of a series of national objectives in agriculture with a social as well as a production orientation, the organisation of sound programmes to achieve these clear and defined objectives and the energy, dynamism and leadership to attain them.
There was a time, I suppose, when this would have formed a very fine statement of intention at a Fianna Fáil Ard-Fheis. I shall not demean the work of Deeny by such an association. Without being unduly congratulatory of the Labour Party, I think it is directly in line with our policy document which stressed the social nature of the agricultural problems in Ireland today. We cannot face up to the enormity of this issue without reference to some of the statements we made in that document which was the subject of a great deal of vilification by the Fianna Fáil Government at the crossroads at church gates in the last general election but those who made a more thoughtful effort to read it and who were not concerned with party political propaganda realised that it was a serious effort—it has been and is being updated—to get to grips with some of the major problems. We said in that document that deep problems in agriculture would be solved only within the framework of an overall national policy of planned social and economic development.
It is startling to read the chapters of Deeny's publication and see where he says, on page 26, that during the five years from 1961 to 1966 47,667 persons left agricultural employment, a fall of 13.8 per cent in the agricultural labour force, or to read on page 27 that 61 per cent of the 177,452 male farmers were over 50 years of age; 14 per cent were over 70; 55 per cent of all farmers with more than 50 acres of land were over 50 years of age and that 10 per cent of all such farmers were over 70 years of age. I do not think the House, the Government or the Department fully realise how startling these figures are. I speak of the Department collectively and I think the senior executives of the Department are more than aware of the problems but so much has the Department suffered from what one might describe as one-party rule that most of that staff decide to keep their opinions to themselves never knowing who will be the next Minister for Agriculture and Fisheries.
Deeny also in his publication said that there is considerable under-employment among agricultural labourers. I shall quote only a few more sentences. He said that in 1966 61 per cent of all male farmers were over 50 years of age and 14 per cent over 70; only 989 of the 23,000 female farmers were under 40 years of age—quite a startling figure; 23,173 female farmers and only 1,000 under 40 years of age. That is something we should consider.
Earlier I referred to the amazing celibacy rates of the agricultural community and if you look at the data in this publication you see what I mean. On page 33 under the heading "Marital status" he says that in 1966, 33 per cent of all farmers were single; 27 per cent of all farmers with farms of more than 50 acres were single; 93 per cent of all farmers' sons who remained on the land were unmarried—again certainly startling. He said that 94 per cent of farmers' brothers and 74 per cent of other male relatives assisting on farms were unmarried; 95 per cent of labourers living in and 61 per cent of labourers living out were single and of the 110,000 married male farmers 64 per cent were over 50 years of age.
I am taking the figures he derived from the 1966 census of population; I do not believe the 1971 census data when available will show any massive changes in that regard so intractable in many ways are the problems and so slow is remedial action. One wonders at the complacency of the Government in their apparent belief that all you need is to have, in a Common Market situation, substantial major price increases—which undoubtedly will be there in a number of cases—and automatically, by holding such a carrot before the eyes of Irish farmers, there will be a major change and development in social attitudes and that agriculture will be transformed. I fear the difficulty is much under-estimated and the problem is one that this House has never seriously attempted to get to grips with because agriculture has been very much the political plaything of a small number of politicians and most of their attempts to play with it have not been constructive or inspiring. I think that is generally a fair comment. I think Deeny's work deserves mention here but I do not propose to make further reference to it beyond quoting very briefly his comment on our system of agriculture and land distribution. On page 36 he stated:
In addition our system of agriculture and land distribution in family farms or separate holdings precludes ranching on the one hand or collective or State farming on the other. The possibility of developing new systems so that more young people can own land and produce effectively has not had sufficient chance, support or action and the social consequences of further rural depopulation do not seem to have been considered sufficiently.
The publication speaks for itself and while it is not written from a party political or from a destructive viewpoint, it carries a message for the makers of agricultural policy. In case one is accused of bias one might also refer to some of what I consider is the invaluable work done by E.A. Attwood and the issues he has thrown up. I often feel that writing in the language of the Department one must couch major serious issues in a departmental-cum-political jargon which may often seem to gloss over some of the major issues but in one of his recent contributions to the paper he prepared on "The Structure of Irish Agriculture and its Future Development" he pointed out the seriousness of the general situation.
He stated:
The holdings with less than 300 man-days employment per year, which accounted for 69 per cent of the total number of holdings over one acre, produced 29 per cent of the gross agricultural product, received 32.2 per cent of the family farm income and accounted for 53.8 per cent of the total employment in agriculture.
Later on he stated:
The 30,000 holdings with over 600 man-days accounted for only 10.5 per cent of all holdings over one acre, but produced 41.5 per cent of the gross agricultural output, received 36.9 per cent of the family farm income and accounted for 20.6 per cent of total employment. ... Thus, the estimated 110,000 labour units on non-viable farms represented some 115,000 people, while the viable and potentially viable farms provided employment for 190,000 people.
These figures are startling. I am not interested in the methodology of the concept of man-days and so on. I leave that to the academics because I am not competent to appreciate fully the implications involved, but I am prepared to say that the criticisms that have been made are quite serious. I would urge Deputies to read the paper and consider how we can evolve our agricultural policy in the light of the facts disclosed. These facts are known to the Minister but, no doubt, they will not appear in the Government's White Paper on the EEC.
If I might make a final quote from the paper to which I referred, it is stated that in 1966 there were 23,000 female farmers, nearly half of them being over 65 years of age; nearly 44,000 male farmers over 65 years of age; over 45,000 male farmers under 65 years of age on holdings of less than 30 acres, making a total of 112,250 people. If we allow for those people on holdings of "under one acre and area not stated", the total in the non-viable category is 112,570 and those in the viable category 88,050. In that context I do not think we need send for Mansholt—we have a Mansholt-sized problem to deal with in our country and we will need to get to grips with the situation. Our policy in doing so might not be very popular in many areas but we will be forced to think about these problems, irrespective of whether we enter the EEC.
The Minister has been unduly complacent in his analysis of the contribution of agriculture to the economy. It would be remiss of me not to refer to a major criticism made of the role of agriculture in the Third Programme. Recently, John O'Hagan, Lecturer in Economics in TCD, made a correct and critical analysis of the agricultural targets of the Government—allegedly still current in the Third Programme.
In the summer issue of Studies he made a critical appraisal of the Government publication “Review of 1970 and Outlook for 1971”. He pointed out clearly why performance is not matching expectations and he stated that agriculture is the most glaring failure in relation to the programme. He also stated:
Net output actually declined, despite the fact that gross output increased by 2 per cent. If the export target had been reached (8.3 per cent as against an actual increase of 5.2 per cent), the gross output increase would have been greater but even this would not have ensured any increase in net output. The reason is that an increase in the proportion of inputs is required to produce an increase in output. In fact, one might expect the reverse, namely, increasing or at least constant economies of scale. Perhaps by proportion is meant price, but it is unlikely that the review would let slip this opportunity for putting further blame on the inflationary tendencies in the private sector.
The reason for this increase, and thus for the poor performance of agriculture, lies squarely in the continuation of inefficient farming in Ireland. This could be altered by a radical change in the Government's agricultural policy along the lines of Mansholt's proposals. The continuation of present policy could possibly be justified, were it not for the fact that agricultural employment has also fared so badly, and that the gap within agricultural incomes is as wide as ever. In every programme so far, agriculture has been a dismal failure. Either the targets are set too high for political reasons, or else there is an explanation for the failures or—as appears to be the case—there is a combination of both.
This comment is not unduly harsh. In a period of major economic expansion in the sixties, when the Government had a relative buoyancy in taxation returns, they had an opportunity of making a major breakthrough in the agricultural sector. They did not grasp the problems which faced them in the past decade and they are now relying on EEC entry to get them off the hook in some areas. These are some of the major criticisms the Labour Party make of Government policy.
Some Members of the House may think I have been carping unduly about this aspect but we must not forget that three programmes have been produced by the Government. Many reports on agriculture have been compiled but they are never referred to in this House. The report of the committee on the review of State expenditure in relation to agriculture, was buried promptly by the Government. The Minister wrote a foreword thanking the members of the committee who compiled the report, in particular people such as Dr. O'Connor from the ESRI, Dr. E.A. Attwood, then a member of the staff of An Foras Talúntais, and Dr. Martin O'Donoghue, Lecturer in Economics—now Economic Adviser to the Taoiseach—but I doubt very much if the Government considered seriously the implications of the report.
This report is of major national importance. It was published about 18 months ago but it was not taken seriously by the Government and no attempt has been made to get to grips with the problems outlined in it. The report stated:
While the need to make agriculture as competitive as possible by reducing costs per unit of output is recognised, a major part of State expenditure in relation to agriculture is designed to provide some degree of stability in returns to producers. To this end, a measure of price support has been maintained for milk, pigs and wheat directly, and for barley, oats, sugar beet through restriction of imports to support guaranteed or contract prices. Price support was introduced for carcase beef in 1965 and for carcase lamb in 1966; a system of indirect price support for store cattle and sheep is maintained through their eligibility for British guaranteed prices.
The report sets out the position as it finds it earlier on and then says:
An examination of the value of these schemes is complicated by the fact that the whole system has a social as well as an economic objecttive. No clear distinction between the two has been worked out at any time but it is evident that there is a degree of conflict between schemes which have the laudable purpose of appropriately redistributing national wealth. Broadly, schemes or projects to enable farmers to work their lands "fully and efficiently" and to increase productivity could be regarded as having an economic basis and as being the agricultural parallel of the adaptation grants system for industry. The measures operated to maintain or improve farm incomes, such as guaranteed or supported prices, have a primarily social connotation.
Again, there is an explanation in relation to the matter. On page 14, having listed the various headings concerned primarily with what they regard as the more expensive items of direct aid to farmers it says:
On this basis, the total amount is still very considerable, and the points with which we are immediately concerned are (a) is it necessary to spend all this money on aid to farmers? (b) is the State (meaning the taxpayer) getting the best value for the expenditure? and (c) should the pattern of expenditure be substantially altered?
These are three questions which have never been seriously considered by the Government at this stage.
At page 18, it says:
It is insufficiently appreciated that the improvement in global farm incomes which has taken place over the last eight years has been predominantly due to the increase in State aid rather than to the increases in the quantity or market value of what was produced, after allowing for the extra expenses involved.
Then it makes another cryptic comment, but in fairness to the Minister and the House, I do not think I should unduly refer to it, but I would refer to the comments contained in the chapter—"Criteria for State Expenditure in relation to Agriculture"—and particularly paragraph 4.4 where it is stated:
It is necessary to establish criteria by which the existing pattern of State expenditure can be evaluated.
Then it states the various criteria, and, of course, this was read with a shock of political horror by the politicians and they decided that the best thing to do was to publish it and be damned and be forgotten in that setting.
Reading this report and reading the statements of successive Ministers of Fianna Fáil, one can only come to the conclusion to which this report comes at page 57, Chapter 7, paragraph 7.1:
We have come to the conclusion that there is a very substantial case for some major changes in the way in which these objectives should be pursued. This conclusion in no way invalidates the objectives themselves, but the gradual development of a large number of different forms of expenditure has created a complex pattern of State aid to agriculture in which the relationship between the expenditure and the purpose it is intended to achieve is by no means as clear as it should be. The reasons for expecting a substantial amount of aid to be a continuing feature of economic and budgetary policy for many years to come have already been set out. In the light of this continued need for assistance, the ad hoc nature of some scheme of State aid to agriculture needs to be re-examined.
I think that the implication of that has not been fully considered by the Minister, or, indeed, by the Government, if, indeed, there is any serious attempt at Cabinet level to get to grips with the problems posed by this report, which, I believe, is the express purpose of Cabinet meetings, rather than the current preoccupation which I gather is very far removed from that kind of political exercise.
There are other sections of the report, the attractive section 7.36 which makes a recommendation relating to the abolition of rates on land, a recommendation that all agricultural land now rated should be subject to a flat land tax—all innovations of a startling nature which certainly should be the subject of intense Government consideration but this is just an example of what, in effect, has not been done. I, therefore, with regret feel in relation to the Minister's speech in which he moved a sum of almost £73 million an analysis which included almost £36 million for price support as he said himself, which included £22 million for agricultural production and development aids, which included £4 million for livestock improvement and disease eradication and another £7 million for agricultural education research and advisory services—I do not think that when we talk in the millions of pounds involved, it is inappropriate to talk about some of the work done in analysing the total effectiveness of the entire Exchequer provision in relation to agriculture, now running as the Minister indicated, around £105 million in the current financial year— this House has not to its credit attempted to analyse the economic cost benefit returns from that expenditure.
I feel that one could also consider, for example, the paper recently read by Mr. O'Connor to the Statistical and Social Inquiry Society of Ireland on the analysis of recent policies for beef and milk. It was read in Dublin in January, 1970, almost two years ago. I think it will be seen from his cryptic comments and brilliant analysis of many areas, particularly in relation to milk prices, and certainly one might even say the regional imbalances which policy has created throughout the country, that that kind of criticism, and the associated papers and the work done by Mr. O'Connor, Mr. Attwood and so on, have been very serious. Certainly the kind of political decisions of the Minister, namely, the changes in milk prices which we have now had announced are welcome. A farmer said to me: "I suppose if it was not for the referendum we would never have got it"; "I suppose that is true," I said, "That is part of the March campaign," and he agreed. I got the impression that he was not terribly impressed by this kind of expensive fiddling which, while welcome, does not develop the kind of confidence in the agricultural sector which we want to see emerging in the years ahead.
As regards the EEC negotiations on agriculture referred to by the Minister, I have a number of comments to make. I feel that there is a need for the Minister and his Department in particular to consider the impact of dumping and the use of Article 91 of the Treaty.
On the Order Paper today Deputy Donnellan had questions down to the Minister for Finance asking the total acreage of potatoes grown under contract for the Erin Foods factory at Tuam, the total number of applicants for contracts to supply potatoes to the Erin Foods plant at Tuam, and the future prospects for that plant. When one becomes aware of the glut on the American market which is, in fact, exporting vigorously into Europe, and when one becomes aware that the Germans are exporting into Britain and that the French have started dehydrating, and when one becomes aware of the serious difficulty facing Cadbury-Schweppes on the British side, one can see that the dumping problem can have serious implications for this country.
As we know, complaints will be investigated by the Commission and we will be allowed to use our national legislation in urgent cases, subject to post factum approval by the Commission. I would stress this to the Minister in relation to some of our agricultural products and, of course, it applies only to the transitional period; after 1977 no provision against dumping will be permitted. If the Government's application goes through, presumably we will be in a single market. The Government believe that as a result of the explanations and information given to them by the Community the possibility of effective action against such practices will be available.
I have serious doubts that the explanations and information given to the Department by the Community will allay many of the fears which arise in relation to agricultural dumping. I do not think that kind of information is adequate. I have very strong views about the way in which the Department were involved in the EEC negotiations. I am not quite sure what kind of an empire the Minister for Foreign Affairs is building. One is never quite sure what he is up to. I am not sure at times that he is quite certain himself.
I get the impression that the agricultural negotiators who are in Brussels are not in the tremendously complex areas of product by product negotiations. They are dealing on the opposite side with men of intense specialisation, competence and information. I feel that agriculture has been dragged in sideways by the Department of Foreign Affairs. The Minister does not seem to be involved in the negotiations. With due respect to him I think that his predecessors, who were strong-minded men, by this stage would have "done their thing" in a very big way. They would have insisted on being very directly and very intimately involved in the negotiations.
If one takes the question of dumping alone one can see that major problems are facing us. One can express legitimate concern to the Minister. He has been very optimistic about future prices and prospects for our main farming products. I would be entirely dishonest if I did not say that I accept a good deal of what the Minister said. For the most part reasonably responsible statements relating to agricultural prospects have been made, that is, in relation to a number of our main farming products.
Unfortunately, it looks as if entry into the EEC will be a kind of party political tussle when it should really be a question of the net balance of advantages and disadvantages facing the country. That should be the real political issue. We should be considering to what extent we can offset the advantages facing a sector of agriculture against very real disadvantages in certain areas for industry and the other major issues involved such as prices and the increase inflation in the economy.
The Minister made the point that there will be a good demand for beef in the enlarged Community and that Irish farmers can be reasonably assured of a developing market for their cattle, provided they have the capacity to undertake this expansion with which I shall deal later on. We must bear in mind the price for fat cattle which the EEC set out to maintain. At present it is about 50 per cent above the average Irish market price. This will mean that coming towards the end of the transitional period in 1978 an Irish farmer, because of membership, will get over £50 more for a top class ten cwt. animal. This is not disputable on the basis of available information. I would be entirely dishonest if I did not accept that implication.
I cannot say that I have been enormously enamoured by the document produced by the Department of Foreign Affairs EEC information service, any more than Deputy Keating was last week. These documents could be best produced and issued at Departmental level rather than making a general allocation of some £34,000 to the Department of Foreign Affairs to spend on material of this nature, I presume, in the hope of convincing Irish farmers of the benefits they will get. While these statements are correct generally in the document prepared at Foreign Affairs level, nevertheless a good deal more could have been done in its presentation, in stating the facts and giving information, for example, on the policy on the sale of land. There is no reference to that in the document. We could have had a much better statement from the Minister or the Department.
The Minister holds out considerable prospects for milk. I would be shot out of the homes of my relations in north Cork if I went down there and said I rejected the statement by the Minister. One must accept that no longer will our exports be tied down to fixed quotas, and no longer will our dairy exports have to be subsidised at considerable cost to the taxpayer. With free entry into an enlarged market, the prospects for milk have been stated with considerable accuracy by the Government. It is a question of the net balance of advantage, taking the other disadvantages into account, that on the basis of the terms negotiated by the Minister for Foreign Affairs and in relation to agriculture, apart from the correct reluctance on the part of the Minister to concede anything on the animal health field, I gather that very little else has been negotiated by him on the agricultural front. Certainly, I support the Minister on facing up to the real problems involved in the negotiations on animal and plant health. We should not yield at all in these negotiations towards accepting the Commission's viewpoint because to do so would pose, in the long term, severe eradication and disease control problems for this country.
The Minister has rightly rejected an attempt by the Commission to have us accept their current proposals. Therefore, on a number of fronts, on the general fronts of beef, in terms of milk, in terms of sheep and lamb production, in terms possibly of the bacon industry, our prospects are reasonably good. Nevertheless, we are faced with a very serious problem in relation to marketing. The Minister has stressed and rightly so that the markets will be highly competitive and discriminatory. At present our farm produce is sold to a British market of about 50 million people, a market where food prices are kept at a rather low level.
While we will have higher prices available to us, with the tremendous emphasis on free competition within the Common Market and with the great emphasis on free trade and the guaranteed high prices for agricultural goods, the competition will be extremely keen, not merely on the question of prices which seems to be an obsession with Fianna Fáil, but increased sales will have to be won by the quality of the agricultural goods exported and by our capacity to meet consumer needs. The continental housewife in deciding what she will buy, will determine virtually what we will produce. There is a real failure on the part of the Government to make Irish farmers aware of the fact that the markets within the Community will be highly competitive and most discriminatory, that production and processing must be geared to these market requirements and that that will be a principal criterion, that technological inputs will be of extreme importance, that unless capital is available we will not have extra production and that the organisational structure in this country must be changed substantially.
All of this will require transformation of existing attitudes in Irish agriculture. In other words, if Irish agriculture is to benefit from the higher prices that are available within the EEC, the industry will have to be transformed in terms of productive capacity and marketing techniques. Perhaps the Government have no wish to frighten some of the farmers with the implication of what is involved but this particular lack of awareness is notable throughout the country. Products going from this country will have to be practically tailormade to suit the very precise consumer needs and preferences within the Community. I have pointed out that product quality characteristics must be very carefully controlled at all levels, at production, processing and sale levels.
Another problem that has been stressed very strongly and stressed in particular by Dr. Tom Walsh concerns free trade and I quote from a comprehensive paper of his on the subject in which he says:
Another problem on which I find lack of awareness is that with free trade within the EEC we may see some food products from outside competing on our markets. It will not be all one-way traffic. Free trade will give free rein to the doctrine of comparative advantage. We are all aware of market developments elsewhere; the self-service store, the supermarkets and the major integrated multiples in the food field. We will be competing in a market where there will be considerable change in demand as a result of increasing affluence, where ringing the changes on the product against the background of inelasticity in demand is a major marketing weapon. Marketing techniques must be developed to bear on the consumer so that our traditional products of high quality are acceptable.
I do not think that he is under any illusion as to the gearing of production and marketing methods to meet the new situation within the EEC. This particular paper read by Dr. Walsh, in Waterford, must have had a very sobering effect on the professional personnel who were present and must have ensured that the requirements in production and processing will be geared systematically to meet market requirements. He pointed out that:
At farm level, there will be an increasing need to operate farming systems specifically developed from research findings to meet market demands. These systems will be intensive, capital-demanding and specialised. They will need to be efficient with strict attention to the inputs required and to productivity. They will make new demands on resources of land, labour and capital. To meet these requirements we have, as has already been clearly shown, relatively limited land resources— about one-third of our total land area. Processing also will increase in importance as the housewife demands more convenience, readyto-serve foods. Our capacity for product and process innovation will be especially important.
I endorse every word spoken by Dr. Walsh in that particular statement. Further, Dr. Walsh continued:
There will be a growing tendency to specialisation of function also, although this may not come immediately. This will result in a reduction in the number of components in the production process on farms. Some components will be transferred from the farmer to other farmers and to others outside farming. Farmers will buy more of their inputs from other farmers and from the non-farm sector. It has been estimated that 30 per cent of 1967 Dutch farm production was harvested with equipment from outside the farm where the crops were produced. The days of the traditional mixed farm with a wide variety of enterprises are numbered. Farm employees will also become much more specialised.
I endorse his comment in that regard. He said:
Intense competition based on high quality goods will place increasing emphasis on technological development in the food sector. Innovation and technological development in this sector is already high with new and improved food products arriving on supermarket shelves every day. This is very evident in the US. The position is similar in Europe where the housewife is perhaps even more selective in terms of food quality.
May I suggest, therefore, that any farmer who thinks, or any politician who is advising farmers that there is an automatic bonanza in terms of current production, marketing and technological techniques is in for a rather rude awakening because in agriculture the price and the pricing policy is not the major criterion.
One other aspect he referred to was the evidence available on the organisational structure of the sector. He pointed out in this paper:
Marketing oriented firms have bought established production facilities in order to control them and to serve consumer needs better. A process of integration is occurring where every stage of production from the supply of raw materials to sale to consumers is under unitary control. Vertical integration is under way. This process has been particularly evident in the food industry. Food manufacturing firms have bought their way into the retail business. In some cases they have also control of the supply of raw materials to their factories. Some retail firms have established their own manufacturing arm. By extensive advertising these have substantially increased their share of the market and their profits. This process of integration of the whole food industry could leave the individual farmer in a weak position due to his lack of bargaining power.
The manifestation of this development is quite evident in some areas of the Irish food processing industry which is at present getting a terrible dose of salt in some sectors. That trend is something which the Government will have to take major care of to make sure that one does not find oneself, even with massively increased prices in the EEC for some products, out on a limb. His strictures are of major consequence. As the position stands today the majority of Irish food manufacturers and of Irish workers are too small to carry on an effective marketing programme in the EEC. Indeed, changes in the present structure of the marketing agencies of An Bord Bainne, the Pigs and Bacon Commission and others are necessary and should take place. We must have an integrated marketing programme for Irish food products which will demand very considerable discipline not only on the part of Irish politicians but on the part of Irish farmers in the production of high quality products. These are areas which are of serious concern to members of the Labour Party and areas in which the Government have not been very active.
One of the areas where more intensive efforts should have been made by the Government is the area of the co-operative movement within agriculture. For the marketing of Irish agricultural products in the EEC and for proper integration of production and marketing the most effective way is through the co-operative movement. I do not think the co-operative movement has received the maximum support from the Government or from the Fianna Fáil Party down through the years. Rather has it been allowed to develop in its own ad hoc way. Much more intense co-operation will be required within the Common Market.
At farm level, in servicing and processing, packaging and merchandising and in the direct sale of agricultural produce and the development of ancillary enterprises which should provide increased employment there is ample room for tremendous expansion of the co-operative movement. There is very real evidence available to us of the collective expertise and ability of many managers and people in the co-operative movement who could provide a further expansion of co-operative effort within the climate of higher prices. I think that the climate within the Common Market, if it is to be anything, will at least be a bit more favourable for the expansion of the co-operative movement. This House should now undertake, and the Minister should make a very special effort to give, extra assistance to the IAOS. It should be given further particular assistance in its planning, co-ordinating and general developmental services for Irish agriculture. The Minister should make a special effort to help the IAOS in this field.
These are my views on some of the aspects facing the country in relation to the EEC. In an agricultural debate I do not think one need be as pessimistic as some people might be. Many of the projections that have been made have been reasonably optimistic. My principal concern is that such is the age structure, such is the innate reluctance of so many Irish farmers to increased production unless they are absolutely on a "dead cert", that the projections of increased production may not come about even with the increased prices for a number of products. It is with that reservation that I should like to welcome, for instance, the very considerable work done recently and the paper presented to the Irish Agricultural Economic Society on 22nd October by fellow Corkman, Dr. Denis Lucey of UCC and Dr. T. Josling of the London School of Economics. This is a very interesting paper on the market for agricultural goods in an enlarged European Community. In their paper the word "phenomenal" appears in terms of some of the projections made. At the end of page 16 they speak about a phenomenal Irish increase in exports of beef and dairy products. That is the kind of projection made in a very comprehensive paper. I do not understand the methodology of the projections made.
Certainly, I accept in good faith, and with some understanding, the levels of output of major farm commodities which they project right up to 1980, assuming EEC enlargement and assuming no great change in the common agricultural policy. These projections and the excellent work done by Dr. Lucey and Dr. T. Josling are most welcome. One has difficulty in following the analysis of the effects of membership by Raymond Crotty, for example, for entirely different reasons. With due respect to Raymond Crotty, I tend to have greater faith in the assumptions made by Dr. Lucey and Dr. Josling and by many other Irish academics and their projections for the main products up to 1980. However, in strict fairness to the Raymond Crotty approach, I would enter one reservation which I would ask the House to take into account. There are a number of disquieting features about this common agricultural policy of the EEC. Virtually all of our assumptions in relation to price support and the future of Irish agriculture are based on the fundamental assumption that there will be no change in the common agricultural policy. I am afraid that there are so many disquieting features about the common agricultural policy of the EEC as to suggest that there may well be changes in future and that these changes may not be to the benefit of the Irish agricultural community. This is one of the major reservations of the Labour Party in this debate.
There is the considerable failure of many persons engaged in agricultural production to appreciate that the long term EEC food price policy does not look inherently very strong. One must also appreciate that it is rather inefficient in administration and that it is most likely to diminish in long term benefit to farmers and that in the short term it will certainly lead to substantial increases in domestic food prices.
It is interesting to read some of the British criticisms of the common agricultural policy and also some of the worldwide criticisms. It is impossible to read these criticisms and not to appreciate that even with the presence of the four applicant countries in the council chamber and the Council of Ministers, such is the universal international hostility towards the common agricultural policy that there may well be substantial changes in the years ahead. We have not yet had a White Paper here. I gather that they are grinding away in the Department of Finance trying to quantify some of the figures. It looks as if we will have nothing until the middle of January. However, the British White Paper says, in paragraph 81:
Under the common agricultural policy the level of market prices for the main agricultural commodities is maintained in two ways. The price of imports is kept up to a minimum or threshold price by means of variable import levies; and the internal market is supported at an intervention price, slightly below the threshold price, at which any surpluses are bought by the Communities agricultural fund.
What that paragraph means, in plain man's language, is that consumers pay high prices for EEC farm produce in order to guarantee farmers' living standards and that imports of the same food from cheaper markets abroad are taxed up to the point where the consumer has no advantage. Instead of an agricultural support system which both guarantees farmers' incomes and allows the import of cheap food, such as has existed in Britain for the past 20 years, the common agricultural policy controls imports, using machinery which is almost identical with that of the Corn Laws which Britain abolished a century ago. This alleged error is compounded by support buying, which means that if, despite the exclusion of imports, the market price still falls below that fixed as necessary for EEC farmers, then the Commission resorts to creating an artificial scarcity to bring the price up again by purchasing excess produce on the market. It is not so long ago since a huge butter mountain was built up in France and West Germany— butter which the housewives of the Six could not buy because it was so expensive.
At briefing sessions in Brussels when the intricacies of the common agricultural policy were explained to us, we were not enormously impressed and did not find ourselves looking forward to a situation in the 1980s where we in this country would be defending the basic criteria of the common agricultural policy because no one outside the Common Market—not one single agricultural economist—and precious few within it, had anything complimentary to say about the common agricultural policy. One of the most vociferous critics of it is Senator Hubert Humphrey who recently made a special visit to Britain to speak on this matter and put the case most succinctly. I quote:
"... the common agricultural policy has become a major disruptive force in world agricultural markets. Its workings have gone far beyond the original objective. The import-levy system that the Common Market has introduced is much worse than import quotas because they make imports a matter of residual supply...
The EEC is thus operating a farm-support system at a phenomenally high cost which does not benefit in any significant way the small farmer it is supposed to help... Surely it is within the realms of possibility to find the means for assisting the income of small farmers without providing windfall gains for large farmers and without forcing consumers to pay more than they need for their daily fare.
Indeed, the Senator was extremely critical and the British have been extremely concerned about the overall effect of the common agricultural policy. By no means can it be said that it is likely that in future the common agricultural policy will be maintained to the degree to which it now exists, with all its force and all its benefits to the Irish farmer in the interim period. The common agricultural policy is in for major changes when it becomes evident within the EEC that it requires considerable adaptation.
I would now make the point in relation to the EEC that, such is the complacency of the Government, it is only very slowly trickling out in our national newspapers and in other sources that there will be problems for Irish agriculture. Those problems are very, very slowly coming to light. Jim Norton, who was complimented by Deputy Keating, and I would like to add my voice in compliment too, had this to say last Saturday in the farming supplement to the Irish Independent after spending six days in Italy. He wrote what can only be described as a disturbing report. He asked several pertinent questions:
Can our existing cattle trade survive under EEC conditions? Have Irish farmers got anything like enough information about what is going to happen to agriculture— particularly to the livestock trade— when we go into Europe?
What about the live trade in cattle to the UK? What about our meat factories? What about the livestock marts?
What can we do to stop the situation developing where we would be powerless to prevent an organised invasion by Italian buyers coming to Irish marts to buy our young calves at prices which our Irish dairy farmers would consider "out of this world"?
Could the average Irish farmer, big or small, compete with the Italians who are now ploughing Europe for calves, and paying anything from £65 to £80 apiece for them at a week to ten-days-old? Could our feeders compete with the Italian buyers willing to pay up to £120 or £130 for a well-done six to eight-months-old single-suckled calf?
If this happens what then will our carcase meat factories do for their raw material?
Has any serious thought been given by the Government, the Departments of Finance and Agriculture or any of our big bank groups to how the finance is going to be made available to allow farmers willing to gamble on buying young stock against the well-heeled Italian buyers?
If this question has been considered, then it is a well-kept secret.
In view of the exceptionally high prices which dry cows are making in Europe—up to £16 per cwt. is fairly common in Italy, double what they bring at home—is there any hope for the much-publicised and very valuable boneless beef trade which was worth £16.5 million last year?
Spokesmen for our carcase meat trade have said that even under EEC conditions a major part of the trade would remain with the UK. This however is always presupposing that they would be able to buy in competition with Continental buyers.
The argument can be put forward that it is cheaper to transport meat than live cattle and that because of this, the factory man will always have the edge on the live exporter or the foreign buyer. This, of course, overlooks the fact that the continental meat man wants his carcases presented and put in a manner completely different to what the UK trade wants.
He makes the comment:
The big danger as I see it from my talks with Continental meat men is that our negotiations for EEC entry are being carried out by senior officials in the Civil Service who are far removed from the realities of the live cattle trade or carcase meat trade.
The big drawback appears to me to be not so much that the people are getting too much information as Dr. Hillery said recently, but that they are not getting enough. If mistakes are made by the failure of the negotiators to contact trade interests, the price is going to be paid by the thousands of Irish farmers who won't be able to buy young stock to replace those sold. As a result they could find themselves forced to sell land and get jobs in industry, perhaps not at home either.
The questions asked by Jim Norton should be answered. They have not been answered in the White Paper, Irish Agriculture and Fisheries in the EEC, and one looks in vain for any serious consideration by the Government of the capital investment factor in the development of Irish agriculture within the EEC. There is a reference to State aids and to the financing of the common agricultural policy. This is related to the capital investment programme. There is very considerable concern at agricultural level for the future because of the problems facing the industry and the country in relation to investment if we are to face up to the problems that will confront us in the EEC.
I want now to bring to the attention of the House a very interesting interview with Mr. Maher in the Federation of Irish Industries Economic Review in October last. Mr. Maher said:
What is good for the farmer is good for the community in general and, apart from the fact that the farmer and his family are one of the basic units of society, making up directly 20 to 30 per cent of the total population, indirectly he is responsible for providing work and employment for 60 out of 100 persons at work in the State as a result of activity generated from farms.
He went on to make a special plea, a plea which I endorse, a plea which Mr. Maher referred to in his Press conference yesterday, that there is special need for a complete transformation of the agricultural policy of the Government in relation to the EEC.
I do not want to cause any undue alarm but I would strongly urge the Government and their advisers to consider, for example, the scale of investment indicated in a recent lecture given by Mr. Michael J. Walshe, the agricultural adviser to the World Bank, one of the most brilliant men who ever worked in this field. He maintains that Irish agriculture is being starved of finance and investment. He says an investment of £1,000 million is needed to enable the agricultural industry to develop to its full potential. That is the statement he made to the Irish Grassland and Animal Production Association in Dublin a few weeks ago. He suggested that investment in agriculture next year was unlikely to exceed £10 million to £15 million compared with £95 million in industry. He made projections showing the need for a major investment programme in agriculture on a national basis. I might stress that that plea by Mr. Walshe was strongly endorsed by the NFA yesterday. They have suggested, and I strongly support their view, that the Government should provide £200 million over the next five years to finance an annual 10 per cent expansion of sheep, cattle and milk production. They also suggested that the investment of £40 million a year to capitalise this expansion would increase milk output and cattle output through a 500,000 head increase in cow numbers. I support this plea for substantial improvements in the investment policies of the Government in relation to cattle and milk production in the years ahead.
I believe that the policy in relation to education, research, et cetera, is inadequate. I am very conscious of what must be done. What must be done was stated specifically by Dr. Tom Walsh the director of An Foras Talúntais. He delivered a 40 to 50 page paper at the annual congress of the Agricultural Science Association in Waterford last September in which he made a series of recommendations on the radical changes which must be introduced by the Government in relation to the whole system of agricultural advisory services in the field of education, research and development.
I support the recommendations made by Paddy Jennings, President of the Irish Agricultural Advisers' Association in today's Irish Times. I would urge the Government to have an immediate and close look at the deficiencies in our advisory services and the deficiencies in our system of agricultural training. There is no body such as AnCO for the agricultural industry and there is no cooperative college. I would strongly urge the Government to consider major improvements in this area and bring them in as a matter of urgency because otherwise our farmers will face the EEC ignorant of the full implications of what the EEC holds for the agricultural industry in general and the public at large. I commend the changes I have outlined to the Government.
