I want to mention references by Deputy O'Donnell and possibly one or two other Deputies to the effect that the nature of the agricultural research being carried out by An Foras Talúntais was of a too academic and esoteric kind and not sufficiently in line with the practical needs of farming generally. I want to say straight away that I do not accept this viewpoint at all. In fact, I can think of several instances of the institute's work being adopted. One that occurs to me especially, apart from machinery research carried out by the institute in Carlow and the recommendations that are made by the institute to farmers, directly and indirectly, through their advisory services——
Committee on Finance. - Vote 37: Agriculture (Resumed).
Debate resumed on the following motion:
That the Vote be referred back for reconsideration.
—(Deputy Creed.)
I am sorry to interrupt the Minister but we are finding it very difficult to hear him.
I am sorry. I will speak a little louder.
A good idea
We were talking about the type of research that is carried out by the institute and the criticism of this made during the course of the debate. I have personal experience of and have seen the results of the work of An Foras Talúntais applied in practice on farms in my own constituency and throughout the country generally. The instances that I was citing were the frequent recourse of farmers in the matter of advice. I know personally about this in respect of farm machinery, the application of farm machinery, its suitability for use in given conditions, the research that the institute have done in the matter of animal housing and animal breeding. All these things are of a highly practical kind. I do not accept the contention that the nature of the research carried out by An Foras Talúntais is too academic and too airy fairy. I think the institute have their feet firmly on the ground and one of the reasons for this is the fact that the board of the institute itself and the programmes that they carry out are subject to the scrutiny of practical farmers and agricultural advisers and special evaluation panels drawn from farming, business, the universities and departmental circles. I think the criticism levelled at the institute is hardly justified.
Deputy Bruton spoke about the Small Farm Incentive Bonus Scheme and suggested that something should be done to get more people into the scheme. As I announced when introducing the Estimate, the total bonus grant available under the scheme will be increased to £500 for new participants accepted from 1st January next. This is a very substantial increase and it should act as a very strong incentive to enterprising small farmers to participate in the scheme. It is noticeable that some counties have been accepting the scheme and have latched on to it far more readily than others. I hope the advisory staffs in all counties will see that the increase in the grant now gives them a fresh opportunity to sell the advantages of the scheme to more and more farmers.
I should think also that the terms of the scheme, which have been more or less unchanged since 1968, need to be reviewed, and we are doing that in conjunction with the change in the grant, with the objective of bringing the scheme up to date. It has been demonstrated pretty satisfactorily that it is a very worthwhile scheme. Deputies generally, and quite properly, were concerned to see that as many smaller farmers as possible should be made viable and should be enabled to extract the maximum value from their farms and this is one obvious way in which it can be done.
The £700 gross margin figure, which is a central feature, is not by any means as restrictive as it might appear to be on the surface. It is calculated by reference to standards based on the years 1965 to 1967. Because prices have changed so much since then, it is equivalent now to £1,000 or more.
There should be a quorum. There is not a Fianna Fáil man in the House to listen to a reply on the most important Estimate that could be discussed.
Notice taken that 20 Members were not present; House counted and 20 Members being present,
May I point out that there are two Committees of this House—the Committee on Procedure and Privileges and the Public Accounts Committee—about to meet now?
At 4.30?
They are about to meet now—at 4.15.
It will not take 20 minutes.
If the Deputies do not want the committees to function, that is all right but they are two very important committees.
There are 144 Deputies in the House.
The Deputies over there have more to learn from the Minister's concluding speech than we have.
I was here; the Deputy was not.
Order, order.
Now that they are all seated comfortably——
We are not standing idly by, like the Minister.
Mulcahy will fix the Deputy. The Deputy did not answer his challenge.
When the building goes up the Deputy will get his answer. Does he want me to answer the other ones? I will answer them, even about what a garda said about the Minister's car and about the gardaí getting instructions to close their eyes. It has all been proved and they cannot deny it.
Let us have some order and allow the Minister to conclude.
Deputy L'Estrange to conclude.
It is like Wanderly Wagon. I was discussing the small farm incentive scheme and was about to say that the requirements of the scheme in the matter of bookkeeping are not very great. Deputy Enright spoke very rightly of the necessity to encourage farmers to keep accounts. The accounts that are required of farmers under the scheme are an integral part of it and are set to operate to the farmer's advantage. Deputy McLaughlin said small farmers who took part in the incentive scheme and thereby increased their incomes should not be deprived of unemployment assistance. The annual amount in the west is calculated for unemployment benefit purposes on the rateable valuation of holdings and therefore increased income arising from the scheme does not affect farmers' eligibility for unemployment assistance.
Deputies referred to the question of capital and of credit for agriculture. The arrangements for the extension of credit facilities which I announced in my opening statement should meet all demands for credit. We keep in close contact with the ACC and they assure us that the increased facilities will meet fully all requirements for this financial year.
The ACC expect considerably larger demands on their resources next year. At present we are discussing with them how these will be financed. The Government envisage substantial extra requirements for investment in modernisation and expansion and credit for this purpose for approved projects will be available from the ACC. Apart from the ACC and local credit sources, the commercial banks play a major part in providing credit. The possible needs of farmers are reviewed jointly by the commercial banks and the Central Bank. On the matter of lending, commercial agencies must naturally, in the last analysis, have regard to the credit worthiness of the borrower and for the schemes he puts up. In general, preference is given to borrowing for productive purposes and this includes efficient agricultural production and marketing.
With better markets and better grassland projects, the volume of investment in agriculture has been rising steadily. As I have already said, it is running at the rate of £60 million a year. With our price and incentive policies, we have been steering this investment principally into well-balanced production of livestock and milk. Everybody knows the potential for great expansion is there. This was evident as the debate proceeded. After many years of under-exploitation, resulting from international marketing conditions which made the development of our grassland much more of a chancy proposition because we could not then look forward to an escape from the closely controlled cheap food market with which we had to be content at that time, the rate of investment will accelerate as we approach EEC entry and in the next few years farmers themselves, operating as the businessmen they are, for profit, will invest a lot of their own money which should be coming in increasing volume from the markets as well as finance from normal credit sources. This, of course, will require from the Government well-selected guidance and support policies which will be provided in the future as they have been in the past.
Reverting for a moment to our priorities here, we are all aware of the pro-positions underlined by the Scully Report and others that there is need to direct support to the area where it is needed most, that is to the small holding that is capable of being made into an economic holding that will guarantee a decent living to its occupier. Because of the rather peculiar structure of our rural population, with a high age average and a high rate of celibacy, rearrangement may be on a different basis in the future. It should be possible to devise a scheme that will enable vigorous, enterprising young men to stay on the land.
I should like to deal with a few particular points raised by individual Deputies. I think I detected in Deputy Creed's speech a note of anxiety about pig co-operatives. I understand him to refer to the large fattening units that have been growing throughout the country in recent times. I am not a bit afraid of this development. I think that when it is based on a true co-operative basis, this is the best and most economic way for the smaller farmers to derive a profit from their pigs.
Deputy Murphy expressed the same kind of anxiety—I have heard him refer to this type of enterprise as "the big combines". There may be one or two very large operators who have experimented in pig production on a large factory basis, but I think that the experience in Britain and elsewhere, where the really big operators in other lines of business, people from industry have decided to embark on large pig projects, is that they have run into pitfalls which were unexpected. I was talking to people whose business it is to do research into these matters in Great Britain recently and I gather that the optimum number, and probably the maximum practical number, of sows that can be kept without serious risk of disease would run from 40 to 60. Once you get over the 40 number, your risk of disease rises in a geometric progression.
I was not referring to the co-operatives made up of the small farming community, and this argument with regard to sows is not a valid argument because you can have different units of sows up to ten or 20 in numbers. What I was referring to was fattening co-ops in which millers and professional people were involved.
I am sorry I misunderstood the Deputy, but he will accept that there is this anxiety about any large project for the fattening of pigs from the bonham stage, the eight weeks stage upwards. I do not share this anxiety when it is controlled by the farmers themselves, from co-operatives.
Nor do I.
I accept that. I see, on the contrary this as the best method by which the smaller sow owners can get the best possible profit from their small projects, and I think, speaking as a countryman and a farmer, that people should aim at a minimum of ten sows, but one thing which insures the smaller producer against possible investment by people outside agriculture in this business to whom Deputy Creed has referred is that the disease problem becomes unmanageable, once you start rising to the 40 sows size. In fact, I learned somewhat to my relief that it is not such an attractive proposition for the really big non-farming operator to squeeze out the small man as it might seem to be on the face of it.
Deputy Murphy in the course of a rather long contribution to this debate, spoke of pigs as a valuable sideline. This may be so in the case of some farmers, possibly of medium size, whose main operation would be a dairy one, or possibly tillage—pigs can then possibly be a profitable sideline— but I would imagine that in the future people ought not to view the production of pigs, whether the keeping of breeding stock or their fattening, as a sideline but as a main enterprise. I submit this as a personal opinion. I have seen it in action in a pig co-operative in my constituency where the the target was a minimum of ten sows per farm, and I have seen it provide very satisfactory results for the participants who bred the pigs and brought them to the weaner stage whereupon they moved into the central fattening station and partook of the profits they derived from that. It is a question of deriving the optimum use of the feed input, of having the best environmental control over the animals in the course of their fattening.
Deputy Treacy expressed anxiety about the possibility of redundancies in the event of creamery mergers, what has come to be called the rationalisation of the creamery industry. The odd thing about it is—and I have seen this again in practice—that especially in the position in which we will be in the future, in a situation where the gallonage and throughput will be rising fairly dramatically, as I would expect and hope, the possibility of redundancies in federated or amalgamated creameries is remote enough, and in the case I am referring to, of which I have personal knowledge, it was practically nil. I know that it is a matter of some anxiety to workers in the creamery industry and a matter which, I know, is considered with great care by co-operatives who are contemplating mergers, but as I say, we can look forward with confidence to an expanding dairy industry and therefore you can contain your existing labour force with a rapidly increasing efficiency of operation and throughput of material.
Deputy Treacy was under a misapprehension, it would appear from what he said, that butter is not subsidised in the home market. Of course it is, and this is contained in the support which butter gets in the home market in the price support given to milk producers, which results in a quite considerable support for the home consumer, and it is worth while noting that the recent increase of 2½p in the price of the pound of butter to the retail customer did not produce any reaction at all. In fact, the housewives' association expressed their understanding of the necessity there was for the producer getting his just reward in the face of rising costs, especially since the price of butter did not increase since 1966.
Deputy Cowen devoted a considerable amount of his speech to the importance of agricultural education, to which I have already referred. We all agree, I am sure, that it is certain that if the young men coming into farming in the future — my sons and the sons of other farmers—have not got the type of specialised agricultural training which is provided in the existing agricultural schools, which are, I am happy to say, being expanded and I look forward to them expanding still further, their chances of success in farming will be very seriously threatened. This rather casual approach to rural life and farming generally will not suffice in future. The young men in the industry in the future will need to be well-trained and to have a good knowledge of accountancy, elementary physics, chemistry and biology. They will not need to have Ph.Ds in any of these subjects but a basic knowledge of them will be of vital importance.
Co-operative group farming was mentioned. This is one of Deputy O'Donnell's pet subjects. Some people think that the Irish cannot co-operate. Deputy Cooney said that we are be devilled to some extent by our history. We must jettison some of our fears which developed during the long fight for the possession of the land itself. We who grew up on the land and live by farming know the problems. There must be some change from this total independence of farmers, especially on the part of farmers with small acreage. There must be a pooling of resources. Anyone contemplating the formation of working groups must realise that such groups could not be too well-informed. Certain recognised patterns of co-operation should be worked out in advance before any scheme is actually put into operation.
People refer to the numbers of tractors and the quantities of farm machinery in use. There is no real deficiency. There is enough machinery in the country but it is being under-used. Tractors and other machinery are so expensive nowadays that it is necessary for people to extract the maximum use from them.
Deputy Cooney referred also to the need for the control of pollution from farm buildings. We have all seen examples of this in recent times. I have asked my Department to examine this particular problem in view of the rapid establishment of silage pit throughout the country. Water supplies have been contaminated and fish in our rivers have been destroyed by the effluent produced by silage pits. The farmers in this House are well aware of the dangers. We must admit that we have been rather careless in the siting of our silage pits and the provision of adequate methods for the collection and disposal of the effluent from the silage. This effluent is very dangerous to fish-life and water supplies. Special attention must be paid to this point. Means of controlling effluent will have to be introduced in any scheme forwarded to the Department for approval.
Deputy Cooney referred to the mortality rates among livestock. As a result of the progress we have been making in one area we have animal mortality. I refer to bloat. Bloat occurs most frequently on well-managed pasture, especially pasture which has been fertilised by nitrogenous fertilisers in the early part of the year. Expert stockmanship is not exercised and it is possible to have three, four or five valuable cattle affected overnight by bloat. Mortality among sheep, especially mountain sheep, from vermin and predatory animals and malnutrition is higher than it ought to be. The lambing percentages of mountain flocks are not satisfactory. We are considering means by which these particular problems can be tackled. Most good stockmen know how to control bloat, stomach worms and liver fluke. The dissemination of knowledge about these diseases and the action to be taken are under review.
Deputy T.J. Fitzpatrick (Cavan) said that enough was not being done about marketing. Deputy O. J. Flanagan dealt with this subject at some length last night. Deputy O. J. Flanagan complained that our dairy products were not being pushed as rigorously as they might be. He spoke of a trader in Jackson Heights, New York, who had a big exhibition of Irish products which everybody wanted to buy and of our failure in connection with marketing on that occasion. There was not a follow-up to what the Deputy referred to as “this breakthrough”. It is not fair to criticise Bord Bainne who have done an excellent job, especially in the British market. The rapid rise in the eyes of the British consumer of the Kerrygold brand of goods—both cheese and butters—is obvious to all. In latter years there has been an improvement in the marketing of butter and particularly in the market of lactic butter in the north of England. The problem is not acute. The problem now is to produce sufficient goods.
Deputy T.J. Fitzpatrick (Cavan) referred to the “stop-go” policy in regard to milk. We have already dealt with that subject. In the last few years Bord Bainne found themselves obliged to sell butter and other products at disastrously low prices and it was therefore necessary to apply some restraint to the conversion of milk into butter and to divert production to beef. It was quite an achievement in the very difficult marketing conditions to maintain the rapid rise in the size of our national herds of cattle all that time. He said the farmers in Cavan were disappointed about the recent increase in the price of milk. I find it very difficult to understand this because I believe that some creameries in that area are talking about paying their suppliers 17p per gallon in the coming season. This is a very substantial increase on the rate that has been paid up till now.
Could I ask the Minister what will happen to the liquid milk producers in the Dublin area?
And in Cork?
I shall come to that. Deputy Hogan wondered if there was a danger that we would sell off our breeding stock. This danger is diminishing because as market returns in the last couple of weeks have shown, already farmers are evincing a very acute anticipation of the increasing value of heifers and springers, and the price of that kind of animals has risen dramatically in the last couple of weeks.
I assume Deputy Clinton's question is related to the situation that now arises as a result of the new pricing arrangement for creamery milk. I have already mentioned the special factors which necessitated those arrangements. Other factors, however, enter into the question of prices payable to liquid milk producers, and we have these under consideration at the present time.
As regards the scheme of grants for milk coolers, this was introduced specifically to assist small scale creamery suppliers to improve the quality of their milk. In the case of producers for liquid sale, however, the cost involved in maintaining high quality standards required by law are taken into account in the price they receive. As I say, the reaction of the new arrangements for creamery milk on liquid milk are being examined by the Department. I think I have dealt with most of the main points raised.
Maybe I was not present when the Minister referred to it, but he was to reply in detail to the question as to whether or not there was a loss to the small milk producer as a result of the new prices. I understand there is a loss of ½p a gallon to those producing under 10,000 gallons because of the quality bonus——
I dealt with that at some length.
I am sorry if the Minister did. I was at a meeting.
This is nonsense. The total average increase in the coming year will be in the region of 2p, but in any case, even in the worst operated creamery there will be an increase of 1p.
But the quality bonus of 1p has gone completely.
Yes, but it is incorporated in the new price in addition to the new penny.
The Minister refers to the "average". Is it not true that those under 10,000 gallons will be at a loss of ½p a gallon in a 12-month period?
In what way?
As the quality bonus is applied all round, they do not get the same amount of increase as the others do.
The quality bonus is included in everyone's price.
I know, but they do not get the same increase as those who were not getting the extra amount, who were supplying a bigger quantity of milk and were not qualifying for the amount for which those under 10,000 were qualifying.
Any departure from the tier system of payment necessitates that the 1.3 per cent over 30,000 gallons would proportionately get more for that quantity of their milk over 30,000 gallons than they had been getting. Any creamery supplier, however, will get the full increase of 1p as well as the benefit of the reduction in the Bord Bainne levy, which is about 0.5p. As well as the 1p, he will get the benefit of the inclusion in his price of the quality bonus which henceforth will be operated by the individual creameries which he is supplying. The creameries themselves will operate the quality bonus, presumably on a price differential basis. Presumably it will pay them better now to pay a premium price for quality milk.
Then the suggestion that a producer of 100,000 gallons per year will get an extra £2,600 while the producer of 10,000 gallons loses £50 a year on the change, is not correct?
Who loses £50?
The man who is producing 10,000 gallons per year claims to be losing £50 as a result of the change.
That is not the case.
All right. I am mentioning it because these are the figures I got.
Would the Minister say if the farmer delivering 10,000 gallons and under will get an increase of the amount announced in his Estimate over and above what he was already getting per gallon?
Yes, and, as I said, the average——
No, not the average. That is the confusing part of it.
There is no fixed price for milk.
Therefore, he can lose.
As I said at the beginning and at the end of this debate, the price paid, even now by a well organised, integrated creamery operation can be and is appreciably higher than that for the cross-roads job. This is why I am so anxious that the small and relatively uneconomic creameries should get together. The sooner they integrate the better for their own suppliers.
The Minister is wishing for the moon.
To deal with Deputy Tully's point that somebody somehow is going to get less for his milk as a result of the recent changes, there is simply no foundation at all for that story.
I hope the Minister is right.
Having said that, I think I have dealt with most of the points raised by Deputies. It only remains for me to hope that they will have a happy Christmas and remember that butter is the cream.
The Minister said he dealt at length with all the points raised. The most important point which I have not heard him deal with is the availability or non-availability of credit as far as the farming community are concerned. I heard him say that we could look forward to an expanding dairying industry but until such time as credit is made available the industry cannot expand. Furthermore, and much more important in my opinion, we cannot make the necessary preparations which we should be making at this stage for our entry into the EEC because credit is not available. Farming organisations, the Agricultural Institute and other people who are very close to the grass roots in agriculture are demanding that as much as £1,000 million credit should be made available to the farming community.
The Deputy must realise that even if there were £1,000 million available, which as somebody said is a hefty sum, this would not accelerate in any way the gestation period of a cow or a sheep. The objective that we must aim at is the retention of as many breeding cattle as we can. This cannot be done merely by subsidising the purchase of such cattle across the board. The result that you would get form that kind of operation would be merely the inflation of the price of such cattle but it would not make them any more numerous. As far as the availability of credit to farmers is concerned I am assured by the ACC that the two increases of capital they have received for loans to farmers will be sufficient to meet the demand that will be made on them in the coming year.
Absolutely untrue.
I am speaking from memory now but I think the amount available to the ACC last April was about £6½ million and it is now £13 million. I do not think any worthwhile project put up by an individual farmer or an agricultural undertaking to the ACC will be turned down for lack of capital.
As far as the ACC are concerned I want to assure the Minister that I have seen a number of cases that in my opinion would be well worthy of a loan which have been refused by the corporation because the people asking for the loan were already in debt for some small amount. The Agricultural Credit Corporation are the greatest people in the world to give loans to people who do not want them but the people who are in need of a loan to increase their cow numbers or modernise their farmyards find that the credit is not available to them, that they cannot get it. This has done more damage to the farming community than anything else.
The Deputy must appreciate that the last determinant in this is the creditworthiness of the man and the project he has. I do not share the Deputy's apprehension that a good man with a good scheme, if he approaches the ACC, will not get credit.
He will get it provided he is not already in debt.
If he is in debt there must be some reason for it. If he is creditworthy he will get the credit. The Deputy knows as well as I do that there is the type of person who will try for a loan from the ACC but he may not be competent enough.
He may not have any clearly defined project to put before the ACC and say: "This is a scheme I worked out with my agricultural adviser. I want £5,000 to put it into operation."
I am talking about a case where there is a planned project put up by the agricultural instructor in the area and submitted to the ACC but it has been refused because the applicant was already in debt for a small amount. The agricultural instructor drew up the plans but the credit was refused.
I am not aware that this is a general problem.
I could tell the Minister of half a dozen such cases.
I thought the Minister was to deal with the subject matter of Deputy Collins's motion.
That motion was withdrawn on an understanding being given.
On the Order of Business a week or two ago, after a conversation I had with Deputy Collins, I undertook that negotiations would be set up between the people whose interest Deputy Collins represented and the Department of Agriculture and Fisheries to see if some commonly acceptable way out of the situation could be found. That is now in hand and I understood that Deputy Collins had accepted that.
Motion to refer back, by leave, withdrawn.
Vote put and agreed to.