asked the Minister for Industry and Commerce if he will make a statement on the proposed increase in the price of fertilisers.
Ceisteanna — Questions. Oral Answers. - Fertiliser and Coal Prices.
5.
A system of price monitoring and surveillance for fertilisers was introduced from January, 1974, on the recommendation of the National Prices Commission and was endorsed, with modifications, by the Fertiliser Prices Advisory Body in their report of July, 1976. This system requires, inter alia, that the three manufacturers, Nítrigin Éireann Teoranta, Goulding Chemicals Limited and Albatros Fertilisers Limited, should give me 21 days' notice of price increases arising from internal costs, other than raw materials costs. No advance notification is required in the case of price increases arising from raw material costs.
In accordance with these arrangements, NET notified me on 1st November, 1976, of proposed price increases averaging 13.8 per cent. I understand that NET have so far implemented this increase only to the extent of an increase of £10.27 per metric tonne on calcium ammonium nitrate 27½ per cent. On 3rd December, 1976, Goulding Chemicals Limited notified me of proposed price increases averaging 8.1 per cent and on 6th December, 1976, Albatros Fertilisers Limited notified me of proposed price increases averaging 7.08 per cent. These increases have since been implemented. The price increases were necessary to compensate the firms for increased costs under the headings of materials, wages and overheads.
I should mention that during the months of September and October, 1976, there were temporary reductions, averaging about 4 per cent, in the prices of fertilisers by the three firms mentioned.
Will the Parliamentary Secretary agree that increasing the price of fertilisers at this time of year directly hits the small farmers since most of the large farmers can purchase their requirements at discounts early in the year? It seems strange that in December last we should have had an Estimate where there was a saving of £800,000 due to the fall off in the use of fertilisers and now we have farmers paying £30 a ton extra for a popular brand. Is that not a ridiculous situation?
I agree that an increase at this stage does pose problems for farmers. It is very desirable that land should be fertilised and that fertility should be maintained in both the long and the short term. I think we can be reasonably satisfied that any increases are only those absolutely necessary. As a result of the fall off in the use of fertilisers there is, as the Deputy is aware, very keen competition and I believe that competition will result in increases being kept to an absolute minimum.
6.
asked the Minister for Industry and Commerce the information that was available to him as to the stock of fertiliser and coal in the premises of wholesalers at the time of the recent price increases.
I have no evidence to indicate that there were excessive stocks of fertilisers in the premises of wholesalers at the time of the recent price increase nor have any complaints been received in my Department about stocks held by traders at that time. I am informed that only minimal stocks of home produced fertilisers are at any time held by wholesalers.
With regard to coal, particulars of stocks held by all importers were obtained before the recent price increases were approved. With one exception, the stocks held by importers were minimal. In the case of the importer who held a significant stock, a price increase will not be implemented until the stock is exhausted.
Does the Parliamentary Secretary recall that on the last occasion on which an increase was granted it was brought to the notice of the Minister that there were substantial stocks on hand and the Minister promised these stocks would be monitored? What was the outcome of that? What action was taken?
That is precisely what I have just told the Deputy. There was an inquiry by the Prices Advisory Body into coal prices in June and the result of that inquiry was published in September, 1975. One of the recommendations, probably the most important one, was that the level of stocks should be monitored prior to any price increase being granted. That was done on this occasion and the evidence indicated there were not significant stocks on hand except in one case and, in that case, the increase is not being allowed until those stocks are exhausted.
What would the Parliamentary Secretary regard as substantial stocks? In trading one has to have fairly extensive stocks of any commodity.
In fact, stocks were very low indeed. I think there is some evidence that one particular distributor had bought coal at the new price and, because the increase had not been sanctioned, for a short time he was selling at the old price. Investigations are sufficiently detailed to ensure that no significant stocks were in existence and no exorbitant profits were therefore made.
Would the Parliamentary Secretary say how close to the date at which the increase occurred were the stocks in hand investigated?
The evidence of stocks in hand was submitted by the people concerned with their application. This was, of course, checked up right to the date of the increase being granted.
Would the Parliamentary Secretary accept there was a go slow in deliveries for at least ten days prior to the announcement of the increase?
Hear, hear.
The evidence gathered by the Prices Commission indicates there was no significant level of unjustified profits made by coal distributors owing to the recent increase.
With regard to stocks in hand, did the Parliamentary Secretary take into consideration coal that was ordered? I understand that cash had to be sent with orders and was that fact taken into consideration as stock?
The only thing that would be relevant would be stock on hands purchased at the old price.