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Dáil Éireann debate -
Wednesday, 15 Feb 1984

Vol. 347 No. 13

Dairy Produce (Miscellaneous Provisions) (Amendment) Bill, 1984: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

I dislike the move afoot in the EEC to squeeze the small man out of agriculture. Big co-operatives are getting bigger. Farmers in general are losing contact with their co-ops. The farmer is now a number between one and 5,000. His name is in a computer and he does not get the attention he deserves from the co-ops. Is this what Horace Plunkett envisaged for Irish agriculture? This is the age of the combine, the multiplier and the huge co-op. The small farmer in rural Ireland made his contribution to the development of our agricultural policy down through the years.

I should like to see more help given to the farmer who is in difficulties. It is well known that many of our young farmers got into difficulties because they borrowed money to develop their farms and make them viable units. They borrowed money at excessive interest rates to enlarge their acreage. I should also like to see co-operation from the farmers who are in difficulties. All the blame cannot be put on the lending associations. If a farmer does not do his best to repay the money he borrows, he is falling down on his contract. Any farmer who is seen to be doing his best should be given a chance by the lending associations and not sold out.

Ten years ago, and even five years ago, the banks were offering Irish farmers colossal amounts of money. There was no limitation when it came to buying land. At that time the price of land was escalating. Land was making £5,000 and £6,000 per acre in my own constituency of Cork South-West and in the fertile plains of Limerick and the midlands it was making more. At the same time, good agricultural land could be bought 40 miles south of London for £1,500 per acre. Was the English farmer daft, or had the Irish farmer no recognition of the value of land? The banks contributed in no small way to the problem.

Deputies

Hear, hear.

Farmers were told by bank managers that they would be given plenty of money. This meant that farmers were bidding against farmers. The banks and lending institutions who encouraged Irish farmers to borrow that money should show a bit of tolerance so far as the repayments are concerned. The majority of farmers who are in financial difficulties are doing their best. Very few of them are shunning their responsibilities. No nation of our size can achieve significant economic expansion without a great, sustained effort which must embrace all elements of the national community. There is not and never will be any guarantee of success. Success is something we must deserve by virtue of our whole-hearted dedication to ensuring that our major industry, agriculture, will continue to play its part in the economy in the next decade.

Deputy Sheehan should relate his contribution to the Bill, with particular reference to the guarantees which the Bill enables.

What I have said relates to the future of agriculture.

In a very general sort of way.

Of the three million people in Ireland one million are gainfully employed and of those over 520,000 are employed in agriculture. In an industry which has the capability for expansion it should be made attractive for farmers to continue on the road to prosperity. The contribution of our farmers to the mountain of dairy produce is only a drop in the ocean. For years the Irish dairy farmer was curtailed in his production because he did not get the State help which was obtained by other European farmers. The German cow and the Danish cow are producing 1,000 to 1,100 gallons of milk while in Ireland the national average is about 700 gallons. It would mean millions of pounds to Irish agriculture if we could step up production to the level of our European counterparts.

I know that the Minister for Agriculture will do his best when talks are resumed on the threatened super-levy to emphasise to the Germans, the Dutch and the French the necessity to give Irish farmers a breathing space until such time as we achieve the same rate of output as European farmers.

It costs £15,000 to create one new job in industry outside agriculture but to keep a man from leaving agriculture costs only about £500. More attention should be given to agriculture. Directly and indirectly agriculture employs roughly 40 per cent of our total labour force. It provides 35 per cent of gross exports and almost 50 per cent of net exports.

I do not want to interrupt but the Chair would wish that Deputies would confine their remarks to the dairy sector of agriculture. If they do that, the Chair will be generous with them. To have a debate on all sectors of agriculture is not in order.

Over 90 per cent of our farmland is under pasture and the majority of that land is devoted to milk production. I am a firm believer in diversifying to other products with a milk base. I agree that there is a vast potential for different utilisations of milk. The Germans, the Dutch and the Danes are selling products in our supermarkets such as cheese with onion, cheese with ham, cheese with chives, cheese with peppers, cheese with crab, cheese with lobster and, cheese with smoked salmon. This is a method of utilising the surplus of dairy products. These are types of cheese which we could produce equally well. We must divert our attention from direct butter production to products such as I have mentioned. If the Germans and the Danes can do it successfully, surely Irish farmers can do so.

Assistance must be given to dairy farmers. The dairy farmer is one of the hardest working individuals. He must milk his cows twice a day for seven days a week. There is no five-day week for him.

He gets no recognition for it.

As far as we are concerned there is recognition.

We never left the farmers to sit in Merrion street.

The Deputy's party took the dole from them.

Deputy Haughey, when Minister for Agriculture, left the farmers in the frost and snow in Merrion Street and walked over their bodies every morning when going to his office. We in Fine Gael have always shown an interest in Irish farmers and in dairy producers. As long as the Minister for Agriculture is from the Fine Gael Party the farming community will never be forgotten. The small farmer in the west has contributed his share to the success of the dairy industry.

The Deputy's party are doing away with these farmers by taking the dole from them.

It was the big farmers who went to court over the valuation system. The result of that court case is that every farmer must disclose his income.

The Government made the decision.

The court made the decision. What I am saying may not be too palatable to my friends opposite but while I am a Member of Dáil Eireann I will fight tooth and nail to ensure that the small man gets his fair share. I was not born with a silver spoon but on a small 30-acre mountain farm in south-west Cork. I know what it is to take the milk to the creamery every morning. For 25 years I collected the milk from ten farmers and took it with my own milk to the creamery. I know what it is to make a living on a small mountain farm. Milk production is the main plank of the agriculture industry.

As I said last night, I would much prefer to see our GAA clubs and our golf clubs having milk bars available in their pavilions and club rooms. This would be preferable to having lounge bars installed in these clubs. It has been proved that milk is vary valuable as far as building up athletes is concerned. A great quantity of milk could be sold in those clubs if it got the backing of everybody in the House. I congratulate the National Dairy Council for their initiative in promoting the use of milk. This was a good public relations job. We need something like that. I was amazed at the remark made about Tony O'Reilly from across the floor of the House yesterday evening.

(Interruptions.)

I want order on this topic. I will not have individuals spoken about in a complimentary way or in an abusive way in the House. It is quite disorderly to abuse individuals who cannot defend themselves. If one starts praising individuals who are not here somebody else may take a contrary view.

I would like to pay a compliment to that man for the manner in which he built up——

The Chair advises against that.

Is it wrong for me to praise a man who has played his role in building up Bord Bainne and Kerrygold butter?

Will the Deputy please leave the present individual out of it? If Deputy Sheehan is to speak in a complimentary way about individual X somebody else may speak in a different way. I want to avoid that.

There is nothing wrong in paying compliments to that man.

If the Chair lets a person be complimented somebody else may take a different view.

(Limerick West): The Deputy should compliment the Minister.

The Chair can rest assured as far as Bord Bainne are concerned and as far as the National Dairy Board are concerned they are doing their best, in conjunction with the Minister, to ensure that proper marketing and proper sales are carried on in relation to our milk and milk products throughout Europe.

What about the mountains?

Deputy Sheehan on the Bill without interruption.

I would like to remind my friends on the other side of the House that we did not contribute much to that huge butter or milk mountains. Our contribution is only like a drop in the ocean. It is a well known fact that farmers from Germany, Holland and Denmark who have the opportunity of getting cheap soya bean meal and cheap concentrates to feed their cattle during the winter have contributed to the butter and milk mountains. We have a traditional pattern of producing milk which does not contribute in any great way to the butter mountain. I realise that we have increased our milk production considerably in the last decade but even when that is taken into consideration it still does not go within a fraction of the percentage increase the European farmers have made.

The threat of tuberculosis has been a serious impediment to our dairy production. During the past 20 years this disease has robbed many farmers of fine dairy herds. We must bear such factors in mind. Many of our dairy farmers have gone through very bad times because their milk stock has been diminished through TB. I suggest that, if possible, help should be given to any dairy farmers who have suffered because of this. It is essential that the herds of every dairy farmer be brought up to peak production as far as milk yields are concerned. Some people may argue that that is not the correct policy but I believe that our dairy farmers are entitled to the same treatment as their European counterparts. They should be put on the same pedestal as their European counterparts.

We have the most natural and the finest climate in the world for dairy production. If we were ten or 15 degrees further south we could get our share of the income which can be obtained from the production of wines and tobacco. This would be of great benefit to our economy but we have a climate which is best suitable, outside of New Zealand, for dairy production. It is essential that we do everything possible to ensure that our farmers are given the chance to bring their production up to the same rate as their European counterparts.

Dairying is damaged by excessive imports from other countries like New Zealand. Even though New Zealand by her sovereign right enjoys preferential treatment in relation to our nearest neighbour, I believe the time has come, when cuts have to be made in dairy production within the EEC, to curtail the export of dairy products from New Zealand to Great Britain.

We will have to send the Deputy to Paris.

It is a well known fact that the Minister for Agriculture has not spared any effort in emphasising that at the negotiation table. He comes from a sound agricultural background whose forbears originated from west Cork, good, strong, able-bodied milk producers in that area. The Minister has a tradition in agriculture better than any other Minister who ever occupied that position.

It will take the Deputy a while to convince anybody of that.

Fine Gael are proud to have Deputy Austin Deasy as Minister for Agriculture looking after the interests of our dairy farmers.

You will change your tune after the Paris talks.

I assure the speakers opposite that if there is a good deal to be done our Minister for Agriculture will do it.

Let us hope so.

Of course with the co-operation of the people across the way.

(Interruptions.)

Deputies, please cease interrupting.

The best hurler is always on the fence but when that hurler is in the field he founders very badly at times. If some of those hurlers opposite were in the hot seat that our Minister for Agriculture occupies at the moment they would not handle the situation as eloquently and successfully as he has handled it.

We will see you on the course in September.

We will meet you there too and we will beat you in the hurling field.

The Deputy must address his remarks to me.

Our milch cows do not produce as much milk as the European cows do and there is room for improvement in the breeding and yields of our dairy herds. I was very pleased to hear that our Minister for Finance, Deputy Dukes has continued the subsidy for artificial insemination to improve cattle breeding. In the second last budget, which was produced by my friends across the floor, they took out the subsidy on artificial insemination. Wisely we reintroduced it. That was a step in the right direction. Also we have retained the ground limestone subsidy which plays its role in improving the soil content of our dairy pastures.

Milk production is three and a half times more important to this country than it is to the latest arrival to the EEC, Greece. It is four times more important to the Irish economy than Danish milk is to the Danish economy. It is six and a half times more important to Ireland than to all the other milk-producing countries in the EEC. Therefore, if we are to survive it is essential that our dairy and milk products be given a chance to expand and to come up to the level of those of our European counterparts. That is the policy embraced by our Minister and he will do his best to achieve it when he goes to the next Summit meeting.

In conclusion I make an all-out appeal to my friends across the floor to rally behind our Minister for Agriculture to ensure that he gets our rightful share of the European cake for our dairy farmers. With that spirit, determination and co-operation from everybody in this House I have no doubt that he will be victorious in those talks.

This Bill provides for the continuance of a guarantee. Seldom do we have a Bill before this House that is not looking for a fairly hefty subvention. This is one such instance. The Minister in his speech stated, and I quote from the Official Report of 8 February 1984, column 2022, volume 347:

No claims have ever been made under the State guarantee and no question of expenditure by the Exchequer has arisen up to now; neither is any such claim likely to arise in the future. The present Bill, therefore, affords the House a timely opportunity to demonstrate our confidence both in An Bord Bainne and in the future success of Irish dairying.

Certainly we have reason to compliment An Bord Bainne on the work they have done. We all want success for Irish dairying. In that speech the Minister made it clear for the first time that the alternative to the milk super-levy would be a direct price cut which would amount to approximately 10p per gallon. Further on in the speech the Minister said that the Greek Presidency last autumn advocated that the milk super-levy proposal was for a period of four years with a review at the end of that time. He went on:

In other words, if the super-levy proposal were to come in and to bite — as I think it will —...

This is an admission that we will have either the levy or a reduced price for milk. Is the Minister now examining the whole situation of the dairy industry on that basis of a super-levy being introduced or a reduction in the price of milk which might well mean a further reduction? If money is tight in the EEC such a provision for the reduction of 10p today might mean a further reduction of about 5p in, say, three months.

We must have a realistic, in-depth look at the situation. There is no need to elaborate on it. Dairying is the backbone of agriculture as we have developed it over the years. We forgot about other aspects of farming, as I have maintained for the last ten years as one involved for a lifetime in service to agriculture. Perhaps we were right in the past, but I would like to refer to a McKinsey study which was commissioned by the Bank of Ireland and issued in 1977, seven years ago, and perhaps I can indicate how things can be seen out of perspective. That report contained an in-depth study on agriculture, its general development and the benefits to be derived not alone from the products but also from the by-products and added value products. The first chapter deals with adapting the dairy sector to changing demands. The report stated, in regard to adapting the dairy sector to changing demands, that this growth in milk production in Ireland reflects a gradual shift in the pattern of European dairy farming that has been taking place for some time, away from high cost producers such as Germany, towards low cost countries around the periphery. Many of the agricultural projections were based on that, that we would be the dairy producers and that the Germans, the Dutch and the Danes would not be working seven days per week and would leave it to the Irish and the Italians. It was on that misconception that we based our future projections.

The Minister should look at this and examine how the levy, and the other alternative he mentioned, will affect the 100,000 gallon-plus supplier in Leinster and Munster. The 10,000 gallon-plus supplier in the west and Cavan-Monaghan, the constituency which I represent, will be worst hit by either of the measures mentioned. Almost 50 per cent of Irish farmers get their main source of income from dairying but in Cavan-Monaghan, 70 per cent of farmers depend on dairying. In fact, 73 per cent of farmers in that area last year depended on dairying as their main source of income. The Minister must take those statistics into consideration. I suggest that he visit those areas where dairy herds produce 10,000 to 20,000 gallons of milk annually.

I intend calling to Killeshandra shortly.

The Minister should call to Monaghan also.

To Ballybay, surely.

The Minister should cover the two counties and discuss the problem with the management of the co-ops. He should call to the co-ops including Killeshandra, Bailieboro, town of Monaghan and Lough Egish and he should consider calling to a number of the small co-ops. In north Monaghan we have two independent auxiliary co-ops that are managing to survive in the midst of stern competition although they take in a small amount of milk. Those independent co-ops provide the full range of services to local farmers. Other groups serving the area include Virginia Milk Products Ltd. and a number of milk processing plants that do not operate as creameries. In the course of his visit to that area the Minister will have to examine all the relevant information presented to him so as to ensure that at the end of the day he will be able to put forward a policy to safeguard small suppliers who are totally dependent on milk because of the type of land they have and the size of their farms. Such farmers are unable to branch out into grain or beef production, and milk and cattle production are their only two outlets. We are all aware that the return on cattle production is not great on small holdings of 50 or 60 acres. Following this investigation the Minister will have to consider tier and other systems to ensure that the first 20,000 gallons of milk is not caught in the embargo or subject to the super-levy.

We have heard a lot about factory-type farming on the Continent which is creating many problems here. Under the CAP the Danes, the Germans, and others carry on factory-type farming rearing up to 3,000 cows on imported cereals. Those animals never see the light of day. It is very difficult, if not impossible, for our small farmers to compete against those people. We must also contend with the weather. The report on Border regions issued yesterday stated the County Leitrim had 77 dry days annually compared to four times that number in continental countries. Our milk production accounts for only 4½ per cent of the EEC total and that is an indication of the unfair competition our farmers face. In my view it is contrary to the Treaty of Rome. We were to have a system that ensured that areas on the periphery of the Community would be helped. As time progresses we will find that the bigger farming projects will get greater to the detriment of those living on smallholdings.

In regard to production of milk Ireland accounts for about 4 per cent of the EEC total; France, 24 per cent; Germany, 23 per cent and Great Britain, 15 per cent. That is a clear indication of the injustice being done to our farmers. Admittedly, we were slow at the start and we had to start at a low base. We did not make very much use of our first ten years in the EEC. Our co-ops and milk processing plants are working under capacity now. In May and June they deal with a high volume of milk but there is little production in winter months. Prior to our entry into the EEC when our cattle population was in the region of seven million we were told that in a short number of years it would increase to eight million and, eventually, rise to ten million. We have moved up and down from that target. In spite of all the incentives available we have not had a big increase in cattle numbers.

The McKinsey study of 1977 took an in-depth look at production, marketing and the opportunities for development of dairying, beef production, pork, tillage and vegetable growing. The emphasis was on the downstream manufacturer. Recently on looking at the report I noticed that in 1977 I remarked that if the suggestions in it were implemented we would be a lot better off. There was reference to animal by-products such as hides. The report outlined the number of jobs that could be provided in the leather industry. At that time 45 per cent of hides were being exported and the report suggested that this should change with the development of the tannery industry.

I had a parliamentary question yesterday about the percentage of our hides being exported and I was told it was 96. In other words, we are processing only 4 per cent of our hides at home. In reply to another question I was told that £40 million worth of farm machinery is being imported at a time when we are capable of making all our machinery at home and indeed when we could be exporting £8 million worth. If the McKinsey Report had been implemented in full we would have saved private enterprise.

There are many milk by-products we could be making and I suggest that the time has come to move away completely from butter production. We should be diversifying. I can give an example of our concentration on butter making. During a by-election campaign in Cork not so long ago I asked for cheese and I was told by the hotel waiter that it was not on the menu. I was in the heart of the dairying industry, yet I could not get cheese.

Did the Deputy ask for lobster cheese or crab cheese?

I did not know they were putting lobsters and crabs into cheese. I thought on that occasion how badly we were missing the boat. We should be diversifying to cheese and other by-products. It is well known that 85 per cent of our milk is being concentrated on butter making and the manufacture of such things as chocolate crumb, and a recent IDA report on food production indicated that that percentage could be reduced to 65 by 1990. If we could do that quickly there would be no need to fear the super-levy. In 1980 only 17 per cent of our milk was utilised for products other than butter and chocolate crumb making whereas that could be increased to 35 per cent. That would put the dairying industry into a much more favourable position.

The Department will have to look seriously and quickly at this. They should not be waiting for work study reports or such things. They should immediately consider alternative uses for milk. The creamery in Monaghan diversified and they are having a fair amount of success. There has been a vast increase in imports of milk by-products. We could be making desserts and yoghurt. These commodities accounted for 9 per cent of our imports in the past 12 months. If we have any commodity imports accounting for 9 per cent of total imports we need to have an immediate look at the situation so that we can correct it. If we tackled it properly, this area would produce perhaps not thousands of jobs at the beginning but hundreds.

I congratulate the Monaghan Town Co-operative who recently invested £5 million and were grant aided by FEOGA and the IDA. They have built up a partnership with a Dutch co-op with whom they have a franchise. They believe there is also a fair opportunity for cross-Border trade. They are able to pay a premium price for the quality milk they use. There should be quality control in all co-ops and customers should be penalised for high residue content in milk. I was among ten who saw the growth of the Monaghan co-op which is now one of the best in the country. We put much hard work into it and built up a good work force under good management. We had good labour relations and a good relationship with suppliers, committees and the farmers.

As I said earlier, we will have to reduce our dependence on butter and in that way we will lose our dependence on intervention. Though it can be good to have intervention, it has its drawbacks because if you have the easy way out you will go on dumping loads of produce into cold stores and will not have to worry about sales. That is one of the drawbacks of the intervention system.

The sale of New Zealand butter to England has caused great conflict. It is very hard to understand the thinking behind it. It is time for all the Agriculture Ministers in the EEC to come together and clarify the position. The October 1982 Community report stated that the Council of Ministers had not been able to agree to a European Commission proposal that New Zealand be allowed to export 89,000 tonnes of butter to the UK the following year. There was a proposal to reduce that by 1,000 tonnes. New Zealand had reservations about that proposal. It was feared it would establish lower initial thresholds for future negotiations. I fail to understand this.

I understood the importation of the butter into Britain was for a certain period. The report also stated that despite the fact that conditions for New Zealand butter entry into the market were negotiated at the time of the first enlargement of the Community in the context of temporary and transitional arrangements, at the end of 1982 New Zealand would have enjoyed ten transitional years on the UK market. I do not understand how they can increase the volume of their imports. I do not expect that trade agreements would be demolished overnight but there could be a 10 or 20 per cent reduction in the amount of produce they were allowed to bring on to the British market. A close look must be taken at this. It is happening at a time when there is talk of super-levies and cutbacks on production. These measures are causing conflict between members of the EEC.

As regards our manufacturing capacity we rely very much on grass for milk production. The peak to through ratio is 14:1. The only way co-operatives can be successful is to ensure that they have milk all the year round. They should pay a premium. The co-ops which are involved in liquid milk must pay the premium but if the others did this they would ensure a supply of fresh milk. The ratio could be reduced to 7:1. Our competitors have milk all the year round. We must use better quality feed and good quality silage. Most feeds are very expensive and this is one of the problems we have. We are at a severe disadvantage in this. Our neighbours have low priced cereal substitutes.

We do not utilise the processing capacity of the co-ops to the full. In May or June they are at 100 per cent capacity but that falls to about 5 per cent in December and the average is 40 per cent. It is hard to expect anyone with machinery and equipment to work at 40 per cent capacity. We do not use our equipment to the full. The equipment in the dairy and processing plants which have been set up is among the most modern in Europe. I visited the Mona yoghurt factory in Monaghan some weeks ago and they certainly deserve to have a continuous supply of produce to process there. The food processing industry has been very slow to develop.

We are in much the same position as regards beef. We do not have the same amount of beef in the winter as we have in the summer to ensure continuity of supply for meat plants. If we had a strong beef industry there would be a continuous demand for calves and we would get good prices for them. The Minister should examine the possibility of all year round production in milk and beef. Substantial sums of money were allocated for the calf to beef scheme under the western aid package. Most of the farmers interested in partaking in this scheme as a sideline were in milk production already and so were debarred from availing of the grant aid. That was a pity. We must ensure we have a market for our calves and a continuous supply of animals for slaughter. A McKinsey study dealt with every aspect of this. They outlined their proposals not only for beef but for hides, blood and offal. There is a great opportunity to progress in this area.

As regards section 84 loans, I noted the comments of the CII on 9 February. They stated that the decision to remove section 84 loan facilities from manufacturing industry could have negative consequences where the facilities reduced interest rates from 4.5 per cent to bring them into line with the rest of Europe. This provision has helped hundreds of companies to remain in operation and to implement expansion plans. In an agriculture-based industry such as a dairy co-operative the ban is estimated to result in a decrease in milk prices and in the prices of grain and so on to the producer. Therefore, I urge the Minister to give serious consideration to this proposal before introducing the Finance Bill.

Yesterday I had a question relating to cattle numbers and I note from the reply that at 1 June 1983 our cattle population was still below the seven million mark that was reached at one stage. This is very disappointing. The reply to the question indicates that in 1983 the estimated number of cattle in the country was 6,771,100 while at 1 June 1982 the corresponding figure was 6,688,300. The increase is minimal despite the calved heifer scheme, calf premiums and so on. It is regrettable that we are not increasing our cattle numbers. Perhaps a more important matter is that of increased milk yields, but we have had some improvement in that area though the average yield per cow is still very much below the 1,000-plus average for the Dutch and the Germans or of the 964-gallon average in Britain. That, then, is an area to which we must pay greater attention if we are to ensure the required development of agriculture.

Seven years ago there were 9,000 workers in the dairy industry while the estimated current figure is 11,000. The corresponding figures for workers in the meat plants are 5,000 and 6,000 respectively. That is a yardstick by which we might examine the benefits to the community, where in a period of seven years the increase has been only marginal in terms of employment in the agricultural industry, an industry that should be in a position to take up the slack in manufacturing concerns who have faced such tough competition and who consequently have gone out of business. An increase of only 3,000 people in the work force in the agricultural sector is not at all adequate. If we were to take account of the situation in the food-processing industry, the Sugar Company, and so on, we would find that there is a minus situation, perhaps a drop of 300 to 400 workers in the last number of years. This is an indictment of us at a time when we are exporting cattle live and when, even if we kill the cattle here, we export the hides without processing them. Far too much of our beef is exported on the hoof while the supermarkets are bringing in each week dozens of container loads of prepared foods, be it pork- beef- bacon- or milk-based.

In the past year, in terms of yoghurts and other dairy products, our imports have totalled £14 million. As exporters we cannot complain too much about imports to the country but we should ensure that we are in a position to meet the market requirements in every possible instance.

I have asked that the House be given an opportunity of discussing the report of the Economic and Social Committee of the Community on their visit to this country during the summer. Quite a number of those on the committee are from Ireland. They include Mr. Thomas Roseingrave, former President of Muintir na Tíre, and Mr. Patrick Murphy, representing the trade unions. The committee visited the entire Border region, North and South, and produced a report with the recommendation that £125 million should be spent on the area. This is the first positive suggestion for this area and the committee outline in detail how the money should be spent. They recommend that it be spent on land improvement, road structure, arterial drainage, tourism and so on. They suggest that there should be set up pilot farms on creamery milk, beef and hill-sheep production and they have proposed, as envisaged by the southern representatives, the designation of up to eight pilot farms in the Border area — three for dairying, three for beef and two for hill sheep. They say that this is basically a low-cost approach under which the designated farmer-owner would be responsible for the enterprise with instructors from the agricultural advisory service being involved on a part-time basis and with the contracts varying from six to ten years, depending on the enterprise. They suggest that the cost be limited to a yearly allowance to the farmers of two million units of account for his providing demonstrations on his farm and that there be an allowance of five million units of account to cover 25 per cent of the salaries of the instructors from the advisory services. There would be a different rate in the case of hill sheep units.

Having received the report only yesterday I have not had time to study it in detail but it seems to me that such pilot schemes would be very useful, both in terms of information and of education, for people on both sides of the Border, an area in which there are some very good farmers working what is probably some of the worst land in the country. Indeed, at one of the meetings held in Monaghan the committee agreed that parts of that area are among the most severely handicapped within the Ten. It was mentioned at that meeting that there would be some overlapping as between both sides of the Border in respect of artificial insemination and so on but a far more efficient service could be provided.

The Government must do everything possible to ensure the successful outcome of the proposed super-levy negotiations. We must not allow anything to happen that would hinder the development of our dairy industry. In recent days we have had a clearer indication of the Minister's thinking on the whole matter than has been the case up to now. It was that lack of information that caused so much annoyance and frustration. The Minister must have regard to the way in which any proposal put forward would effect the various regions to ensure that they will come up with the proposal that will do the least damage to the country.

I wish to place on record my appreciation of the tremendous work of An Bord Bainne since it became a farmer-owned co-operative in 1972. The fact that it has operated since then within the limitation of generating its own resources is most commendable. At various stages the State guaranteed funding. It began in 1972 with assets of between £2,500,000 to £3 million but that was insufficient and it had to borrow. Were it not for the influence, expertise and ability of a central marketing agency such as An Bord Bainne the whole dairying industry would not have developed to the extent it has developed in the past ten years. We are still far behind our trading partners in the EEC but An Bord Bainne must be commended. The other State agencies who are also involved in the marketing of Irish products are to be commended. I speak in particular of the CBF who are dealing with a vitally important aspect of Irish agriculture.

The extension of the guarantee scheme for a further six years is something all Members will support. We never seriously thought about marketing of our products until it became obvious that unless we could present a saleable product there would not be a market for it. The difficulties confronting the dairying industry at present are a matter of concern not only to farmers but to the economy generally. Much has been said about that in the debate.

I should like to draw attention to the influence of possibly one of the largest dairy co-operatives in the country which is in my constituency and to give some idea of the scale of growth of that co-operative since it was founded some years ago. In 1982 the intake was 128 million gallons of milk, a significant increase on the 1981 figure. If we were to apply a super-levy on the 1981 figure it would be totally unacceptable. It is about time the EEC considered the possibility of a super-levy having regard to the very high level of production in European countries but Ireland must be exempt from that super-levy because of our low level of productivity. In 1982 there was an increase of 13 per cent on 1981 in respect of milk intake in the Avonmore area and in the two years 1981 and 1982 there was a cumulative increase of 14 per cent. That was a significant increase. Perhaps the Greek proposal that would take account of milk production at 1983 levels is an advance but it falls far short of what is acceptable on the Irish scene.

We had a further difficulty in relation to milk production in Ireland. This is true not only of Avonmore but also of the rest of the country and is true to a lesser extent in respect of Europe. In 1982 there was a ratio of 14 to one in respect of valley periods of milk production in the Avonmore area: in other words, in the period May-June, the high peak period, farmers got 14 pints more than they got in the January period and naturally this created enormous problems. As a result of re-organisation and the maintaining of higher price levels during the winter period that ratio was reduced to six-and-a-half to one. On the other hand, Holland is able to maintain a milk production average almost the same throughout the year and that is a marked improvement on what we have achieved.

In the Avonmore area they take in an average of 350,000 gallons of milk each day and in mid-May in 1982 that had increased to 650,000 gallons per day. Avonmore claims to account for 12½ per cent of national output. The value of the performance at Avonmore and the investment by farmers in that enterprise is seen in the total value of milk which was approximately £90 million in 1982. Of that amount £15 million goes back in wages and salaries and any attempt to undermine that progress would have a disastrous effect not only on the region but also on the State. That indicates the importance of a favourable solution to the super-levy problem so far as we are concerned.

Of the £15 million going back on wages, approximately £7 million goes directly into Government coffers in PRSI and in direct taxes. Much more goes back in indirect taxes because of the level of VAT on inputs by farmers. The State will benefit to an enormous degree by any further increase in milk products. The firm in Avonmore can cope with a further 15 per cent increase in the next two years without extending the plant. In 1982 Avonmore was one of the top ten businesses in the country and that is some indication of the growth in a number of our co-operatives. I draw attention to Avonmore because I am familiar with the situation there. Some 60 per cent of the business of that organisation is concerned with milk.

Co-operatives were designed originally to help farmers to utilise their resources, to provide them with investment capital they might not have been able to acquire elsewhere. Perhaps co-operatives are moving slightly away from that original concept and one cannot blame them for doing so because they had to borrow money at high interest rates. We do not have available money at low interest for the development of our dairying industry. We have a unique position vis-à-vis our trading partners and we have difficulties in transporting our products to the major European markets. I give the example of Holland which is the size of Munster and which has a level of milk production that provides liquid milk or the various processed forms for a population of about 15 million people while we provide for a population for approximately three million. We are producing only about 4 per cent of the overall EEC milk production, yet we are experiencing serious problems.

Since we joined the EEC a number of our farmers have made profits from milk production. There are various risks involved in this industry because there is a high level of disease associated with the production of milk, either through tuberculosis or brucellosis. Happily we have made significant progress in the elimination of brucellosis but the tuberculosis problem keeps cropping up in unexpected areas and it is difficult to explain why this happens.

Our milk production will increase and we must make the necessary provisions to market the increased production. This is where An Bord Bainne have an enormous task ahead of them. Because there is a growing surplus of milk and milk products, one can only assume that a super-levy will be imposed by the EEC but we did not create the problem and it would be extremely unfair and unjust if this levy was imposed on our farmers. The only EEC country favourable to Ireland is Greece, a relatively new member. There are eight other nationally minded countries in the EEC and unless they go back to the original concept of the Common Market there is a serious danger that the Common Market will fragment and become totally disrupted. That would have serious effects for Ireland because we have benefited from membership in the agricultural and industrial areas.

Let us compare our figures with those of Holland. I chose Holland because she is one of the major factory milk producing countries. Holland imports cheap cereal substitutes while using the mechanism of the EEC to her own advantage. We get about 700 gallons per cow, and Holland gets in excess of 1,100 gallons, and is increasing. In Ireland we feed about half a tonne of meal per cow, in Holland they feed 2½ tonnes per cow. That cheap food is being imported and converted into milk. The EEC has seriously to examine this development. While we object to this situation, at the same time it must be recognised that a super-levy is definitely needed to deal with this high level of productivity. Perhaps the cereal substitutes could be devoted to some other type of production.

Let us look at the surpluses in the EEC which have developed because of the central marketing and intervention systems. A great deal of energy is used storing that food while many millions of people are dying of starvation every day. One wonders if there is any Christianity left in western Europe. Have we adopted a purely economic survival attitude? There must be some way to dispose of these products. We have to assist Third World countries. We have to buy some of their products because only by doing this can we help them develop. If the United States were to unload her surpluses on Europe we would be engulfed in dairy products and it would take us years to recover from the recession such a move would create. It is awful to think that the present situation should have developed.

A number of people mentioned diversification. Liquid milk, cheese, butter and skimmed milk powder appear to be the main profitable products. We do not seem to have researched other areas. In my view we will have to examine very carefully and invest significantly in those areas, otherwise there will not be a market for the extra milk produced. That cannot be done on a national scale only; it must be co-ordinated on a European or universal level. There is no point in one country doing this if others ignore the rules and regulations.

In the Avonmore area cheese production is a loss-making enterprise. A greater level of milk can be utilised in the manufacture of cheese. A previous speaker mentioned that he asked for cheese in a certain hotel in west Cork and Deputy Sheehan mentioned crab and lobster cheeses. I have not gone into this question in such great detail as those Deputies, but it was interesting to hear that there are so many ways of presenting this product. When one walks around a supermarket in Waterford, Kilkenny or Dublin one can see the number of foreign cheeses available. The answer lies in diversification. We have seriously to examine agricultural imports and try to devise ways and means to counteract the present situation. This can only be done successfully if we pay attention to presentation, quality and competitiveness. We cannot stop the flow or we will undermine the Common Market. Bord Bainne, irrespective of where they get the funding, should ensure that every county contributes equally towards the diversification of milk and milk products. Admittedly this would be very desirable and it would be extremely difficult to achieve but the enormity of the problem should not deter us from attempting it.

The EEC subsidise milk for schools. I do not know how much milk these pupils drink but I believe it is a sizeable amount. I know of a few national schools I visit around 11 o'clock in the morning where there are to be seen creates of small bottles of milk all over the place, some half drunk and so on. We have entered into a new dimension in milk processing through yogurt. Most children introduced to yogurt seem to like it; it has a special flavour. It is different from drinking milk and I think they should be given an option between the two, that there should be a crate of yogurt available for those who would prefer it. The idea may not necessarily be to dispose of the milk — although perhaps that was at the back of the minds of those who promoted the scheme — but it should be remembered that it is important also from a food protein point of view. We should examine that aspect.

I do not know what is the level of milk in, say, Bailey's Cream. I suppose if alcohol could be added to milk there would be a tremendous market for it and it would be sold in most of our ale houses if we could blend it in such a way and produce it at a certain price. It has been done successfully both by Avonmore and Waterford Co-op. Bailey's Cream is an extremely palatable drink. Perhaps there has been insufficient investment in that area. Undoubtedly there is need for a marketing fund in order to get rid of much of the surplus of dairy produce.

Another area to which I have given consideration is that of milk/butter products. Recently we heard a lot about the increase in cholesterol in the human system from an intake of butter. But there has been much variation of opinion as to what does or does not cause heart disease, what does or does not increase cholestorol levels. There have been many books written on the subject, some contending that one should not eat potatoes or butter while others contradict that theory, which is having a definite effect on the marketing and consumption of butter especially on the home market. There are a lot of polysaturates on supermarket shelves manufactured in Third World countries. They are on the increase to the detriment of the sale of butter. Surely there should be some attempt made to extract fats from butter, presenting it in a different way so that at least we would be consuming a product we manufacture ourselves.

There was a great scare created recently about antibiotic residue in milk which gave rise to an almost immediate 12 per cent reduction in sales of milk to urban areas from the Avonmore Creamery. That scare was initiated at a certain seminar. I do not think it was properly researched on a national scale. Perhaps there are cowboys who would over-use antibiotics, disposing of them into various milk outlets. But there is very accurate, day-to-day monitoring of the level of antibiotic residues in milk coming into the Avonmore area and if the milk is found to have a content of antibiotics over and above an acceptable level that milk is put aside. Even in the manufacture of cheese it will show up. The cheese will not ferment if it has a high level of antibiotic residue. The people who create such scares should think about the damage done. If there is found to be an abuse of the use of antibiotics, by all means it should be counteracted but we should be careful before creating such scares. Indeed the question might well be posed: was the creation of such a scare an attempt to get a monopoly of the dispensing of antibiotics from the farming point of view pushing up the price so that people in a certain marketing agency would control its dispensing? I am not sure. Perhaps the Minister would have that matter investigated. The whole area of milk is vital to our economy.

I might reiterate my views with regard to a super-levy as far as Ireland is concerned and reassure the Minister of support for his approach which has been exceptionally eloquent, authoritative and useful as far as this nation is concerned. While some Members of the Opposition would like to think that the Minister's contribution to agriculture and to his portfolio is less that they would contribute in similar circumstances, I might remind them that his rating amongst the farming community is higher than it was during many of their Minister's terms in office. It must be remembered that he is serving in a very difficult period. He may well be faced with finding the most difficult solutions that have faced any Minister for Agriculture in the history of this State. Nonetheless he is capable of the job and I extend him my full support. I am confident that, when the final negotiations are over, he will have achieved for us that to which we are entitled. Indeed there is a measure of justice associated with our position.

I said, and I did not develop the point, that we are in a unique position. I should like to think that we would be given a subsidy for the export of our products to Europe where there are the major urban growth centres and all the milk producing areas adjacent to them. But they do not have our problems. Our exports must cross the most difficult section of the channel from Rosslare to Le Havre at difficult times of the year, which is extremely costly. Therefore, we should be seeking a transport subsidy that might be utilised to lessen the impact of any attempt at imposing levies so far as milk productivity here is concerned. Whether or not a derogation of four years would be to our total advantage is questionable — certainly it would be advantageous — but if it can be achieved that would be a significant step. Nevertheless we should examine the levels of milk production and endeavour to equate them taking into account our unique geographic position. If the Common Market is to survive, if it is to advance the concepts on which it was founded originally — which were to help and support the less well-off nations — then surely we come into that category. Under no circumstances can we accept a situation that would in any way diminish our level of profitability in agriculture.

Another matter detrimental to the development of agriculture is the high level of prevailing irregular interest rates. In Germany, Holland and other European countries there are low interest rates obtaining. We have introduced interest subsidies and rescue packages for our farmers who over-borrowed. They have been successful to a point in that the Government of the day allowed the banks to control those interest rates. But the banks have crucified farmers who borrowed, invested, on advice. Interest rates have risen and certain farmers have been crucified as a result. Even those whose farms are still viable are being discouraged and being asked to sell land. Surely we cannot tolerate that in the case of those who have always worked on the land and know no other way of life. Some banks have been reasonable, but others unreasonable in their approach to farmers. There is a long-term investment in farming to the advantage of the economy. If a farm's viability is assured a subsidy should be given in the nature of low interest rates, having regard to the level of added value to be derived by the economy.

Inflation has been a major bone of contention, but happily we are taking steps to reduce it. Unless we can keep down the level of inflation, we cannot compete with our European neighbours.

Last year, food imports amounted to £700 million to £800 million. We have the CBF and Bord Bainne and we are now talking about a central potato marketing board, for which money has been provided in the current budget. It is so vital that Bord Bainne adopt the correct approach, otherwise we cannot survive in the dairy area of agriculture. The dairy industry is going through an extremely difficult period at present. There will not be confidence in that industry until a favourable solution, or at least an indication towards that aim, is found.

We are becoming too reliant on interventions. With all the surpluses and the cost to the taxpayers, whether to the European Fund or to the Common Agricultural Policy, the stage will be reached when that level of subsidisation cannot be maintained. In the past, surpluses were reduced because of devastating wars, but I certainly do not wish that situation to arise again.

There are jobs in agriculture, provided that the proper research is made. However, there do not appear to be the numbers of jobs anticipated when we entered the Common Market.

I applaud the efforts made by Bord Bainne to date. Without their expertise, we would not have achieved the present productivity in the dairying industry. However, much more remains to be done. I also applaud Bord Bainne because they are working within their own wealth growth. They are not depending on the State, even though the State guarantees them. They are able to operate within the growth of their own assets and borrow on that basis. There is a long, difficult road ahead for the dairying industry and under no circumstances should we accept the super-levy. If the Minister fights the EEC on that proposal, he will have the support of all.

I am glad of the opportunity to speak on this Bill. Yesterday and this morning many Members spoke at length about the importance of the dairy industry to this country. Bord Bainne, as the marketing agency for the industry, have over the last number of years played a very important role in the marketing of dairy produce. Many speakers have emphasised the importance of this industry to the well-being of our economy and this is something which cannot be overstated. That industry can generate national wealth, create employment in the food processing end, the co-operatives and the ancillary industries. The dairy industry has been of vital importance to the development of the economy generally.

Our existing farm structure has a predominance of small holdings and with good and prudent management many farmers have managed to rear their families on relatively small holdings and have become involved in milk production prior to and since our entry into the EEC. The farm family unit has been an integral part of milk production for many years now.

This could well be an ideal opportunity to examine the evolution of the dairy industry generally since our entry into the Community. At the time of entry, with hindsight, we may not have been in the right state of preparedness to take advantage of the opportunities presented to us by membership. Those markets were then undoubtedly there but, unfortunately, for historical reasons Irish agriculture was not sufficiently viable to take full advantage of those opportunities.

Agricultural development is a slow process. It needs the availability of expertise, managerial skill and the necessary finance to get on with the job of development of farms, co-operatives and processing facilities. When they realised the opportunities presented by the new market, many of our progressive farmers got on with the job of developing their holdings. Perhaps many started too late and found that they had to borrow too much at the one time. When the farming industry moved into the present recessionary period which has been prevailing for some time now, the difficulties with repayments and the attendant problems dramatically increased.

Since our entry into the Community, investment in farm development and in farm buildings has been very considerable. Significant employment opportunities have arisen as a result for the building and construction industry. The small builder whose base was mainly in rural areas benefited greatly from the investment made by many farmers throughout the country. The co-operative movement gave a very helpful and guiding hand to farmers and there have been many investments by the many fine co-operatives in existence. Their role in the development of the dairy industry was essential. The farmers were involved in the primary producing end and the co-operatives were involved in butter and cheese production and also in liquid milk. They were essential to take the produce from farms and, through Bord Bainne and other agencies, to market them for our agricultural industry.

The development of rural Ireland has been an integral part of agricultural development generally. The small, medium and large holdings have worked together and have dovetailed with the commercial community in towns and villages throughout the country in a collective effort towards developing rural areas. That development process really took off since our entry into the EEC with the money that flowed from increased production and from the increased prices available from the produce which made a very significant contribution to development. I sincerely hope that that development process will continue. Perhaps we are in a valley period now but if we can sort out our difficulties the development process will take off once again.

Many young people are employed by the co-operatives and ancillary services generally who in years gone by would, unfortunately, have been forced to emigrate. They found relatively secure, stable employment at home and were able to settle down in their home environment. The house building industry and the communities in which they lived benefited as a result. They were part and parcel of the new development process that was revitalised with our entry into the EEC not alone in the dairy industry section of the agricultural industry but right across the whole spectrum of agricultural production.

The prospect of the super-levy being imposed on the dairy industry here and the threat that that poses to the farming community and the economy generally cannot be overstated. Many people have become aware of the over-production which was taking place in the Community. There was a restricted market for the ever increasing level of production. As a relatively under-developed member state, we were lagging behind the more efficient producers in the Community. The dairy industry had begun to expand on the basis of imported substitute cereals. The importation of these cereals was very much against the spirit of EEC membership. Perhaps it is unfortunate that the proper mechanism which would have been necessary to discourage this importation which was and is creating the imbalance in the Community and which threatens the long-term prospect for a viable Community, was not introduced earlier. Perhaps as a young and small member of the Community we had not got the necessary clout to convince the other states that in the longer term the extra production as a result of importation was gradually but surely undermining the foundation of the Common Agricultural Policy and the dairy industry generally. It has long been recognised that an increasing national cow and beef herd and better methods of grass production were the passports to greater prosperity. If we analyse the employment figures here, we can see that a very large percentage of our working population are directly or indirectly involved in the agricultural industry. If the stagnation that would set in as a result of the imposition of a super-levy should have an effect on the opportunity for increased employment levels by greater and more efficient methods of production, it would be very serious indeed.

As many other speakers said, the vital importance of the dairy industry to the overall development of our economy cannot be overstated. The employment prospects of many of our young people, whether they live in urban or rural areas, could well be blighted by the advent of a super-levy. I believe that with the proposals for the super-levy, the prospects for the expansion of our national cattle herd would be seriously affected. The beef industry is interlinked with the dairy industry. Dairy farmers sell calves to other areas where stores are produced, they develop into beef cattle and perhaps later on some of them are exported on the hoof. The close relationship between the dairy and beef industries inevitably must have a knock-on effect on beef production if a super-levy is imposed. It would also affect the very important source of export material in our meat plants which is so vital for employment and also to keep our balance of payments at the proper level.

All in all the future appears to be bleak. The dairy industry and the integrated development from the cow in the field to the market place has brought about an economic and social revolution in rural Ireland. If stagnation were to set in, its impact would be tremendous. Expertise in dairying resided very much in the southern part of the country. In latter years milk production in the northern half of my constituency and neighbouring constituencies took off. When people recognised the potential they moved in. It takes time and experience to build up the know-how so essential for success in that area.

The agricultural advisory services and the co-operative movement spread throughout the land as a result of that expansion into virtually every county in Ireland. The ancillary services and the attendant employment for many of our young people grew along with the dairy industry. Important employment opportunities were created. If there had not been an expansion in the dairy industry employent opportunities would not have been created. Many people who thought they were in secure and stable employment must feel threatened. It would be very sad if they were to be added to the unfortunately increasing list of unemployed. There was a time when people from rural Ireland with no prospect of employment at home took the emigrant boat and went abroad. That option does not exist any longer.

The Coalition Government and the Minister must realise that a great weight of responsibility rests on them. The dairying industry has made an important contribution to our balance of payments and to employment opportunities for our people in the ancillary services, the advisory services and the co-operative movement. Their future depends on the outcome of the negotiations on the super-levy. Many people negotiated house mortgages on the basis that they had secure stable employment for many years to come. Unfortunately the picture has changed.

The super-levy will threaten the basic fabric of our community if we allow it to be imposed. We cannot allow the other member states to impose it because of overproduction and imported cereal substitutes from outside the Community. One third of the dairy needs of our neighbour, Britain, are being supplied by New Zealand and that country is certainly outside the Community. In the negotiations the British have succeeded in maintaining an inflow of dairy products from New Zealand. Britain is the nearest market place to us. Having regard to transport costs and so on those market prospects should favour us. That market is being taken up by New Zealand dairy products. It would be very unfair if a small open economy like ours were to be penalised and the New Zealanders were allowed to market their dairy products within the Community to the exclusion of ours.

Going back to the early years of our membership of the Community, State and Community investment in the dairy industry was an indication of the confidence the Government, the Commission and the other agencies involved had in the future of the dairy industry. A colossal investment was made. We were the victim of a British cheap food policy in the past and because of that expansion and development in the agricultural industry was retarded and inhibited, The wherewithal was not available to enable us to reach the state of development we should have reached. The investment made after our entry into the Community was essential to put us on the road to prosperity.

Investment alone does not guarantee success. It takes time to develop expertise and experience. We were not sufficiently geared to take advantage of the opportunities which presented themselves on our entry into the Community. The Farm Modernisation Scheme was the guiding vehicle for investment by farmers in their industry. It is easy to be wise in retrospect. Perhaps because of the structure and the land tenure of our holdings the rate of development was not sufficiently fast to enable us to expand our output and production. The Farm Modernisation Scheme did not have the effect it was intended to have, perhaps because of our small holdings and a lack of capital. Many of our farmers were getting older. Quite a few of them were unmarried and unwilling to commit themselves to the effort and the investment needed. It is unfortunate that we were not in a position to take advantage of the opportunity which presented itself to us.

In the main the investment I speak of was financed on the basis of long-term borrowings. Loans were negotiated on the basis of what appeared to be future prosperity. Undoubtedly things have turned sour. Tens of thousands of farmers find themselves in financial difficulties today. Investment decisions taken on the advice of their agricultural instructors, bank managers and managers of other lending institutions, appear today to have been unwise. If the super-levy is imposed many people will regret having made those decisions.

The development of the co-operative movement has been strongly linked with the development of rural Ireland. Many co-operatives began with four or five employees and then expanded, giving increased employment. I compliment the men of vision who started the co-operatives before the prospect of entry to the EEC opened up new markets. We owe a debt of gratitude to the collective togetherness of those who formed the co-operatives. People who found employment there were enabled to settle down in their own environment instead of taking the emigrant ship to Australia, America or Britain. It would be an unfortunate day if the people who took the decision to stay at home were directly affected by the imposition of the super-levy on the dairy industry.

The dairy farmers who expanded their enterprises are not to blame for the dilemma in which we find ourselves. The level of milk production per cow lags far behind the production levels on other member states. In the current depressed environment it is difficult to imagine farmers taking decisions to improve management, to improve grass production, to better their expertise or to take decisions regarding cattle breeding. It is difficult to imagine them having the heart to take those decisions in the light of the threat to hold our production levels at 1981 figures. Milk production comes mainly from small holdings having herds of less than 30 cows. It would be unfortunate if small farmers were to be put out of business because of factory-type dairy units on the Continent. The Minister and the Government must bear in mind all these factors on negotiations on the super-levy. The social implications are horrendous. We have not the opportunity to provide alternative employment for people who would be cast out of their small holdings.

I referred earlier to the fact that New Zealand is supplying one-third of Britain's dairy produce needs. This might be an opportune time to ask why this is being allowed. Why has Britain obtained such exemption? On entry to the Community the position regarding dairy products was a prime consideration. New Zealand was given time to look for alternative markets but Britain has succeeded in ensuring that New Zealand still retains its access to the market place. If that market place were available for our dairy products or those from mainland Europe it would be very useful, especially at a time of overproduction of dairy products in the Community. Is it the case yet again that we are to be the victims of Britain's cheap food policy which for too long prevented the development of our nation? Our state of development was such that we were unable to take advantage of the opportunities which presented themselves on our entry to the Community.

These are the considerations the Minister must keep in mind during negotiations of the super-levy. Will it be a case of shutting off too many valves to the heart of our economy? The Minister for Agriculture must bear a great weight of responsibility. The implications of insufficient political clout and know-how in the negotiations are too great to be lightly dismissed.

The importance of a proper co-ordinated breeding programme cannot be overstated. The quality of our stock has been improving all the time. This is an area which has not, perhaps, been getting sufficient emphasis. Is an adequate amount of money being made available for research? Have the efforts of cattle breeding associations been sufficiently co-ordinated to ensure the importation of new bulls to improve our herds? This may be an opportune time to examine their position and consider the possibility of making further moneys available to them.

When we think in terms of increased production we must recognise that diversification of our products is essential. This is a theme on which many speakers have dwelt at length. We need to do something about diversification immediately because there seems to be a reaction against dairy produce.

I would like to refer to section 84 lending and the effects this will have on the financing of the co-operative movement. The withdrawal of this in the budget was a serious mistake and its effects on co-operative investments will be significant. If there are further interest increases because of its withdrawal, this will have to be passed on to farmers. It is very unfortunate that the Minister for Finance felt that this lending scheme should be cut off. I have covered most of the areas in relation to the dairying industry and its importance to the development of our economy, the impact of the super-levy and areas we could look at to increase production and expand output.

There is one thing which involves difficulty for people involved in the dairying industry alone. Reference has been made to disease eradication, not alone the cost to the Exchequer but the dramatic impact on many of our dairy herds as a result of being infected by disease. There are many people who committed themselves and their families to building up dairy herds and found that when brucellosis or TB suddenly struck their lives were in ruins. I believe we are making progress in relation to the eradication of TB and brucellosis. When we consider the threat of those diseases the possibility of having two-enterprise farm holdings instead of all the eggs being in one basket should be considered in the context of the Farm Modernisation Scheme. There is a total commitment, in many cases throughout the country, of the farmer and his family to the output from their farm. Some of those people when their herds are affected by brucellosis and TB have absolutely no income.

I believe we should encourage the two-enterprise farm to minimise the great hardship causes by dairy herds having to be slaughtered because of disease. The two enterprises on any farm holding would have to complement each other. For many years the dairying industry and the pig industry went hand in hand on farms. In recent times pig production has tended to be in the hands of large units with a reduction in the number of people involved. I believe the passage of time will prove that this is not to the advantage of the industry generally. When there is a 500 or 600 sow unit in one area, even if the management and control are good the risk of disease lurks around the corner. When disease strikes in a unit like that the impact is traumatic. If we had small pig units to complement dairy production on small and medium sized holdings we would overcome many of the problems which have arisen in relation to the large pig production units.

The availability of the by-products of the dairying industry for pig producers is very important. Cereal costs have risen steeply in recent years and many pig producers are in financial ruin now. Those engaged in processing for the pig industry will find themselves well under full capacity before this year is out because of the number of pig producers who have gone to the wall. This is a very unfortunate development. I would like the Minister to consider giving greater encouragement to people to set up small pig units on their smallholdings and making larger grants available to encourage this development.

I appreciate the Deputy's concern but he is moving slightly away from the terms of the Bill under discussion. I appreciate that there is relativity between dairy production and pig production but I would like the Deputy to go back to the Bill.

The relationship between the two is very important and I am quite sure the Minister will accept that there should be a very close link between them. I was about to deal with the question of dairying by-products being made available to pig producers. The convenience of pig producers to creameries and co-ops is very important in relation to having the by-products available to them. It is important that this is looked at to ensure that every possible benefit is channelled back to pig producers. I will not say any more on this matter, although it is a very broad subject and its importance cannot be overstated. However, there are other speakers who wish to get in. With regard to the Minister's negotiations on the super-levy, I look forward to a complete derogation for Ireland. I look forward to Bord Bainne, who have done very fine work in the past, being able to play their part in the future, particularly in relation to diversification.

Like the other speakers I welcome the extension of the guarantee to Bord Bainne. We are all very proud of the great work they have done in the past. They have a worldwide reputation in regard to the marketing of our dairy produce. We all hope they will continue to do this work particularly when we read about the massive imports of dairy produce. I believe that giving the extension of the guarantee is showing our confidence in them.

The IDA carried out a study on supermarkets throughout the country. I will not go into the merits or demerits of supermarkets. The figure given for food imports in 1982 was £750 million. That study pointed out that 70 per cent of those imported products are in direct competition with products already made in Ireland. Those imports include dairy produce. It is important that we look at our food industry when we talk about the great work An Bord Bainne are doing. The study stated that Irish producers could take a 25 per cent to 50 per cent share of the market currently held by imports under all of these categories and it identified 30 new consumer food ideas.

Many speakers here today and yesterday have spoken about the dairying industry and the thing that concerns all of us, the threat of the super-levy. The proposal to restrict our output to the 1981 level is the most disturbing announcement that we have heard on the super-levy. Also important is the proposal to have a flat rate of 75 per cent of the target price. That second proposal if implemented would be catastrophic for our dairy farmers, particularly small farmers, when the yield per cow for this country is lower than in Denmark, the Netherlands and other countries and the price paid to the Irish farmer is lower also. As other speakers have said, our contribution to the milk mountain is very small. I hope the Minister will continue to fight against the use of the cereal substitutes that other countries are allowed to get. When we see the British Government banging the table and making so much noise looking for what they call their money while at the same time importing butter from New Zealand, we must see that this whole area is exposed by our Government and particularly by our Minister.

ACOT have published a survey referring to the serious impact of cutting back on milk production here and they have stated that the total quantities of milk delivered to processing plants was expected to rise from 964 million gallons in 1981 to approximately 1,116 million gallons at the end of last year. That increase is in the region of 16 to 18 per cent, and assuming a price per gallon of 70p and relating that to 1981 levels, you are talking about a fall in value of milk output of about £99 million. That shows how serious the problem is. We hear a great deal of talk about people getting out of dairying and going into other enterprises. That is fine for the experts and people who have all the theory, but the business of dairying yields a far higher return per acre than does any other enterprise, particularly in the west where holdings and cow herds are small yet people have been able to make a living from the dairying enterprise.

I would like to say a few words about dairy farmers who have been in financial difficulties. In 1983 the ACC sent receivers into farms and one farmer was in gaol because of farmer debt. I put it to the Minister that this problem was being recognised by the EEC in 1982 when an EEC interest subsidy of 5 per cent was allowed, and also by the Government who in 1982 brought in a national interest subsidy. This point must be hammered home by the Minister and the Government at EEC level. ACOT have given figures which show that of the 4,500 farmers in the rescue package two-thirds — 3,000 — are in dairying. These farmers are planning to increase their output by up to 50 per cent and they will be hoping to have a five- or six-year period to do that. They are working with their ACOT advisers to get themselves out of financial debt through expansion of their dairying business.

If the super-levy is to be introduced on a 1981 base, farmers who are working with their advisers to get out of that farmer debt will suffer very grave loss indeed. They will be in a very bad financial situation. The total indebtedness of the dairy farmers covered under the rescue package is approximately £200 million and in many cases the dairy farmers have debts equivalent to about £1,000 per cow. Seen in the light of these figures the consequences of the super-levy are almost too terrible to contemplate.

I ask the Minister to consider some of these points and especially to realise that the British Government seem determined to dismantle the CAP, and when that policy and the dairying industry are so important to this country that attempt by the British Government must be resisted at all costs. The EEC seem to be trying to give global treatment to this problem which was created by certain countries. I cannot agree with proposals that have been made to deal with it.

Regarding the consumption of milk, the dairy council have done very good work and it is encouraging that milk has been launched in our Dail bar, whatever about other bars throughout the country. The school milk scheme should have been more successful. Speaking to teachers and parents concerning this scheme I have been disappointed at the presentation of milk which in many cases has not been done very well. I am disappointed also that the Department of Education have not been more involved in this scheme. In larger schools perhaps one teacher could be given responsibility for administering the scheme within a school. I am concerned also about the scare-mongering about antibiotics in milk which has led to a general drop in milk consumption. The Minister has introduced measures to deal with defaulting suppliers of milk to creameries and co-operatives and there will be penalties in future for persistent defaulters. I am surprised that an effort is not made to look at the primary reason for the use of antibiotics. When replying I hope the Minister will give the House some information on the measures being taken to control mastitis. I am aware that ACOT deal with this as a matter of importance. I suggest that that organisation arrange intensive courses dealing with mastitis control.

Another aspect I should like to deal with — it is outside the control of farmers — relates to the withdrawal time for drugs. For example, if a product states that milk should be withheld for 48 hours after the drug has been administered, how sure can a farmer be that in the next milking after that period his milk will be free of antibiotics? What results have been obtained, if any, from the testing being carried out by An Foras Taluntais and the veterinary college? When we have a good product like milk we should do everything possible to ensure it is up to standard. I noticed recently that creamery lorries and vans in the west carried signs to the effect that the milk was antibiotic free. I also noticed that some cartons stated that the milk did not have any antibiotic residue. It is sad that we have reached the stage that such information has to be printed on milk cartons.

I should like to deal with the options for extra production by our farmers, particularly our young farmers. One matter that militates against small farmers is the difficulty they have in getting extra land. I was glad to hear the Minister of State say that a Bill on land leasing will be introduced next month. Access to land by young farmers is important. I was disappointed that the Minister for Finance in the budget did not provide any money for land leasing. I hope the Minister for Agriculture succeeds in getting money for this because people will be asked to pay high rents for such lands. The question of land leasing, and the group purchase of land, has been with us for many years. The Land Commission do not get involved in the group purchase of land. They give technical assistance to farmers only after they have purchased land. The permission of the Land Commission, or the Minister, is not necessary but I am concerned that when group purchase schemes break down, as they often do, the Land Commission are not prepared to intervene on behalf of small farmers so that they can increase production. It is disappointing to note that only £1 million has been allocated for acquisition and division of land in the Estimates. It is obvious that that money will be spent on land division with the result that there will not be any money for land acquisition in 1984. It is important that those involved in the dairy industry get land from the Land Commission.

I was disappointed that the EEC are not disposed towards helping us with our farm modernisation scheme which was restored recently. With the benefit of hindsight it is obvious that it was a mistake to suspend that scheme last February.

The Deputy has dealt with land leasing and is now referring to the farm modernisation scheme. They are relevant topics but I would prefer if the Deputy dealt with the provisions in the Bill.

I am anxious to make the point that the western agricultural package is not geared for dairying. I hope the Minister will ease the uncertainty about the farm modernisation scheme when replying. I hope the Minister is aware of the problems of dairy farmers with regard to the cost of inputs into farming, the cost of manures and feedstuffs. We cannot have subsidies for inputs into farming and the Minister should consider giving special treatment to the many areas that have been left out of the scheme for severely handicapped areas. If extra headage grants were given to such areas in the west they would be a great incentive to farmers.

The Deputy is moving away from the terms of the Bill.

I am anxious to explain the problem in relation to the cost of inputs.

The Bill deals only with the dairy industry. I appreciate that that covers a wide field but the Deputy has wandered a lot. He should confine himself to the provisions in the Bill.

The cost of inputs for the dairy industry has increased in recent years and in the absence of a subsidy the Minister should seek extra money from the EEC for headage grants. In Galway two-thirds of the land is not included for such grants and the Minister should seek to change that position so that those farmers can cope with the increased cost of inputs for dairying.

I hope the Government will recognise that farmers work seven days each week. The dairy industry should be expanded and, with that expansion, farmers should be rewarded for their work. I am concerned that the farm modernisation scheme will not prove as suitable as we thought it would for dairy expansion. I should like to compliment Bord Bainne on the works they have done for the diary industry. I hope they will be successful in the future. They deserve the praise of all Members and an extension of the guarantee outlined in the Bill.

I should like to thank the Members who contributed to this extremely wide-ranging and interesting debate. I note that the Bill is being supported by all sides. That is as I would expect given the importance to the industry of the role of An Bord Bainne. In all 14 Members contributed to the debate and I heard excellent contributions from both sides. It is unfair to single out a particular speaker when complimenting Members because all contributors were good but Deputy Joe Walsh made an outstanding, educational and well thought out speech. I accept that he is possibly the Member who is best acquainted with the industry.

Debate adjourned.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.
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