I move: "That the Bill be now read a Second Time".
The main purpose of the Bill is to give legal effect to a decision taken last year to dissolve An Chomhairle Olla. The Bill also provides for the continued implementation by my Department of the statutory functions of the Wool Marketing Act, 1968, in relation to licensing and registration of premises.
The provisions of that 1968 Act, including the establishment of An Chomhairle, arose directly from the recommendations of the Committee on Wool Improvements. This committee, on which appropriate interests were represented, reported their findings in 1966.
The main functions of An Chomhairle were to advise the Minister for Agriculture in relation to the fixing of grades of wool, apply standards in relation to the registration for the register of wool buyers and, in consultation with the Minister for Agriculture, to fix a code of practice to be observed by wool exporters.
An Comhairle was funded by an annual grant-in-aid, provided by the Oireachtas, which in the last three years averaged £100,000 per annum. Membership comprised a chairman and 11 other members representative of the trade and producers. Four of the staff of An Chomhairle were seconded from, and paid by, my Department. The remaining member, a specialist in wool grading, was employed directly by An Chomhairle on a daily fee paid basis.
Before An Chomhairle were established there was no standard system whereby wool was purchased on a graded basis, nor, indeed, were there any set standards in respect of buyers' or exporters' premises where wool was stored prior to export. There was a need, therefore, to improve the image of Irish wool especially on export markets. The main provisions of the 1968 Act, together with the principal related functions of An Chomhairle, provided for the proper grading and presentation of wool for sale, the registration of wool buyers and the licensing of wool exporters. On the recommendations of An Chomhairle, regulations were made by the Minister for Agriculture setting out minimum standards in respect of these matters. These regulations will continue to be implemented by my Department. The inspection of buyers' and exporters' premises, heretofore carried out by officers of my Department on behalf of An Comhairle to ensure that standards are maintained, will be continued on a regular basis.
As part of the measures taken to reduce Exchequer expenditure, the Government decided, in February 1983, to dissolve An Comhairle. Here I would like to emphasise that this decision should not be interpreted in any way whatsoever as a reflection on An Chomhairle's performance. I pointed this out at the time to the members when I wrote to them apprising them of the dissolution. I am satisfied that, due in large part to the activities of An Chomhairle, the marketing of wool is now in a much healthier state. As a result of these activities, Irish wool enjoys a very high reputation on world markets and commands a higher price per lb. on these markets than comparable types of New Zealand and British wools.
Total wool production in this country amounts to 13 million lbs per annum made up of 5.2 million lbs Galway wool, 3.7 million lbs Blackface Mountain, 2.9 million lbs Cheviot and halfbred and 1.2 million lbs other types. The value of the national clip to producers is estimated to be worth in excess of £11 million a year. This represents a significant contribution to farm incomes. Over 70 per cent of the Irish clip is exported, 65 per cent of which goes to Great Britain. The percentage of wool exported to Great Britain has been declining over the years as new markets were opened up, particularly in Europe and Eastern bloc countries. Exports to France and Belgium have shown significant increases. Czechoslovakia and Poland have been the main outlets in Eastern Europe but exports to that area have declined in recent years.
The EEC is not self-sufficient in the production of sheep meat and, because of the application of the CAP to that commodity, I anticipate a substantial increase in our national flock, with a consequential increase in wool production.
All in all, therefore, I am satisfied that the wool industry has been placed on a sound footing. I am confident that the 79 licensed exporters will continue to seek out new markets, that the 303 registered buyers can effectively handle any increase in production and that the producers will continue to provide the high quality product which the market place demands. A continuation of the successes already achieved will, of course, depend on the willingness of both traders and producers to observe the statutory requirements. I am confident, however, that in co-operation with my Department, traders and producers can maintain progress.
Nevertheless, whilst the budget for An Chomhairle was a relatively modest one, I feel that members of the House will appreciate that, in the current financial situation, any scope for cutting back on Exchequer expenditure cannot be overlooked. In recent years, a high proportion of An Chomhairle's grant was spent in highlighting the need for clean wool presentation by means of fleece displays; in conducting training courses in wool grading and sheep shearing and subsidising sheep shearing demonstrations at shows throughout the country. Expenditure was also incurred on press advertisements and display posters and promoting wool end-products through fashion shows, etc. All of these activities, whilst useful, are minor in the context of the Wool Marketing Act. The main intentions of the Act and the corresponding principal functions of An Chomhairle have long since been implemented, and expenditure on An Chomhairle's recent activities cannot be justified in present circumstances.
I regard the monitoring of world trends as an essential service to the industry. It provides up-to-date information on trends and prices and guarantees a fair return to producers in line with world trends. The market intelligence service will, therefore, be continued on a regular basis by my Department — as, indeed, it has been since An Chomhairle ceased to function.
The four officers seconded from my Department have now returned and three of them have been assigned to other duties. The fourth is assisting in implementing the statutory functions of the Act. No additional expenditure has arisen for my Department. Indeed, staff savings have been achieved through the more effective use of the returned staff. The wool grader employed by An Chomhairle has been paid his statutory redundancy entitlements and I understand that further claims he has made are under negotiations. Also, I am informed that he has secured outside employment in the industry.
Apart from giving legal effects to decisions taken involving the dissolution of An Comhairle, the Bill contains safeguard clauses in regard to creditors and other claimants of An Chomhairle. These are included in Article 3 which provides, in general, that any outstanding debts will be discharged by the Minister for Agriculture, and that every contract entered into in force between An Chomhairle and any person shall continue in the name of the Minister.
Article 4 provides that a final account of all moneys received and expended by An Comhairle from 1 January 1983 to the day on which the last liabilities are discharged shall be prepared for audit by the Comptroller and Auditor General prior to its presentation to both Houses of the Oireachtas.
For many years the wool industry was the poor relation of Irish farming. This was true in the thirties and forties and even into the fifties and sixties. It was only when we got the CAP facility in relation to sheep that Irish sheep farmers managed to earn a respectable living and get a reasonably good gross margin from sheep production. Almost two-fifths of our sheep are raised in my county. Were it not for our entry to the EEC and the facility for sheep meat, our industry would be in a dreadful state. We now expect a 6 or 7 per cent increase in the number of breeding ewes this year. This is particularly welcome because there is a shortage of sheep meat produced within the EEC. It is one of the very few commodities in this category, and this gives us a chance to increase production in an area where there is not already overproduction.
Wool has always been an important consideration for the sheep farmer. It is worth £11 million to the Exchequer, a lot of money by any standards. From 1968 onwards a brave and successful attempt was made to adopt a strategy whereby wool was presented in a light which would allow us to obtain the best possible price. Traditionally our chief market has been in Britain but now that market is declining. Every sheep farmer, buyer or exporter knows that what happens at the sales in Bradford and other such centres has a profound effect on prices. These prices can fluctuate overnight, and for many years this has been a great problem. It has been very difficult to get a wool marketing strategy and a sales pattern that would give any guaranteed price. No country has been able to achieve this. It is the nearest thing to shares on the Stock Exchange that I have ever come across.
It is important that market intelligence about the workings of the main wool centres in Britain be transmitted to Irish farmers and the wool industry generally. I am aware as a farmer and politician that one of the most important aspects of the work of the Wool Board was their ability to transmit information about what was happening at international level. On many occasions I listened to the radio at 6.20 in the evening to hear about the wool price in Bradford. This information is parallel to the market reports by Michael Dillon from marts and factories around the country. That service will continue. The officers dealing with it in my Department will make sure that this intelligence will be available to farmers. When a farmer decided to sell wool to his local buyer, usually a multi-purpose operator, it goes on to the central wool board and then to the world sales, particularly at Bradford and Edinburgh. The method by which this is done means we are up to date with prices obtaining.
When the Wool Marketing Board were first established our wool was extremely badly presented. In many instances sheep were shorn on grass without any shearing boards and there was very little evidence of efficiency. We could not blame farmers because in the past there was not a great differential in price between the clean wool and that which was badly stored and presented for sale, so the farmers obviously wondered why they were going to all that extra trouble.
The Wool Marketing Board which I must compliment on its work, was broadly an educational venture throughout the country. I had the pleasure, on a number of occasions, of organising the All-Ireland Macra na Feirme sheep-shearing finals and in the early seventies from 6,000 to 8,000 people would see fit to congregate at those displays to see how the job was done properly. A great educational job has been done in this respect. There are other very important aspects which have to be noted one being the conditions under which the wool was stored in the buyers' stores prior to export. Until the Wool Marketing Board came into operation, sheep farmers did not bother unduly about the handling of wool and wool is a commodity needing expert handling to arrive at the various grades. At a time when there was so much competition between synthetic fibres and pure wool, it was extremely important that we had trained wool graders available around the country to show the difference between wools of good and inferior quality. It would not be appropriate for me at this stage to go into the various wool grades, but this needs very in-depth research, including as it does research into the different types of wool needed for different types of clothing and other commodities.
I believe that every Irish sheep farmer knows all there is to be known about the production and presentation of good, clean wool to the buyers. However, that does not mean that he will get a good price. Because of the general depressed wool trade all over Europe for many years, many sheep farmers whom I have met have said that, unlike any other commodity, they are just not paid for the type of wool that they are producing. The sheep meat trade is allied to the Common Agricultural Policy, but wool production has no guaranteed price whatever and we are in competition with sheep farmers everywhere.
The fundamental principles towards which the Wool Marketing Board had been set up have been achieved. I am delighted to be able to say here that for the last two or three years the sheep industry has been given a boost which it never got before. At the moment, Irish lamb in our marts and our factories is doing extremely well. Last year was one of the best sheep years, helped by the EEC ewe premium to Irish owners of good breeding stock under certain conditions. For this season already, £5 per head has been paid on every ewe and for the second half of this year it is likely that £7 or £8 will be paid. Also, there are all the headage grants and grants to disadvantaged areas and the £9.50 ewe-hogget scheme. Everyone in the agriculture industry will appreciate that, at the end of the day, it is the price which the product makes in the market or in the factory on the day of the sale which counts.
There are all the appearances that this year is going to be a good sheep year. I hope that it is not by chance that on this very day our wool price, depending on the type of wool involved, is approximately between 7p and 10p a lb. dearer than on this day last year. How long that will last is another story. We shall be maintaining a very close scrutiny of all wool buyers' export premises. The agricultural officers in my Department will ensure that these premises are up to national and international standards. Market intelligence regarding the pricing mechanism on the major world wool centres will be transmitted through the national media as heretofore. This and the general increase in profitability of the entire national sheep flock, have brought about an increase in sheep numbers when for many years they were decreasing. It is now paying our farmers to get into the sheep producing business, and the only time one will ever have that in any production line is when people genuinely believe that they will make money out of it. That is what any normal business man would do. For the last three or four years, sheep rearing is a real alternative under many conditions. I sincerely hope that the wool price will be maintained, but it is a little like the stock exchange.
It could be argued that not much money was involved here but, at a time of great economic stress, when every penny must be put to the most productive use, we must be geared towards production. Up to now, because of the problems in the wool business, it has been very important to put our resources into ensuring that we have products which will obtain the best possible price against all comers, not alone in Europe but all over the world. I believe that we have arrived at that point. What we must do now is ensure through the negotiations in Brussels, that we maintain a very high profile for our sheep farmers. The future looks good for the sheep industry. I have a very deep, personal interest in sheep farming, because of my background. The Wool Marketing Board has ceased to operate but because of the good work done by that board I sincerely hope that it will not now be missed. I pay tribute to the various chairmen and members of the board who have served the sheep industry loyally down through the years. I reiterate that it was no reflection whatsoever on their expertise that the board was disbanded. If we maintain the present trend, our sheep farmers will achieve the success which should have been theirs for many years.