That a sum not exceeding £252,304,000 be granted to defray the charges which will come in course of payment during the year ending on the 31st day of December, 1985, for the salaries and expenses of the Office of the Minister for Agriculture, including certain services administered by that Office, and of the Irish Land Commission, and for payment of certain subsidies and sundry grants-in-aid.
A motion for a token Supplementary Estimates will be moved at the end of the debate. I shall be referring to this again at a later stage.
Notes on the main activities of my Department have already been circulated and will, I trust, be of assistance to Deputies. The agricultural sector has experienced a significant improvement in its fortunes over the past three years. In the very exceptional year of 1978 the different factors of prices, weather and market conditions combined to give a uniquely favourable result for farmers and the agricultural sector generally, but this was followed by several years when these factors resulted in particularly difficult conditions. By 1981 net farm output and incomes had fallen sharply. The average farm family income in real terms had fallen by over one-third, and in fact was at a level below that which had prevailed at the time Ireland joined the European Community almost ten years earlier. These were very difficult times for Irish farmers, particularly because they followed years which had fulfilled the expectations of the benefits that would follow from membership of the EC.
Since 1981, however, there has been a major improvement in the situation. Output and incomes have recovered. Net farm output last year was 16 per cent above its 1981 level and was in fact 5 per cent above the spectacular year of 1978. The average income of farm families recovered and was some 20 per cent higher in real terms than it had been just three years earlier. Over this period when real incomes outside agriculture have shown no significant improvement, the position of farmers and their families has made a recovery that has been far better than many of the experts had forecast.
The increase in farm production contributed to the major improvement in our trade balance which occurred last year. It is estimated that agricultural exports in 1984 reached a total of £1,620 million — an increase of some £250 million on the previous year. This growth came largely from an increase in the volume of exports, particularly dairy products, the improvement in prices being relatively small. When combined with estimated FEOGA guarantee receipts of some £650 million the contribution of farm exports to our balance of payments position last year was close to £2,300 million. This is a record in both value and volume terms. The increase in earnings of foreign currency from agricultural exports is particularly welcome because of the low import content involved. In other areas where exports were also buoyant over the past year, the benefits to the economy were partially offset by the extra imports that were required to produce the goods for export.
I should perhaps express a word of caution about the substantial progress that has been achieved in the agricultural sector over the past three years. Particularly since we entered the European Communities, the agricultural sector has been subject to periods of growth followed by periods of stagnation and decline. We need to achieve greater stability in the sector, so that longer term planning at farm level can be undertaken with greater confidence. There is increasing difficulty in maintaining the momentum of price and other improvements in Brussels. If we are to live with greater stability in prices under the Common Agricultural Policy, then not only must we reduce inflation still further, but we must also improve efficiency by reducing the volume of purchased inputs required to generate the level of output at farm level.
Every farmer must look again at the way his own farm business is run. In recent years we have seen a welcome trend towards more efficient use of farm inputs, but this can and must be pursued further if the farm sector is to maintain its present level of prosperity. In the light of the problems we have to face in regard to the prices and marketing of our products, we must aspire to more efficient production of quality farm products designed specifically to meet the needs of today's market. This is not a new idea, but it is one which grows in urgency as year follows year. The Government will, of course, do everything possible to encourage greater efficiency but it is only when this is achieved on the individual farm on a nationwide scale that the benefits will become really evident.
Turning now to EC aspects, discussions on the Commission's price proposals have been going on in the Council of Agriculture Ministers since February. So far the Council has devoted five sessions almost exclusively to those proposals. While the very limited benefits involved for the farm sector may be explained by the financial difficulties prevailing at Community level and the heavy surpluses that have developed in several sectors, nevertheless it is necessary that the fullest possible account should be taken of farm income needs. As in other years, reconciling these factors is proving to be a long and difficult process. The Council meeting in Luxembourg over last weekend continued for four days and even though no settlement resulted, there are expectations that a basis for agreement could emerge at the meeting commencing in Brussels on Monday next, 13 May. My approach has been to seek changes which would represent an improvement from the producers' point of view on what the Commission has proposed. Indeed, in the latest attempt at a compromise by the Italian Presidency, a significant improvement was provided for in regard to the level of cereals prices, which the Commission had proposed should be reduced by 3.6 per cent. In the case of milk I have made it absolutely clear that the commitment made by the Council last year on Ireland's quota level must be honoured. I do not propose to go further into details on the various product sectors. To do so could be counter-productive at the present delicate stage of negotiations, and I am sure that Deputies will appreciate how necessary it is not to prejudice the eventual outcome.
It is disappointing that the Council has not yet reached a settlement. I will be stressing once more at the next Council meeting the necessity of concluding the prices agreement without further delay. It is only natural that farmers and their organisations should be greatly concerned about this aspect. Nobody, however, would wish to settle for an unsatisfactory agreement simply to gain time. On the contrary, it is essential to have a settlement which is acceptable and fair. Delays are, of course, a frequent occurrence in the fixing of agricultural prices. In the past eight years prices have been agreed on time, that is before the end of March, on only three occasions. The average time is probably the middle of May, although sometimes it went into June.
To deal with the Estimate itself, the gross sum is £394 million, which is about £32 million or 9 per cent above the amount spent in 1984. However, a rise of about £28 million is projected for receipts, resulting in a net estimate increase of some £4 million over 1984. The rise in gross expenditure results mainly from increases under disease eradication, exchange rate guarantee, farm modernisation and market intervention offset by decreases for pay, calved heifer grants, food subsidies and EEC special measures. The increased receipts arise mainly from EC contributions in respect of farm modernisation and market intervention and also from the disease levies and veterinary inspection fees.
Of course, the gross estimate of £394 million represents only part of the much larger total amount expended by my Department. For 1984 this overall sum amounted to over £1,400 million, including some £700 million of expenditure fully financed by the EC in respect of agricultural support measures and about £350 million borrowed by my Department for intervention purchases of beef, butter, skimmed milk powder and cereals. These large amounts of EC-related expenditure provided very substantial benefit to the agricultural industry and the expectation is that this type of expenditure will be at roughly the same level in 1985.
I should now like to deal with some of the main agricultural products.
Last year was a satisfactory one for the cattle and beef industry. Cattle output increased by 3 per cent in volume terms and by 7 per cent in value terms. Exports of cattle and beef and their by-products amounted to almost £650 million, accounting for 40 per cent of our agricultural exports. For the first time since 1980 throughput at export plants exceeded 1 million head. Total slaughterings were in fact over 1.12 million, representing an increase of 15 per cent on 1983. This increase was achieved without any depletion of stocks.
More than any other element in the agricultural sector, beef is an export-oriented industry. Even though 1984 was a difficult year on international markets for the beef sector exports of beef in processed form increased by 30 per cent over the 1983 level, with a significant increase of 45 per cent in exports of vacuum packed beef. The export promotion work of CBF was of importance in these export developments.
By and large Irish producers got good prices for their cattle in 1984. Indeed for a time the Irish reference price exceeded the overall EEC average — the first time that has happened since our accession to the Community. Steer prices were quite strong. This was particularly so early in 1984 when the market was affected by heavy buying by Northern Ireland factories which at that stage enjoyed the benefit of the variable premium without any clawback on exports. Steer prices again rose sharply from November onwards because of the influence of a highly successful scheme of private storage aids.
In response to pressure by me a clawback of the UK variable premium on exports was introduced last May as part of the prices package in Brussels. This removed an anomaly which had threatened to undermine completely the competitive position of our meat factories. Northern factories had been enjoying, in effect, a subsidy on their exports and this made it impossible for our factories to compete for cattle. The people in the trade, particularly the processors, appreciate what was done at last year's price package in the beef sector. The introduction of the clawback on British beef being exported has had a very significant effect on our beef trade. It has helped not just producers but the level of employment.
I succeeded in getting the institutions of the Community to recognise the inequity of this situation and to introduce changes to restrict the operation of the premium to where it belongs, that is to beef consumed on the UK market. We have no objection to the British Government operating a variable premium within the UK. However we have an objection to their using it to subsidise exports. Thankfully that anomaly has been removed. The effect of the change was immediately apparent. As I have already said our factories achieved a throughput of over 1.12 million head in 1984 and this occurred despite the fact that the clawback was not fully operational until July.
A serious market situation arose in most member states of the Community in mid-1984. Heavy slaughterings of cows, the inevitable consequences of the milk super-levy, threatened to flood the market with beef and to depress prices to a disastrous level. A million cows over and above normal cullings were slaughtered, putting about a quarter of a million extra tonnes of beef on to an already over-supplied market. The Commission responded with a package of measures which were more imaginative and more successful in achieving their short-term aims than anything else done for the beef sector in recent years. First, export refunds on female cattle and on beef from female cattle were increased, thereby encouraging the export to third countries of some of the surplus cow beef. Secondly, intervention was made more flexible so that it was supporting whatever types were perceived by the trade to need it most from week to week. Finally, there was a new scheme of private storage aids, with a distinct bias towards exports of prime beef. This was extremely successful. In fact, it took 72,000 tonnes of beef or about a quarter of a million cattle off the market here in Ireland. In consequence of these measures Irish producers received good prices for their cattle throughout the autumn and exceptionally good prices in the November to January period.
I have described these developments because of some suggestions of an alleged cattle "crisis" in the spring of this year and of the ruin facing winter feeders of cattle as a result. Deputy Leonard raised this at Question Time recently. Prices undoubtedly fell between mid-January and mid-March, but it is important to understand the background. A number of factors seem to have fuelled unrealistic price expectations. To begin with, there were some suggestions that prices would rise to 120 pence a pound; these certainly did not originate in my Department. Second, producers may have been basing their expectations on invalid comparisons with two other periods — the spring of 1984 when prices were distorted by the absence of a variable premium clawback and the two months up to mid-January 1985 when factories were paying very high prices for scarce cattle to fill their profitable private storage contracts. It seems to me that a more orderly approach to marketing, selling cattle as they became ready, even on a gradually falling market, might have left many producers better off than they were after having held on too long.
I recognised, however, that prices had fallen significantly and that many producers had held on to their cattle in the hope of a price improvement. Accordingly, I pressed the Commission to introduce corrective measures. With Community intervention stocks heading towards a million tonnes, the Commission were simply not prepared to countenance carcase intervention but I did achieve two valuable improvements. The first was an increase in the level of live export refunds; this was designed to stimulate competition between factories and cattle shippers. The second was a new private storage scheme, which will take the equivalent of 45,000 steers off the market between mid-April and the end of May. Prices have responded to these aids and are now well off the bottom level. I hope that the switch to the purchase of fore-quarters into intervention next week will continue this trend.
A word of warning before I leave this point. No more than any of my predecessors as Minister for Agriculture, I am not in the business of making market price predictions. However, special situations should not create expectations which may be disappointed. A person who buys store cattle in the autumn must carry at least some of the blame himself if market conditions in the spring fail to match up to an unduly optimistic assessment.
This year's price negotiations seem likely to result in no great price change in the beef sector. The second stage of the price harmonisation under the classification grid should, however, provide a support price increase of about 1 per cent.
The unilateral action by Canada last December in imposing a tiny quota on beef imports from the Community was a severe blow to some of our major exporters. Canada has developed into a very useful outlet for cow beef and we could not accept that this outlet should be almost completely closed. The matter has been the subject of bilateral negotiations between the Commission and the Canadian authorities and after these had dragged on for several months and the Community had threatened to retaliate, Canada has now agreed to a quota of some 10,600 tonnes from the EC for 1985. It is no coincidence that the Taoiseach happened to be visiting the Canadian capital and meeting the Canadian Prime Minister during the week. The Commission and Canada are today discussing the details of the new quota arrangements and the Commission will have to ensure that they do not contain any unacceptable conditions. While the quantity now agreed upon is considerably better than the 2,700 tonnes originally imposed by Canada it is regrettable that our exports to Canada will in future be subject to continuing restriction.
The various measures for the improvement of the genetic merit of our livestock were continued during the year. Imports of high quality Friesian bulls and semen of proven bulls were arranged and additionally an expanded programme of progeny testing of beef and dairy bulls was carried out. Also I decided that herdowners who wished to operate do-it-yourself artificial insemination within their own herds should be allowed to do so. Only a small number of herdowners are likely to avail of DIYAI but the system has advantages of cost and convenience and I do not think that progressive farmers should be denied any opportunities to maximise efficiency, especially in the present economic climate.
Following the discontinuation of bull licensing in 1983 concern was expressed about likely adverse effects on the quality of the national herd and on our export trade. Following a report from the Cattle Advisory Committee the Control of Bulls for Breeding Bill was introduced and is currently before the House.
The Canadian Government were concerned at the export of our cow beef which dramatically increased over a period of a few years and they reacted in the manner I have just described. It is unfortunate that these restrictions have been imposed but they give our factories an opportunity to fill orders. If we did not have the increased amount there would be serious financial difficulties for a number of factories. There is a general feeling of relief that we got a reasonable compromise.
The level of milk recording in Ireland has been very low by international standards. I am glad to say that this situation is changing, particularly since the setting up of the Irish Dairy Records Co-operative which is representative of creamery co-operatives, milk boards and AI bodies. I am providing £400,000 under Subhead C1 to help to finance the reorganisation of the milk recording service. I am confident that the co-operative will continue to expand milk recording in the years ahead.
Last year my Department imported a number of top class Suffolk, Blackface Mountain and Newtown Stewart rams for leasing to selected breeders of high quality flocks under the leased ram scheme. This scheme enables pedigree breeders to improve the genetic potential of their flocks, and this improvement in turn is transmitted to commercial flocks. Further importations are planned for this year. Genetic improvement of the pedigree pig breeding herd continued under the accredited pig herd scheme. Also a number of high quality pedigree boars were imported by the Department for leasing to breeders participating in the scheme.
In the Supplementary Estimate, I am providing an additional £100,000 under Subhead C.1 in respect of livestock improvement measures. This money will be used in three ways. First, it will ensure the full utilisation of the expanded beef progeny and performance testing facilities, in particular the Tully performance testing unit. Second, it will provide increased grants to the AI centres for the testing of a greater number of dairy bulls for economically important traits such as milk yield and composition, beefing merit and ease of calving. Third, more Blueface and Border Leicester rams will be imported to expand the hill cross ewe project this year. The purpose of this project is to organise the systematic provision of more prolific ewes for lowland sheep producers. The productivity of our lowland ewes is below that of lowland sheep in Britain. By crossing Blackface Mountain ewes with the Leicester rams the resultant female progeny will have greater productivity as breeding ewes. The project, which is now in its second year, has been organised in the major hill areas but its extension to other areas is planned for this year.
Those who visited the Spring Show this week will have seen the wonderful work done in this area, not just by the Department of Agriculture but by ACOT and An Foras Talúntais. They graphically illustrated what needs to be done and their comparison of the type of lamb carcase required for the French market with that which is not required was a very worthwhile exercise. I hope that type of demonstration can be extended to the pig sector in future years as it would be highly informative.
As regards milk, deliveries to creameries in 1984 showed an increase of 5 per cent and set a new record level at 1,075 million gallons. The super-levy system has now been in operation for over 12 months. Inevitably, there have been teething problems in operating the scheme in the different member states and some changes were introduced earlier this year to facilitate the administration of the system. The most useful of these amendments for Ireland was the provision enabling regional transfers for 1984-85. This flexibility has the effect of significantly reducing our super-levy bill. Some purchasers have yet to furnish final returns of their intake for the final quarter of 1984-85 but it appears that the super-levy bill will be a good deal less than had been predicted recently. I hope that the inter-regional transfer, to which I referred, will be continued this year and it is one of the items under discussion in Luxembourg and Brussels.
Last year ad hoc arrangements were made to deal with the special needs of new entrants and farmers in financial difficulty. We now have in operation the milk cessation scheme which facilitates the reallocation of quotas to producers affected by animal disease and other special categories. I am at present considering possible further measures for the allocation of additional quotas to these producers on a permanent basis. I am quite happy with the progress made in recent weeks to cater for other groups with particular difficulties such as financial problems and difficulties for new entrants. I compliment the farming organisations and the umbrella organisation of the co-operatives, ICOS, for their general co-operation. It has not been easy. Someone will have to pay for the extra milk but they have shown a willingness to get to grips with the problem and we will be in a position to announce details of a scheme in the near future which will look after people with genuine problems in regard to disease, new entrants and people in financial difficulties.
Obviously under the quota system, any reallocation has to come from the quotas of other suppliers. This can be done on a compulsory basis or by way of a voluntary purchase scheme under which released quotas are made available on a definite basis to producers in the special category classes. I hope that there will be no hic-coughs in regard to the voluntary scheme. Discussions are in progress with representatives of the farming and co-operative organisations on the possibility of setting up a further purchase scheme. Good progress has been made on this issue and subject to clearance of the details with the EC Commission I hope to make an announcement in the matter shortly.
The current situation on international dairy markets is far from encouraging. The reduction in milk deliveries achieved in the Community and in the US has been largely offset by increases elsewhere and the slow rate of the economic recovery has resulted in market demand remaining weak. This has led to even greater competition among exporters and as a result we have seen a gradual erosion of the discipline which has previously operated in respect of international market management. As our industry is so export-oriented, the difficulties I have outlined have manifested themselves in reduced exports and consequent increased selling to intervention.
On the other hand, there are some positive aspects. Subsidised internal disposal measures have reduced Community intervention stocks of skimmed milk powder to manageable proportions. These stocks have in fact been reduced from a peak of just under a million tonnes in July last to less than 400,000 tonnes currently. Here in Ireland intervention stocks have been reduced to some 400 tonnes, the lowest level since 1980. The position as regards butter is in sharp contrast. There has been no improvement in the butter stock situation over the past 12 months despite the reduction in Community milk deliveries and a sale of a substantial quantity of butter to the USSR. In Ireland 40,000 tonnes of butter were taken into intervention in 1984, and a heavy level of intake is anticipated again during 1985. Community butter stocks are now approaching the one million tonne mark. In the course of the current round of price discussions I have pressed for the introduction of more effective internal disposal measures. I think that there is now general agreement that the problems in the butter sector are sufficiently deep-rooted to warrant urgent action, and I am hopeful that a degree of stability can be restored to the market during the year.
The detailed implementation of the super-levy quota system has involved considerable time and attention from those connected with the industry. Apart from the detailed operational arrangements, there are other aspects arising from the quota system which require perhaps even greater attention. In last year's price negotiations, the special position of dairying in the Irish economy was recognised by our EC partners and a satisfactory outcome was secured. We must make the most of the opportunity that has been given to us. In particular, this entails the production of quality milk in the most cost effective and efficient way possible. While the quota system has imposed quantitative constraints on production the vast bulk of dairy farmers can improve their incomes by more efficient husbandry and management. No one can deny that there is plenty of scope for better breeding, better calving patterns and better milk quality at farm level. For the individual dairy farmer the level of his income will be largely determined by the efficiency with which he fills his quota.
At processing level the task is possibly even more daunting. Our industry has become too dependent on the production of commodity type products for which the intervention store is too often the only outlet. This has to change, and in fairness I recognise that those involved in the industry fully accept this. What is required is a fairly fundamental alteration in product mix and in marketing strategies. The consumer market for dairy products has evolved considerably over the past few years. It is now a highly fickle and sophisticated market; it is also highly competitive. The task is to diversify sufficiently so that we are in a position to react to new market demands and opportunities and, at the same time, leave ourselves less exposed to the vagaries of the intervention system and to changes in Community arrangements. Such a policy will require time and money and I am glad to see that the industry is beginning to respond through the Bord Bainne market development fund. Penetration of markets for branded products can only be achieved on the basis of consistency, reliability and quality and those engaged in processing will have to adopt a ruthless attitude as regards quality in the future.
As I said at Question Time, I am gratified to see that the dairies and co-ops are making a very determined effort to provide a greater range of products. At the Spring Show this week the displays by the various firms indicated that clearly. The message has got through and people are making a very determined attempt to move away from butter and skim milk powder and get into areas where value-added content is extremely important. As a result prices are also considerably greater. I do not agree with Deputy O'Keeffe who criticised the efforts being made. As far as I am concerned the efforts were quite outstanding.
There is no doubt that dairying continues to be one of the most attractive farm enterprises. The demand for quotas under the super-levy system is more than ample proof of that. The dairy sector has now entered a new phase in its development. It reacted well to the opportunities presented by EC membership, achieving a rate of unparallelled growth during the 1970's. The growing imbalance between declining demand and rising production changed the environment. One may regret that more was not achieved during the expansionary days. The possibilities of increasing production may at times have deflected attention from some inherent deficiencies but I think the industry has a clear appreciation of what it needs to do now to cope with the new situation.
The Government's commitment towards making our dairy and food industry generally more responsive to consumer demand has already been clearly indicated in the national plan. Our policy is to create the environment of confidence where investment and expansion can be undertaken and we are making tangible progress in this regard.
A major provision in the Estimate is that of £31.5 million under subhead E for the consumer subsidies on milk and butter. This provision is £15.8 million less than spent in 1984 and is due to the operation in 1985 of the reduced levels of subsidies fixed in July last. The present rates of subsidy are about 2p per pint on milk in the Dublin area and 2.5p per pint elsewhere and 15p per lb on butter. These subsidies reduce the price of milk by some 10 per cent and that of butter by about 15 per cent.
In so far as sheepmeat is concerned, slaughterings at meat export factories in 1984 showed an increase of 11 per cent on 1983 and are running higher again in the current year. There is now a welcome awareness on the part of farmers of the attractiveness of sheep production vis-á-vis other forms of farm enterprise. In fact, the estimated net margins for mid-season lamb production in 1984 were 120 per cent above those for cattle and 60 per cent higher than for barley.
The sheepmeat sector is experiencing some market difficulties in France arising from the export to that market of British ewemeat at low prices. This practice has resulted in a situation where cheap British ewemeat accounts for one-third of total French imports of sheepmeat. I have being objecting to this trade distortion at the Council of Ministers meetings and I will continue to press for an end to the present unsatisfactory situation.
I cannot over-emphasise the necessity for producers and exporters to gear their breeding, management and marketing practices to the exacting requirements of the continental markets. In the years ahead producers may no longer be able to rely as heavily on the EC mechanisms for income support and may have to get the lion's share of their returns directly from the marketplace.
My Department will do all in their power to assist producers in the production of better quality leaner carcases with good conformation. I am hopeful that we can proceed with the early introduction of a lamb carcase classification scheme, possibly on a trial basis. However, any such scheme will only be successful if it has the full support of factories and producers and if it is accompanied by adequate price differentials whereby good quality lean lamb is rewarded and poor quality fat carcases are penalised. In addition, there must be a clear commitment from the factories that carcases certified as unsuitable will not be sent to quality wholesale markets such as Paris.
The pig industry had a difficult year in 1984. Prices were under pressure and slaughterings declined. To help alleviate some of the problems facing the sector we have been seeking over the past year the fullest support of the EC market mechanisms. Thus export refunds on pigmeat going to our main third country markets have been maintained at relatively attractive levels. Moreover, a new scheme of aids for private storage came into operation this week and I am hopeful that it will help towards improving the depressed market situation.
There is an urgent need for investment to improve efficiency at factory level. To compete effectively on the home and export markets our factories premises must be up to the highest standards possible. On the home market, we may face increased competition from other member states when the health restrictions on imports of pigmeat are lifted. These challenges can best be met through further rationalisation and modernisation of factories. My Department and the IDA are ready to give every assistance to help to achieve this aim. Considerable investment has in fact already been made with the support of both national and EC funds and further investment projects are planned.
The most important element of our investment policy is the centralisation of slaughtering units. What is required is about ten centralised slaughtering plants throughout the country providing raw material supplies to processors. Each should be capable of slaughtering about 6,000 pigs per week, thereby maximising economies of scale. A particular advantage of the centralised units would be that they would meet the veterinary requirements of the major importing countries, thereby enabling the maintenance and improvement of exports.
Yesterday at Question Time people were concerned that we did not have a share of the valuable American pigmeat market. None of our plants is licensed to export to the USA because the standards at the plants are not up to scratch. When I speak about ten centralised plants killing 6,000 pigs a week there is nothing dogmatic about that. That is the ideal the IDA have set and that is what the people organising the industry would like to see. There can be variation from district to district depending on the amount of pigs available. It is a guideline and not gospel.
The Government agreed sometime ago to the introduction of legislation which would provide for health inspection charges and standards at local pork slaughtering premises that would be on a par with those applicable at licensed export factories. That legislation is in course of preparation and it will aim to eliminate the divergence of standards which at present applies between the two types of premises.
There was a question yesterday about the standard of premises. It is very difficult to amend legislation when you realise that some of it dates back as far as 1847. Some of the legislation governing the operation of meat plants is almost 140 years old. Amending a whole series of different types of legislation is tedious and long drawn out. It is not as simple as people might imagine.
I am glad to say that 1984 was a good year for the poultry industry. In the broiler sector production increased by some 5 per cent. Imports from Northern Ireland remained at their 1983 level, giving scope to our plants to increase their share of the domestic market. For the future we must continue to maintain the high standards of the industry and further develop the range of processed products to be marketed.
In the case of turkeys production in 1984 was steady but a welcome feature is that an ever-increasing percentage of the throughput is going for further processing. Over 30 per cent is in fact now being processed. The significant strides taken by the turkey sector in market and product research and development are indeed very encouraging.
In the egg sector returns to producers were helped by stable input costs, particularly feedingstuffs. The scheme of grants for egg packing stations has been quite successful in helping the packing and marketing of eggs.
The area under grain in 1984 was around 400,000 hectares or about 3 per cent higher than in 1983. Largely because of the excellent growing and harvesting conditions, total production showed an increase of around 27 per cent. The 2.3 million tonnes of grain produced was about 7 per cent up on the highest figure previously recorded. In recent years the area under spring wheat has been steady at around 14,000 hectares, but the winter wheat acreage has almost doubled to about 65,000 hectares. The area under spring barley, still by far the main cereal crop, is tending to decline with the increase in the winter wheat acreage.
In the current marketing year grain prices have been well below the support price levels and, as a result, my Department have taken some 19,000 tonnes of feed wheat and 106,000 tonnes of barley into intervention. To date practically all of the wheat and 28,000 tonnes of the barley have been sold.
As is known, the Commission's farm price proposals for the 1985-86 marketing year included a reduction of 3.6 per cent in the price for cereals. This arises from the application of the principle of co-responsibility first agreed by the Council of Ministers in 1981. In the price negotiations I have opposed this reduction and I believe that a better result will be achieved.
For the past few years the flourmilling industry has been experiencing difficulty in competing with lower priced imported flour. Imports have risen from 9 per cent of our annual requirements in 1982 to 20 per cent in 1984 — virtually all the imports being from the UK. Under EC rules there is free trade in flour between member states and the imposition of restrictions on imports is not permitted. This causes a problem for our flourmilling industry.
The question of possible abuse of a dominant position by UK exporters was raised with the EC Commission but that body did not accept that the trading practices being followed by those exporters are contrary to the provisions of the Treaty of Rome. I again appeal to all concerned — especially consumers, retailers and bakers — to bear in mind the importance of a national flourmilling industry to our economy and the consequences for the economy and for employment generally should the use of imported flour continue to increase.
Over 221,000 tonnes of sugar were produced during the 1984-85 campaign. This level of production enabled us to fill both our A and B quotas and will stand to our advantage when the negotiations for the post-1986 quota arrangements begin later this year.
The total provision under subheads C.2, C.3 and C.5 for the disease eradication programme in 1985 amounts to £31.5 million. This compares with expenditure of £22 million last year. As the House is aware, there has been virtually no progress for several years past in reducing the bovine TB infection level. This situation clearly pointed to the need for a fresh approach if we were ever to get rid of this disease. As indicated in the national plan, the Government recognised the gravity of the situation and decided to initiate a fresh onslaught on bovine disease, and on TB in particular. To this end, very substantial funds have been set aside for disease eradication during the period 1985-87. This funding was conditional on the introduction of a number of basic changes in existing procedures, the main ones being the nomination by my Department, rather than by the herdowner, of the veterinary surgeon to carry out the test, and the payment of the fee direct to the testing veterinarian.
At first the Irish Veterinary Union found themselves unable to accept these changes but, following prolonged and intensive discussions between the two sides, the way has now been cleared to enable the 1985 testing programme to get under way. There is plenty of work for all concerned, and the thing now is to get on with the job.
While the increased financial allocation and the new approach provide a basis for real progress in the eradication drive, the total co-operation and commitment of all parties is essential to success. This will call for greater discipline on the part of everybody concerned — the veterinary profession, farmers, and my own Department.
I want to make it clear right now that the days of the casual approach to the TB problem are over. For the future, I shall be looking for an improved performance from all sides, increased attention to detail and the type of positive involvement and commitment that has not always been in evidence in the past. I also want to make it quite clear that I shall be as demanding of my own staff as I shall be of farmers and veterinary practitioners.
I want to compliment the officials of my Department who have worked very hard to resolve the dispute which existed over a number of months. I also want to compliment the President of the Irish Veterinary Union, Mr. Coffey, on his efforts to settle the dispute. I am glad to say the result has been satisfactory. Commonsense prevailed and there has been no loss of goodwill. The outcome has been highly satisfactory from everybody's point of view. This will lead to a really successful onslaught on the incidence of TB in cattle. Recently I announced increases in the reactor grants for lighter cattle as well as improvements in the terms of the depopulation fund. Bovine TB is particularly difficult to eradicate here because of the large scale movements of cattle. On average cattle are moved five or six times in their lifetime, whereas in other countries they move once on average.
I have made no mention until now of brucellosis. The position in this regard is most satisfactory, and there is the very real prospect that we will see the last of this disease within a few short years.
In the national plan, the Government announced the doubling of the bovine disease levies from mid-November 1984 to the end of 1985. Receipts of £13.7 million are expected from the levies this year. I have pointed out before that this levy will be reduced to half at the end of 1985. It will operate at half the level from then on.
I am providing a total of £18.4 million for ACOT under subheads B. 12 and B. 13. Restructuring of the advisory services has recently been effected. This involved the devolution of management to district level where local advisory teams are operating on a client/enterprise basis. This has geared ACOT for the expansionary and development role envisaged for the advisory service in the national plan.
ACOT are working exceptionally well. Since the advent of their new organisation system, there has been a wonderful improvement. The director of the organisation is doing an excellent job. Their training programme is tremendous. It may not be recognised generally that this programme will have enormous implications for Irish agriculture. It is very encouraging the virtually 90 per cent of young people embarking on farming nowadays are being trained by way of ACOT courses. Currently, 3,000 farmers are engaged in comprehensive courses extending over three years while a further 1,200 are expected to join the courses in the autumn. In addition short courses to establish farmers have been set up and last year these courses attracted 4,500 participants, an increase of more than 80 per cent on the level of each of the two previous years. That figure speaks for itself.
Under subhead B.3 almost £16.1 million is being provided for An Foras Talúntais. This body too, are doing very valuable work. In the national plan we recognise the important role they have to play.
A provision of £208,000 is provided under subhead B.5 for county committees of agriculture. This represents a considerable increase, almost 40 per cent, on the amount provided previously under this heading. Under subhead B.1 a grant of just under £10 million is being provided for grants to university colleges.
I wish to refer to a few specific items before dealing with the farm modernisation scheme. In the House on Wednesday, Deputy Walsh inquired about the 1924 Dairy Act and asked why the Act was not being implemented fully by my Department. As I pointed out then, the Act is hopelessly out of date and I am not happy with the present position. A group in the Department of Agriculture, in consultation with the Irish Dairy Council, have been studying the matter for some time past. We are concerned that the Act should be updated because we are aware that some milk purchasers are not complying with the legislation and we cannot condone that type of activity. The maximum penalites for breaches of the 1924 Act are as low as £10 and £20. Therefore, the Act is relatively ineffective. It is my intention to update the legislation so as to ensure that the penalites are sufficient to deter people from operating in a manner which is not conducive to the best interests of the dairy industry. It must be said that farmers have a duty to settle their trading arrangements with their co-operatives. It should not be necessary to have to harp all the time on the legislation concerned but the farmers and their organisations should insist that payment for milk is based on proper standards, that an adequate price is paid for a higher level of protein or butter fat content. The legislation does not help much in preventing the application of a flat rate price and consequently we must amend it and bring the penalties up to a more realistic level if we are to ensure better prices for protein and butter fat content.
Another matter that is very topical is the question of the rescue package, the scheme to aid farmers who are in financial difficulty and which was introduced three years ago. I am being asked constantly if this rescue package will be continued. While I should very much like to be able to have the scheme continued I have pointed out to the farming organisations that farmers who are still in financial difficulty should continue to be given some assistance. It is my intention to bring such a scheme to the Government, that is, after I have been appraised fully of the exact position.
However, I wish to make one point clear. Some time ago an ACOT survey indicated that approximately 50 per cent of people who benefited from the scheme in the past three years have now attained financial viability. I am insistent that people who have reached viability should not continue to benefit from subsidies from the Exchequer. I do not know what is the proportion of farmers who are in the red but I expect there may be as many as three out of four and it would be hardly fair to subsidise people whose financial affairs are in a healthy state and not to assist others who are experiencing difficulty. Therefore, I have made it clear to financial institutions that those people who have overcome their difficulties and are now viable financially be identified so that they are not included in a further scheme. I should dearly like to be able to assist people who are in continuing difficulty and in the coming weeks I shall be working towards a solution to that problem. I have had nothing but goodwill and assistance from the institutions concerned.
I wish to deal also with a recent report concerning the deaths of greyhounds on a ferry between Ireland and Britain. It has been stated that we have shown little or no regard in so far as this incident is concerned. I am referring to this matter since I have responsibility for the greyhound industry as well as for the race-horse industry. On Tuesday night last on a Sealink ferry travelling between Rosslare and Fishguard 14 greyhounds died. Apparently 21 animals were shipped in a kennel within a truck when the kennel was adequate only for 12 dogs. When I noticed the report I asked my Department immediately to investigate it. It is disgraceful that such an incident could have happened. Our Transit of Greyhounds Order, 1924, stipulates that there should be one kennel for each greyhound in transit. The matter will be investigated thoroughly in order to ascertain in what way the law was broken and by whom. If the responsibility is found to lie on this side of the Channel or on anyone operating from this country, I will be pressing for action to ensure that those responsible are prosecuted. We will not tolerate any recurrence of that type of activity. Cruelty to animals is not acceptable.