It is a paper produced by Mr. Tom Arnold, Senior Economist, ACOT and is entitled "Is Agriculture Being Written Off?" Further bits of information emerge by perusing that paper. This was referred to by the previous speaker in a roundabout way. Mr. Arnold goes on to say that:
The gross value of visible exports increased from £4.1 billion in 1980 to about £9.5 billion in 1986. Over £7 billion comes from so called `modern' industries, many of which were attracted by our low tax regime for manufacturing industry and the remaining £2.5 billion came from agricultural exports.
Critics of the agricultural industry point to that and say: "Look how poorly agriculture is doing". What they fail to recognise is that agriculture is 85 per cent home supported. It is self sufficient in terms of raw materials. Everything that is called for within the industry is either produced at home or does not cost the economy a great deal. As everybody will recognise the element of repatriation of profits in this area is very small. The paper goes on to state and this is important in the context of the discussion which is taking place:
The import content of many of the modern industries is substantial. An IDA study of manufacturing industry in Ireland in 1983 showed that the Irish raw materials used as a proportion of total raw materials amounted to 33 per cent for chemicals, 17 per cent for electronics and 28 per cent for manufacturing industry. By contrast, the food industry sourced 87 per cent of its raw materials domestically.
Almost 90 per cent of the raw materials for that industry were sourced here at home. That is something we might well overlook in our efforts to create an important industry and to target the markets that are available in Europe and the rest of the world.
I hope I am wrong but I am fearful that within the provisions of the Bill before us there could be a trap where we could find ourselves caught in a situation where insufficient finances are available to this very vital industry at a time when they are most required. If that were to happen, and I have no wish that it would, I implore the Minister and his Minister of State to do all in their power at Cabinet level to divert the necessary funding to this industry and to ensure that we have the kind of return for effort and investment I have just mentioned, and which was outlined in Mr. Arnold's paper.
Further, and much more interesting, on page 3 he says:
For every £100 of exports generated by manufacturing industry, £54 is paid for raw material imports and £17 goes overseas by way of profit repatriation, leaving £29 net within the Irish economy. For every £100 of agricultural exports, imports account for £18 and profit repatriations are negligible, leaving over £80 in the economy. When the import content and profit repatriation of industrial exports are taken into account, it will be seen (Table 1) that the `net exports' value of agriculture (£2.05 billion) is very close to that of industrial exports (£2.28 billion).
When all the inputs, the sources of the inputs, the repatriation of profits and so on are taken into account, and one balances against the other, our agricultural industry is still on a par with all other combinations. That is something I hope is not lost in the course of this debate.
Let us face it. Many products become obsolete but I doubt if food will become obsolete. As long as there are people, they will have to eat and every passing day brings new trends and a greater emphasis on research and development. If we omit that factor or overlook any of those areas, we will leave ourselves open to the strong thrust of competition which is coming from our competitors in Europe and elsewhere. If we are not awake to that threat at this stage, if we allow our financial position to override our judgment in terms of what is required for the industry over the next number of years, we may pay a very heavy and harsh price for it. I would hope that within the ambit of the Bill the Minister can ensure that sufficient emphasis is placed on the importance of the industry and be in a position to make available to the industry the necessary research and advisory services that are required. If that does not happen, another problem arises.
If I might digress for a moment, many critics of agriculture and the agricultural industry — I have often heard them in this House — refer to the easy lifestyle enjoyed by the agricultural community; yet, amazingly the number of people leaving the land increases every year. If it is such a bed of roses, why are so many people leaving? It is not because everything is getting easier or the profits are greater. There is a lesson to be learned if we look at the facts and figures which are available.
At this time more than ever before, it is necessary to deploy to the farming community all the research, training and advice we can. Everything we can lay at their disposal is important so that they may adapt to the changing scene and be prepared, as our competitors are, to venture into new areas. If they do so, they must have at their disposal the necessary back-up services and information.
Another area which worries me is this. When cuts take place they appear to take place where they hurt most, where the actual delivery to the services take place, right at the delivery point; in other words, the inverted pyramid system. This means that under various headings we can arrive at a system where we have strong administrative bodies, a huge administration but on the ground where the services are most required the numbers seem to diminish. That is what is happening with AFT and ACOT. On the one hand, rationalisation is proposed but, on the other hand, it is very vague. We have a brand new rather longish name, something of a misnomer I would have thought. If it is meant to mean doctrine, one could put various interpretations on the doctrine. Nonetheless, the proposal is vague. It does not set out what is likely to happen in one or two years time. Many employees of the research stations have opted for redundancies but what will happen to the stations? Will they be closed down? Will they become white elephants? What worthwhile proposals are there to utilise those stations and to continue the important work they carry out? A number of alternatives come to mind.
In my constituency the peatland experimental station at Lullymore produced a number of fine documents and papers on their research into peatland and other alternatives, such as the utilisation of the terrain for tourist purposes. It would be a terrible pity to allow those stations to die and to allow the work and the research which were undertaken in those stations to be forgotten, to be buried in archives and never to see the light of day again. I hope that kind of thing does not happen. The availability of and the advice from the officers in those stations is very well known and their willingness to become involved with the local community has been long established. I hope whatever proposals the Minister has in mind he will take account of the tremendous work done in places like Lullymore, Moorepark and so on and that he will not dismantle these stations so that they are no longer a worthwhile entity.
Last Thursday the Minister said at column 318 of the Official Report:
The Government intend to provide our farmers, especially our younger farmers with at least as good an access to the knowledge and skills they will require as that available to their counterparts abroad.
That is a point I mentioned already. I am not so sure that is the way to do it. I am not entirely convinced that they will have available to them the same degree of services and back-up as their counterparts. The Minister goes on to say:
That is the reason we are expressly assigning a degree of priority to training and education in the merger Bill. We are attaching a similar priority to food research and development as a responsibility of the new agency. The two are complementary and the food processing sector is faced with ever changing consumer preferences and fierce competition on both home and foreign markets. The priority to be given to entrants into farming will not mean the exclusion of the advisory services, as has been suggested, but rather will ensure that the advisory services will be put to best effect by fully trained farmers and utilised in a cost-effective way.
It will be cost-effective anyway, because the budget will cut the allocation by 43 per cent, but the delivery of the services in tandem with that cost efficiency is the question that has yet to be answered.
In general one recognises and accepts any move towards efficiency and we accept that savings must be made where possible but it should not be to the detriment of a key industry or at a time when a greater dependency than ever is placed on that key industry in the economy. It is important to be efficient but it does not always follow that cutting our budgets dramatically will lead to cost effectiveness. It could lead to disaster.
In relation to the delivery of services to the people for whom they were intended Ella Shanahan inThe Irish Times on Tuesday, 1 December 1987 said:
In 1987, the Department of Agriculture will have spent £58 million of its £182 million estimate on salaries, wages and allowances. Next year, it will have £57 million for salaries, wages and allowances, a cut of just 2 per cent.
Meanwhile, ACOT, the farm advisory and education service, which this year had an £18.3 million allocation from the Department for general purposes, and the Agricultural Institute, which had an allocation of £16.7 million, must take a 43 per cent cut to £20 million between them.
I have doubts as to whether progress along that road will make an improvement in the efficiency of the industry. We could have an inverted pyramid system operating where all the administration is at the top but the Minister and the people who deliver the goods and services are at the bottom.
I am sure the Minister has already read the paper produced by Tom Arnold and I hope he will bear it in mind when considering this Bill. I would ask him not to dismantle the research and advisory services so that they become useless. I implore him not to proceed down the road of fiscal rectitude to the extent that he loses sight of the important contribution made by ACOT and AFT in the past. The Minister should recognise that the replacement body should be given teeth and full powers so that its services are available for the economy. If they are not, the economy will suffer.
Anything we can do at the present time to generate employment must be welcomed. It is generally recognised that research, marketing and product development are areas crucial to the food industry. That being the case, they are crucial to our exports and to the economy. Because of that, the Government have no alternative but to continue to invest in that area in the future. If we do not invest in that area we are cutting the proverbial stick to beat ourselves. I am sure that on Committee Stage I will have further matters to raise on this issue.