Deputy Davern gave me notice of his intention to raise on the Adjournment the immediate threat to a number of jobs in the small sawmilling area.
Adjournment Debate. - Sawmilling Jobs Threat.
I propose to divide my time with Deputy Jacob, Deputy Nolan and Deputy Ferris.
Is that satisfactory? Agreed.
It would be appropriate to start by saying cad a dhéanfaimíd feasta gan adhmad. This is a problem peculiar to small sawmills. There is a perception of unfairness in the present practice by Coillte. A total of 970,000 cubic metres are produced per year, of which 600,000 cubic metres are reserved for the bigger sawmills. Last year the small sawmills got an increase of 50 per cent over the amount given previously but this amounted to only 70,000 cubic metres. This is not enough for them. They need at least 300,000 cubic metres to keep going.
Over 1,000 people are employed in this industry and another 1,000 are indirectly employed. Most of the saw log material they require is for post rail fencing and pallet making. These products are made to customer design on a local base. They are designed towards the customer, not mass produced. They are particularly suitable for small farmers and particularly for those stud farms which require fencing. The vast majority of these are in rural areas where not only is the service needed but the job is appreciated.
There is a great sense of grievance because most of the job lots available from Coillte are perceived as being sold in such a way as to knock out the smaller man. The lots are far too big for a small man to buy. Not only is the sum of money too large but the area is too big and the time required to clear it too long. It is geared in a sense towards the bigger man and to the detriment of the smaller man. The danger here is of a monopoly. The average price of logsaw last year was £31.50 per cubic metre. As lately as two weeks ago some of these people paid £57 per cubic metre which suggests that somebody in the area is trying to push the price up.
These people were in this country even before the State was founded, before the forests were planted. Three and four generations of these families have been in the business. They are not gearing towards the construction business nor are the vast majority of them gearing towards wood that meets the SR 11 standard. However, because people on the board of Coillte represent the bigger sawmills the perception is that there is an attempt to cut out the smaller man. I am frightened by this. It takes only seven cubic metres of logsaw to keep one man employed in a sawmill per week but it takes 100 cubic metres to keep him in a mass production unit. Unfortunately, the perception is fairly soundly based that there is a campaign against the small sawmillers, the family associations whom we all hold very dear. I hope the Minister will ensure through his representations that the family firm, the small man who is employing six or seven local people, will be provided with the timber. At present most of them have not enough timber to continue.
The wellbeing and contribution in business of the small, family timber operator has been of great concern to me for several years. I have voiced this concern on a number of occasions in this House and in other appropriate fora. This type of operation is providing in all several thousand worth-while jobs nationwide. For that reason alone all efforts must be made by all concerned to ensure the continuity of these jobs. This is of particular significance to my county of Wicklow which percentagewise has more areas planted with forestry than any other county in Ireland. Forestry and the timber business in general play a huge role in County Wicklow's economy. The timber business is the county's largest employer. The small, family type business in Wicklow is currently providing several hundred jobs, the equivalent of a substantial factory. If such a factory were to close down in Wicklow, or anywhere in the country for that matter, there would be a furore and public outcry, yet all the signs are that the small operator is being frozen out with similar disastrous job losses. The silence is deafening with nobody appearing to notice or to take appropriate action to avert such a disaster.
I am calling on the Minister and all others concerned to look at this and to take the necessary action. The many small, family timber business operators in Wicklow and throughout the country have been involved in the timber business for generations, long before any of us were born. They know their business extremely well and most of them know no other business. The livelihood of these small operators is of paramount importance. They must not be neglected or maltreated in the progress towards improvement for the larger operators.
It is gratifying to see the major improvement in the fortunes of the larger, more sophisticated units. The move towards added value and the emphasis on quality are to be welcomed and applauded. However, there is nothing whatsoever to be gained by punishing the small operators by imposing unrealistic and unattainable conditions on them or by preventing them from having ready access to a regular supply of timber of the type necessary for their operations. Most of these small, family type timber men are experienced and responsible. They know their job; they know their timber. They know their markets and they are fully aware these markets would disappear speedily if they did not maintain a high level of quality.
Heretofore local foresters, great, accomplished and under-recognised as they are, had discretion with regard to distribution and allocation of timber. I suggest here to the Minister that that discretion be reintroduced so that those local foresters can, if they wish, distribute blocks of timber to these small local operators. I appeal to the Minister and to all concerned to take all steps promptly to ensure that the small, family type timber businessmen, working effectively and efficiently and within the law, are furnished with their timber supplies in the quantity, quality and type appropriate to their requirements at a non-disadvantageous price vis-à-vis the larger units. Then we can be assured that these traditional people will carry on for further generations and that the jobs at present imperiled will be saved. Then we can be assured that ordinary common sense is prevailing.
I propose to give one minute of my time to Deputy John Browne. I rise in support of the previous speakers. If we are not careful the small family sawmillers will become, if they have not already become, an endangered species. If the Minister does not review the workings of Coillte we will run into a monopoly position which will be unhealthy not alone for the forestry business but for the sawmilling business.
Some red herrings have been thrown out by various organisations about the small family sawmillers in the area of taxation. The history of forestry in the black economy is legendary. However, I think Coillte are correct in their attitude that anybody seeking to buy a product from them must have a clear certificate from his local tax inspector. Now the small family sawmillers are getting their act together, but unless they get some support from the Minister and Coillte they will not last. All over the country small, family sawmillers have been providing a very good service to the local community. Their product is not highly finished; they leave that to the bigger operators. What they produce is fencing and pallet work. There is a niche in the market for this type of product and it will be a sorry day for this country if they are allowed to go out of business. The Minister should set down criteria whereby local foresters will be empowered to sell products to the local small sawmillers. Provided these local sawmillers hold their clearance certificate, they should be given the raw material to allow them continue in business. I ask the Minister to look seriously at the plight of the sawmillers.
(Wexford): I thank Deputy Nolan for allowing me a minute of his time. I concur with the previous speakers and I ask the Minister to investigate why the small sawmillers are either not getting timber from Coillte at present or are getting it in very small supply. In County Wexford the small sawmillers have been told in no uncertain fashion by Coillte that by the end of this year they will be getting no further supplies of timber and they may as well close down. If this happens it will have serious consequences for a number of small, family sawmillers in the Wexford area with a serious loss of jobs. The small sawmillers provide a very valuable service to the local farmers in pallet making and to the local timber merchants. The system of tendering is totally working against the small sawmiller. A bone of contention among the small sawmillers there is that because the large sawmillers are represented on the double on the board of Coillte they are being squeezed out. I ask the Minister to assure us here tonight that that is not the case, but I find it very difficult as a public representative to get any satisfaction whatever from Coillte. They have been telling the small sawmillers they are wasting their time going to their local politicians that they were in the clutches of politicans for far too long and should be kept away from us. That is an absolute disgrace. I ask the Minister to investigate that also. As public representatives we have a right to make representations on behalf of the sawmillers.
The time has come to call the Minister for Energy to reply.
Sorry, Sir, I thought I had been allocated one minute.
I am sorry, Deputy, the time is up. I had not heard the Deputy's name mentioned in any event.
My name was mentioned.
I do not wish to disadvantage the Deputy in any way.
My name was mentioned.
That may be so but ten minutes is all that is allowed for such purposes under the Standing Orders of this House. We have exceeded that time by some two minutes.
My name was mentioned. I am sorry you did not hear it.
I have good hearing, Deputy. Be that as it may, the time is exhausted.
Have I five minutes?
You have five minutes, Minister. There is no restriction on your time.
No restriction?
In the sense that you have five minutes.
I am very interested to hear the points that have been raised. I am disappointed in a way that only tonight these points have been made to me. I cannot recall having had any representations from any of the Deputies who have spoken about the points they have raised here other than the matter being raised today. I assure them that as far as I am concerned the small sawmills will continue in existence. Certainly they will not go out of existence because of any big brother deciding they shall not have supplies. That will always be my position in the matter as long as I am Minister.
Coillte Teoranta operate a number of sales methods with the objective of ensuring continuity of supply to the sawmill industry and allowing the industry to plan more effective output and managing strategies. These include a contract allocation scheme for small as well as large sawlog.
A contract allocation scheme for large sawlog was first introduced in 1982 to improve industrial efficiency, achieve additional added value and contribute to import substitution in the construction sector. The scheme was revised in 1986, placing greater emphasis on the standard of sawing, drying, grading and preservation of timber. A pilot scheme introduced for small sawlog in 1987 proved to be a success and was extended in 1988.
The top grade sawmills are all achieving record throughputs and Irish timber now dominates the market for sawn timber with an estimated 50 per cent share. It goes without saying that the production of quality timber is a major requirement and to encourage this all structural timbers — both Irish and imported — will have to meet the requirements set down in the National Standards Authority of Ireland's Standard Recommendation SR11/88 from 1 January 1989.
In Ireland, timber supplies will increase substantially in the near future, as an increasing percentage of the forest estate reaches maturity. Forecasts are that production from public forests will rise from 1.5 million cubic metres in 1989 to 3 million by the turn of the century.
Currently demand in the sawlog sector exceeds supply. Demand in the pulpwood sector is also buoyant. There are two pulpwood plants in production and the possibilities for a third are being explored, as the House knows. Irish timber now dominates the domestic market for construction timber with a 60 per cent share, which is expected to increase to 80 per cent by 1993, a dramatic turnaround from the position which existed ten or 15 years ago.
Quality and added value are the key components of a policy aimed at exploiting the valuable national resources that Irish forests represent. The extent to which the sawmilling sector is dominated by a small number of large mills is indicative of the capital intensive nature of the industry in terms of its capacity to exploit the demands imposed by the production of quality products. It is a fact of life that the resources necessary to compete at this level will not be available to many of the small sawmill operators. This is recognised fully by me and my officials. I understand that Coillte also recognise this fact. Indeed Coillte's response in the short term has been to increase the volume of timber made available through local sales by 50 per cent in 1990. That is a change in policy which will be implemented through out 1990. The small sawmilling operators will benefit immediately from this increase.
Now that Coillte Teoranta have completed their first full year of operation and negotiations with the Commission in Brussels are nearing completion on the operational programme for forestry, I want to proceed at full steam with the preparation of a strategy for the development of the timber industry of the year 2000. This will cover both the pulpwood and sawmilling sectors. An interim strategy for the sawmill industry, aimed at encouraging investment in mills which have the capacity to precess at least 25,000 cubic metres per annum, meets the highest standards and are export oriented is already in place.
In preparing this strategy to the year 2000, the development needs of the small sawmilling sector will be fully considered. The essential purpose of these strategies is to ensure that the future development of the Irish timber sector is focused on the needs of the Irish and international market place. By concentrating on market driven development and by using all the resources of the State, including the IDA and their company development programme, Eolas and their technology programmes, and Coillte Teoranta and their planting and silvicultural and marketing programmes, the industry as a whole can more easily prepare itself for the challenges and opportunities of 1992 and beyond.
There are compelling reasons for small operators to look towards upgrading their technology in order to compete in the more valuable end of the market. One way of approaching this would be through rationalisation. This approach has the value of economies of scale and not only will it guarantee the protection of existing jobs but will generate new jobs arising from the greater exploitation of home and export markets.
In moving ahead with a development strategy for the timber industry, I would like Deputies to be assured that the development of the industry will be examined from the ground up. That includes large mills and small mills. In this regard the needs of the small sawmillers will be fully taken into account. I feel sure that in our future strategy we can, together with those involved, identify niche areas which will exploit market opportunities to generate greater wealth and jobs in our country.
I want to respond to the point made by some Deputies in regard to representation of some of the larger sawmilling industries on the board of Coillte Teoranta. I assure the House that there are special procedures adopted by the board of Coillte to ensure there is no possibility of any conflict of interest or influence being implemented by way of the representation that is there. I inherited this situation. If there is a conflict of interest with regard to representation on the board it will certainly be a matter of very great concern to me and I will ask those who are members of the board to examine the position themselves to see if they consider there is any conflict of interest in their membership of the board and their representation of the companies they belong to. That matter would be of concern to me if it was seen to be borne out as seems to have been suggested here in this debate.
The Dáil adjourned at 11.35 p.m. until 10.30 a.m. on Wednesday, 28 March 1990.