I move:—
That the Seanad is of opinion that in the national interest a wide extension of winter dairying is desirable and should be encouraged by positive action on the part of the Government, but considers that the summary of evidence contained in the Report of the Tariff Commission on the application for a tariff on butter does not warrant the conclusion of the Commission recommending a flat rate tariff of fourpence per lb. applicable in normal years, and asks that a full transcript of the shorthand notes of that portion of the evidence which was not confidential should be laid on the Table of the House.
The last clause was included in the motion in the belief that the evidence which was presented to the Commission must contain material which is not referred to by the Commission in their summary, because I do not think that the conclusion which the Commission came to is justified by that portion of the evidence which is included in the summary. I rather think that some facts, figures, and arguments must have been presented by those who were supporting the application for a tariff which were overlooked by the compilers of the Report. Otherwise, I do not think that the Commissioners could come to the conclusion which they reached. Though no formal intimation has ever, to my knowledge, been made to Senators or Deputies I have been informed within the last two or three days that the transcript of notes taken at these inquiries does become available in the Library to those who make application, but that it only becomes available a little while after the presentation of the Report. It is well that Senators should know that the transcript of notes in regard to these various Commissions on tariffs is ultimately made available to those who make a special effort and apply for it. The formula of laying this evidence on the Table would, however, indicate the wish of the House that the matter should be publicly intimated. I should say that the evidence of this Commission should, if possible, be printed and not merely typewritten. However, that is a matter which will, no doubt, be determined by the Department of Finance.
I dare say that most Senators will realise that I have not approached this question with any anti-tariff prejudice. I am quite sincere in the declaration that there should be, even if it required State aid, an extension of winter dairying, and that some effort of a positive character should be made to induce farmers who are dairymen to extend their operations into the winter months. The reasons for that are very plain and have been set out in the Report of this Commission. It will, perhaps, be no harm to advert to them shortly.
The salient features of the whole position regarding dairying and the butter industry may be said to be that the production of butter in the Saorstát is round about one-and-a-half million cwts. in the year, of which considerably less than half is creamery butter, and that the consumption of butter within the Saorstát is only about one million cwts., taking the whole year into account, leaving half-a-million cwts. for export. It is claimed — probably rightly claimed now, though it was not so a few years ago—that the quality of Irish creamery butter is as good as that of Danish butter, on the whole. Perhaps I may be a little more precise and say that good quality Irish creamery butter is as good as good quality Danish creamery butter. But it happens that the Danish industry has organised itself in such a way that its exports to England and its production at home are fairly well evened out throughout the year. Consequently, in their export trade to the British market, they are able to maintain connections right through the year, and, by the goodwill secured in that way, are able to maintain a regular price for the whole of their export supply. On the other hand, it has been for many years a grievance and a complaint in respect of the Irish butter supply to the English market, that the Irish creameries are bound by the circumstances to make new connections every Spring. They have large surpluses in the Summer months. They cease to sell in the early Spring—during the first two or three months of the year—and then they have to make new connections in May or June. Consequently, there is a handicap on Saorstát butter right through the year in the English market.
The Commissioners, in their report, have taken a certain line in relation to winter dairying. They emphasise the importance of winter dairying in the country, and they have acceded to the claim of the applicants and recommended that a flat rate of 4d. per lb. import duty should be placed upon butter in the hope—not a very confident hope, I may remark—that the farmers who are butter producers will be induced to turn their attention to winter dairying. The applicants, in making their case, by no means emphasised that the winter dairying aspect was the important one in their minds. They sought this tariff of 4d. per lb. with the intention of holding over to a much greater degree than they had ever done before the supply of summer butter for the winter months so that they could steady their marketing operations and even out the supply of summer-produced butter. I do not think it has been contended that summer-produced butter sold in the winter months, after being cold stored, will be equal, in command of the market, with freshly-produced butter. I do not know whether that is contended or not, but, at any rate, I presume that the contention is that the holding over of summer-produced butter in the Saorstát and the selling of more equal quantities of that butter throughout the year will enable a higher price to be maintained in the English market by virtue of the fact that the creameries will be able to maintain a steady supply throughout the year to their customers. The Commissioners, as has been pointed out, have refused to give very much credence to the claim of the applicants in regard to this holding over and storing of summer supplies. They say that if what was required was a tariff sufficient to enable the farmers to get a price which would cover the cost of storage, insurance, interest, etc., a much less sum than 4d. per lb. would be ample, and they mention the figure of 1½d per lb. The Commissioners refused to give much weight to that portion of the application which was, in fact, the main purpose of the applicants. Nevertheless, the Commission seem to have overlooked certain facts which are essential to the consideration of this question. The Commission, reviewing the possible benefits to be derived from an extension of winter dairying, weighing the advantages against the disadvantages, the national profit against the national loss, came to a conclusion in favour of a tariff, and they assumed, without shewing much confidence, that the 4d. per lb. will suffice to encourage winter dairying. I think it would have been well had there been some evidence put forward to the Ministry and to the House as to the prospects of the tariff inducing farmers to enter into winter dairying extension. It has been doubted whether, even with an enhanced price of 4d. per lb. over the normal summer price, farmers will go in for winter dairying. That question I will come to later. I want to emphasise the point which has been emphasise by the Commission and by every expert on this subject for years past, that the great thing to be desired is that there should be an evening out of supplies to Great Britain, so that the market connections may be maintained and retained right through the year. If that could be accomplished, there would be a much smaller difference between Danish prices and Irish prices. How is that going to be attained by the imposition of this tariff? We have the holding over, at present, of a considerable proportion of the summer supply. That is done, the farmers and merchants taking the risk, the risk being that in recent years the tendency towards the closing up of the gap between summer prices and winter prices has been accelerated.
If a tariff is imposed, and an increase of 4d. per lb. is assured in the home price of butter during the months January to May, who is to regulate which creamery or creameries shall hold over supplies? That point is made, incidentally, in the course of the Commission's Report, but very little notice is taken of a very important fact which did not, and ought not, to have come under the supervision or jurisdiction of this Commission, but which is extremely vital to any consideration of the subject—that is, the movement for regulated marketing and the refusal on the part of a very large proportion of the creameries and the farmers controlling creameries to have anything to do with compulsorily-regulated marketing. It seems to me that if you are not going to have a controlling authority which will decide the proportion of each month's production that may be exported to Great Britain, you will have creamery vieing with creamery as to the amount that ought to be exported and the amount that ought to be retained for the home trade. Each will hope that instead of making sales on summer prices they will get 4d. per lb. more for their supplies in winter, and they will take the risk that theirs will be the creamery which will get this 4d. per lb. additional. There is the prospect, in the absence of regulated marketing, of complete chaos in the trade and a possibility—this is also pointed out in the Report—that the last state may be worse than the first. We have, therefore, to ask ourselves whether this desideratum of winter dairying or even improved summer prices is going to be assured by the mere imposition of a tariff unless that is accompanied by regulated marketing and a controlling authority to determine what supplies shall go to Great Britain and what supplies shall be retained for home use. I should assume that once a tariff is established, even those creameries and creamery managers — perhaps one should emphasise "creamery managers" in this regard—who have been adverse to regulated marketing will be induced by the circumstances of the time to agree to some scheme of controlled marketing; otherwise they will get no advantage in the winter out of the tariff on imported butter. That leads us then to the question whether the flat tariff rate of 4d. per lb. on butter in normal years is going to have any effect on the summer price at home. The Commission restated an argument which the Minister for Agriculture is very fond of adducing, that in the case of a commodity of which there is an exportable surplus, a tariff is useless as a means of enhancing the home price. The Commission, therefore, say that for the eight months of the year during which there is an exportable surplus there will be no advance in the price of butter to the home consumer. Therefore, in regard to home production, the farmer will during that period get no benefit out of the 4d. per lb. tariff. If that is the case, one wonders what was contained in the evidence of the applicants supporting the application for this tariff. Did they understand that there was to be no enhanced price within this country for the summer sales?
We are assured in the Report that little, if any, difference can take place—in another section, I think, we are assured that there can be no difference—in the summer price of butter to Irish consumers because of the fact that there is a large exportable surplus. That is not a valid statement unless the exportable surplus is available for the market—unless it is offered to the public, as consumers. If there is competition to sell that exportable surplus, no doubt the doctrine is valid and sound, but in the absence of that free competition for sale, so far as the price goes, it is just the same as if there were no exportable surplus at all. That is to say, the surplus is not in the market and, therefore, does not affect the market. I take it that that must have been in the minds of the applicants for this tariff. That brings us back to the probability that when this control is established—it will inevitably be established if there is any advantage to be got out of the stored butter —it will almost automatically, and as of course, take steps to assure to the Irish producer some advantage from the tariff in respect of the summer trade. It will seek to get an advantage for the summer season as well as for the winter season for the producer. I am not criticising that as an objective, but I want to know whether the Commission and whether the Government, in accepting the Report and advice of the Commission, took into account the fact that there was going to be a charge upon the whole body of consumers of butter of something less than 4d. per lb in the summer and 4d. per lb. in the winter. The Commission say in their Report that they only take into account the fact that there will be an added price to the consumer for the four winter months. I assert that there will be an added price for the whole of the year—perhaps not the whole 4d. per lb for the summer months, but whatever the ultimate future controlling authority—which must I think inevitably come if the industry is to be saved—may determine as desirable for the butter-producing community.
There then arises the question of how this tariff is going to affect other industries or other portions of the agricultural industry. I have no great knowledge of this particular aspect of the question, but I would put it to those who are interested in the various aspects of agricultural operations—the cattle industry and others— whether any reaction is likely upon the livestock trade, supposing the aim were accomplished in Ireland as in Denmark, and the production of butter were evened out throughout the year instead of being concentrated in the summer months. It would seem to me that if instead of 50 per cent. of the calves being born in June, July and August, only the due monthly proportion were born in these months, it must have an effect on the spring livestock trade in the following year, and, probably, would have a very considerable effect upon the whole economy—whether for good or ill, I am not certain. When one takes into consideration the Danish position, one ought to remember that the practice there in respect to calves is to kill them as veal and not to rear them for stores.
I think that is a matter of considerable moment and it ought to be considered in weighing up the pros and cons in this case. That is not done in this Report. I think it is important for farmers as well as the rest of the community—perhaps most important of all, the public health side of the community—to take into account one of the probable results of enhancing the price in the winter months by fourpence per pound. It will be remembered that when levying a tariff on imported margarine there was an assurance given by the margarine industry that prices in this country, so far as the tariff could affect them, would not be higher than the prices of similar quality margarine in Great Britain, where there was no tariff. That is being maintained and, I have no doubt, will continue to be maintained, but it will mean that the gap between the price of margarine and butter will be further enlarged to the disadvantage of butter and to the encouragement of the consumption of margarine by the poorer sections of the community. One of the things this country may take pride in is that the consumption of butter has been much higher than in other countries, and the fancy for margarine has not taken hold of the public taste to the same extent as it has in other countries. I think one of the debit items to be placed against so many credit items in Denmark is that the section of the population producing the best butter in large quantities is addicted to the use of margarine. I think it is a matter to be taken into account that there will be a tendency in the town population and the poorer country population against the use of butter if you encourage, by this wide margin in the winter months, a handicap in favour of margarine. From the public health point of view it is important that the poor people, who have very little but bread and butter to eat, should not be discouraged from consuming butter in favour of margarine.
A curious calculation is made in this Report regarding the effect upon the cost of living. We are given certain figures, which are no doubt quite accurate, regarding the percentage effect upon the household budget and the percentage effect upon the net cost of living index figure. We are then told by the Commission that the cost of living will be increased by .5 per cent. over the year. It makes very little difference to the average workman or his wife—more particularly his wife— when buying butter in January, February or March, what effect an enhanced price on any item would be upon what one would pay in June or July. If we are to take this matter seriously at all we have to think not of what the effect upon the annual cost of living for a man who gets a daily or a weekly wage would be, but rather what would be the effect upon the cost of living in those months during which a person would be required to pay this enhanced price.
It is important, too, to note that the proportion of creamery butter which is exported is very much higher than the proportion of farmers' butter exported, and that the consumption of farmers' butter in the Free State is in the proportion of two to one in relation to creamery butter. It is important to note that the application of the recommendation will have effect mainly in respect of the creamery side of the industry; it is the creamery side of the industry that will be getting the greater portion of the benefit. The Commission tell us that this portion of the industry is mainly run and controlled by the thirty to one hundred acre farmer. I mention that because I want to say that any criticism one may make of this proposal in its present form is not a criticism in the interests of the town consumer only. The agriculturist consumer who is not interested in the selling of butter in the English market in the winter time is a purchaser of butter to a very large extent, and is also going to be affected detrimentally if he does not become a producer of butter.
We are given certain figures regarding the practice in other countries, some of which have a surplus for export; that is to say, the amount of the tariff they impose upon imports. It would have been of very great assistance to the proper understanding of this subject if we had been placed in possession of the effect upon retail prices in those countries of the tariff and if we had been given information as to how retail prices there compare, for instance, with export values. I hope it will be possible before this matter is finally decided to have information of that kind made available. Perhaps the most important feature, so far as my criticism goes, is the recommendation that this tariff should be a flat fourpence per lb., having no regard whatever to the ruling prices. We are correctly told that the tendency in recent years in regard to prices has been for the summer to move towards the winter or the winter to move towards the summer. If we take the figures that are presented in Appendix 10, showing the prices of butter in the respective months of each of the years 1916 to 1930, we find that in only four years has the price in the winter fallen below 10/- per cwt. over the previous summer level. Taking the averages of the April to November prices in each year and comparing them with the averages of December, January, February and March, the differences in favour of the winter prices run like this:—44/-, 34/-, 41/-, 43/-, 6/-. In 1921 the winter price was 20/- less than summer price; in 1922 the winter price was 22/- above the summer price; in 1923 it was 56/- above the summer price, and then you have other figures such as 27/-, 2/-, 18/-, 27/- and 4/-. If we take only the last seven years it will be found that an average of 18/- per cwt. for the Irish creamery butter, free on rail, has prevailed in the winter months above the average for the summer months.
My point is that it requires twopence per gallon, or an equivalent of fourpence per lb., which is the recommendation, to induce the farmers to go in for winter dairying. Taking into account the 37/4 proposed to be levied as a tariff by which the home price is to be raised, if we have £1 a cwt. for a period of years on the winter over the summer price we would require only 17/4 additional to equalise the winter cost of production with the summer cost of production, on the figures given here. If the price in the winter were 30/- above the summer level there would be only 7/4 required to equalise winter costs with summer costs. If we are to impose a flat 37/4 per cwt. in favour of the winter producer, and if, in addition, there is an enhanced price in the winter of 15/-, 20/- or 30/- per cwt. over summer level, there is an inducement over and above what is necessary, according to the Report, for the farmers to increase their supplies of winter butter. Probably it has been in the minds of the applicants that the tariff they desire is one which will raise the price in the summer as well as in the winter. Surely we ought to have some standard or some figure to go by as to what price would pay the agriculturist over a period of years to produce milk or butter. It is only when we have got that standard that we can determine what is the rate of tariff, if any, that is required. I contend that the imposition of a mere flat rate, whether you have a plentiful season or a bad season, whether world competition has been less fierce or more fierce, whether market prices are higher or lower, is not a scientific way to approach this subject, is not fair to all sections of the community, and is not going to assure us of the best return for State action. We ought to make it clear in our minds, as presumably the Government has done when acting on the recommendation of the Commission, that the sole object of this tariff is to increase winter dairying. If that is so, then we ought to ask ourselves whether this is the method by which that object can be attained.
From what I have said, I think it will be seen that it is a cumbrous and an unnecessarily costly method on the community. One estimate, and I will give it for what it is worth, is that the cost of production of the quantity necessary for maintaining the level of exports would be less than half what is sought to be imposed upon the consuming community, even supposing that winter production were enhanced to such a degree as to supply the whole of the exports necessary to maintain the summer level.
I suggest that to attain the object of encouraging and extending winter dairying it is cheaper for the community and equally good for the farmer, with a more sure result, that a direct subsidy should be given for every cwt. of winter-produced butter that is exported, or, if you like, for every cwt. of butter that is produced in the winter. That would tend to ensure that the object aimed at will be accomplished. To impose this tariff, with the very doubtful hope that the Commissioners state in their recommendation, is a blundering way of achieving this end. I can understand the Commission's doubts. I remember the Food Prices Tribunal's report. Anybody may refer to it and find that consistently for years there has been a difference, not of 2d. per gallon, but of 4d. and 6d. per gallon, for town supplies of milk in the winter as against the summer. One would think that if 2d. a gallon would induce farmers to produce winter milk to a greater degree than they have done, 4d. or 6d. a gallon, and a very big demand in the winter, would be more than sufficient to induce a much larger number to enter into that department of their business than has been the case.
There is a great deal in this Report of very great interest. There are very many matters about which we ought to have information before a final decision is taken upon this question. I do not know to what extent the non-creamery farmers have joined in making this application, or whether they have expressed any opinions upon the various portions of the application. The Report is very deficient in information or even comments upon that larger section of the butter trade known as the farmers' butter. I think we ought to have further information presented to us on that point. I am going to assume that evidence on those matters was given to the Commission, though it has not been reported in the document presented to us. I am hoping that when we do have possession of the notes we shall find much more evidence of an informative character than is presented in the Report, full though that may be of both relevant and irrelevant material. I think that is all I have to say upon this subject at the moment. I beg to move the motion which stands in my name.
