I dare say that Senator MacEllin's counter proposals to Senator Wilson's motion are not open to discussion. If they were, one would be tempted to follow them up and pass comment upon them. I will pass over his statement by merely referring to the remark that it would be very easy for any central organisation to guarantee a price of 1s. 2d. per lb. of butter fat in summer, and 1s. 9d. per lb. in winter. I merely ask: If there were a central marketing organisation set up and it took upon itself to guarantee the sum of 1s. 9d. per lb. of butter fat in winter as a business proposition, how long would it exist? One slump and the whole structure would totter. How that would be any solution of the problem of improving the butter industry, is beyond me.
One matter that Senator MacEllin referred to seemed to get some approval in the House. I say this in support of Senator Wilson, with whose proposition, by the way, I do not at all agree: Senator MacEllin said that if no butter went into cold storage no money could be collected in respect of this excise duty, and the Irish consumer would have to pay a tariff on the butter which came in to the country to supply the people's needs, and on the other hand would have to pay the subsidy on the butter which went out—in other words, that he would have to pay twice. That statement seemed to meet with some approval. I am surprised at that Surely there is one thing—if all this talk leads to anything—that will be brought about if we address ourselves scientifically to the solution of this problem. That is the extension of winter dairying. If there is an extension of winter dairying there is going to be more fresh butter in winter.
If there is more fresh butter in winter, then, as submitted by Senator Wilson, what the supplier would do first would be to supply home needs. Remember that there is a tariff of 4d. per lb. on butter coming into the country. The home producer has the advantage of that tariff. If he exports his butter, he has to pay freightage and handling charges to the country to which he consigns it. If foreign butter comes in instead of the home butter that foreign butter has to meet extra freightage charges. The Irish consumer has the advantage of saving double freightage charges on his own as against the foreign butter. He has also this 4d. per lb. tariff, and it is perfectly logical to assume that the first market that he will devote attention to under Senator Wilson's scheme is the home market. The consumer will, therefore, not have to pay twice.
Senator MacEllin further said that the great depression in the butter industry lately was due to the dumping of Australian butter. There has not been, practically speaking, any dumping of Australian butter. I do not know how that word can be used at all in connection with what has happened. Australia has been seeking the best market for its butter in the ordinary business way. The Australians and New Zealanders have, for their own purposes, adopted the perfectly legitimate course of taking off the market some surplus butter at a particular period, putting that into cold storage and releasing it at another period of the year. They are attempting to do the very thing that we are setting out to do. Senator Wilson has advocated a more regular supply of butter on the British market. There is no use in calling that dumping. The Australians have adopted a perfectly legitimate means of getting the best price possible for the butter produced in their country.
To come to Senator Wilson's motion, the Senator, in a way, deserves credit for the manner in which he has attacked this problem and for his ingenious proposal. Against Senator Wilson, I would say that he has shifted his ground somewhat. There was a motion before the House some time ago on the dairying question. Senator Johnson asked for more positive action with a view to the extension of winter dairying, and there was an amendment by Senator Dowdall, who also asked for some form of positive action, and advocated, in his speech, a subsidy of so much per hundred gallons of milk. Speaking in that discussion, Senator Wilson said: "I am not prepared to vote for the motion, and I am not prepared to vote for the amendment. I prefer to let things proceed as they are and see what the result will be." The main difference between Senator Wilson and myself, therefore, is that I am prepared to wait and see how things are going to turn out while he, who has given the matter more attention, has gone a bit further in his attempt to find a solution for this problem. I do not make that comment in any disparaging way about Senator Wilson. I do not want to get into contention with him on this question, because heknows more about it than I do, and he deserves credit for having attempted to find a solution. Coming to the motion, the position in which we find ourselves at present is that a tariff of 4d. per lb. has been imposed on butter imported into this country. The object of the tariff was mainly, even according to the Commission, to bring about an extension of winter dairying. Two cases were made before the Tariff Commission when that tariff was sought. One was that the result of the imposition of the tariff would be that Irish butter at the time of year when it would be most plentiful would be put into cold storage and released for home consumption, at the time we were importing butter, to replace that imported butter. That was one of the cases made before the Tariff Commission. The other case was: if a tariff is imposed, the Irish farmer, by reason of the results which will accrue from the imposition of that tariff, will go in more for winter dairying. The Tariff Commission said: "We want winter dairying; we will take a chance of it, and we will impose a tariff." The tariff is here.
As I said in this House already, my humble opinion is that one result of the imposition of this tariff is perfectly certain: that is, that more butter than ever will be put into cold storage in this country and released in the winter time when our home production is lowest. That is a certainty. It is a simple business proposition. Business men are ready and willing to take advantage of every situation which offers monetary reward. It is as logical as it can be to say that if they can buy butter at a time of year when it is cheap and, by holding it over, sell it at a higher price, they are going to do that. If, in addition to the artificial aid of the tariff, they have the advantage of being positively in a position to take advantage of the natural rise of price which takes place in winter as compared with summer, then this is a simple business proposition, and they are bound to take advantage of it. One thing is absolutely certain —that more butter will be put into cold storage, and that our needs will be supplied in that respect. If there is more butter put into cold storage the advantage will be with the cold-stored butter in a way. If there is a lot of butter put into cold storage by reason of this tariff, and if the farmers go in extensively for the winter production of butter, we are going to arrive at a position where there will be something approximating to chaos, and the farmer will not get any great advantage.
Senator Wilson is aiming to get over that by giving a subsidy to the farmer in connection with the export of butter. Senator Wilson is aiming at a definite thing by giving that subsidy; he is aiming at bringing about a condition of things whereby we could undertake the supply of a certain amount of butter to Great Britain during the winter, and so make our export of butter to that country uniform the whole year round. According to the figures that were given on the occasion of the application for a butter tariff, we have, for some years, exported butter from this country in quantities varying from 60,000 or 70,000 tons to 120,000 or 130,000 tons. If we are to supply a uniform quantity of butter to England all through the year, the least amount we could send in the winter would be 60,000 or 70,000 cwts. a month. If we reach that stage which is envisaged in Senator Wilson's motion, the happy stage when we may be able to go a bit closer to the Danish prices, we will be exporting about 60,000 or 70,000 cwts. of butter a month. The subsidy on that amount of butter will be 5d. per lb. That amount on 60,000 cwts. of butter works out at about £150,000 a month. Spread over a period of four months— and we are only taking four months into consideration—it works out at £600,000.
If we ever to come to the happy days when we will have regular supplies of Irish butter on the British market, the subsidy will work out at £600,000 for a period of four months. The result will be that we will give the farmer the extra cost which he has incurred by giving extra food to his cattle. I contend that on that basis we are not going to put the farmer in a better position. The farmer is going to incur extra cost in the production of butter during the winter. On the basis of a subsidy he is going to get an extra price for the butter, but I maintain that the extra money is all going to be eaten up by the extra cost of production and the farmer will, in reality, obtain no benefit at all. The State will contribute £600,000, but where will the advantage be? Senator Wilson says that one advantage is that we would be bringing the price for Irish butter nearer to the price now obtained for Danish butter. I am afraid we are not reasoning this thing out on exact lines and on definite, concrete instances. If we have to do nothing in this country beyond putting butter on the British market more regularly in order that we may reach the point where the price for our butter will be the same as the price paid for Danish butter, then there is surely something very wrong.
I hold that before we tackle this question of getting near to the Danish price we should first of all tackle the question of getting the same price for Irish butter as the New Zealanders get for their butter. Notwithstanding all the talk there has been on this subject, I have not yet listened to any statement in this country setting out the reasons why we cannot get for our butter a price even approximately near to what the New Zealanders get. Here we are quite close to the British market and yet we are not getting anything like the price that is obtained for New Zealand butter. The New Zealanders are getting from 5s. to 10s. a cwt. more than we are getting. Even the Australians are getting more than we are getting, judging by the figures that are made available for us. Both in New Zealand and Australia the supply of butter for the British market is seasonal just as in our own case. During what is our summer they do not supply much butter to the British market, but during what is our winter they supply quite a lot of butter to the British market. Their position, with an inversion of the season, is exactly similar to ours, but notwithstanding that they are beating us on the British market in regard to price. I say that that is an extraordinary position of things.
Even if this scheme were successful, it will be a long day before we can bring about the condition of things that Senator Wilson refers to; a long time will elapse until the price of Irish butter will be on a level with the price obtained for Danish butter. The day is certainly far distant, too, when we will be in a position to keep up a supply of butter to the British market the whole year round.
The Senator has referred to the desirability of an extension of winter dairying. He has emphasised a concentration upon winter dairying, and he holds that, by so doing, we are likely to produce milk to the extent of 100 gallons more per cow. Senator Comyn, who said he knew little about farming, really hit the nail on the head when he said that there was one way to get an additional yield from the cow, and that was to feed the cow better. That can be done in two ways. One way is a better balanced ration, and the other is more food. In either case it certainly will cost more money. If you can get 100 gallons more by giving the cow more food your cost of production will go up. If the cost of production goes up in what better position is the farmer placed? He is no better off. When it comes to a close analysis where are the advantages the Senator has referred to? There are little or no real advantages. There is one thing certain, and that is that under a scheme of subsidies there will be a huge cost to the State, but there will be no real advantage to the farmer. In the last analysis any advantage that may result will be very long delayed.
As regards the Excise duty, the Senator brings that matter forward in such a way that I cannot support him. If, by reason of the tariff, winter dairying is not encouraged, largely because of the fact that too many people go in for cold-stored butter, and if there is no extension of winter dairying, then the next step for the State to take is to impose an Excise duty on butter taken out of cold storage. That is the only way with any definite certainty to bring about an extension of winter dairying, by reason of the imposition of the tariff; otherwise the whole advantage will go to the people, the creameries and otherwise, who will cold-store their butter. I will say that much in support of Senator Wilson's reference to the Excise duty. I am obliged to him for bringing that point along.
In regard to the whole question of subsidies, tariffs and Excise duty, we have to take various considerations into account. We have to look at the conditions in Denmark. If we are attempting to compete with Denmark, we have to have due regard to the circumstances of both countries. Our standard of living is much higher than the standard of living in Denmark, and, therefore, in a sense, their cost of production is lower.