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Seanad Éireann debate -
Wednesday, 9 Dec 1931

Vol. 15 No. 1

Finance (Customs Duties) (No. 3) Bill, 1931 (Certified Money Bill) —Second Stage.

Question proposed: "That the Bill be now read a Second Time."

This is a Bill which is based on the Report of the Tariff Commission arising out of an application for a tariff on oats. The Bill imposes a tariff of 2/6 per cwt. on oats with two-thirds imperial preference rate. In connection with that imposition of a duty on oats it increases the existing duty on oatmeal, which is 2/6 per cwt. without imperial preference, to a rate of 6/- per cwt. with 4/- imperial preference. Ordinarily, this is not a tariff that will have any very great effect. This year, owing to the shortage of the oat crop, it has definitely affected the price of oats here, but ordinarily it might well not affect the price of oats at all or only very slightly indeed. It will, however, ensure that the price of oats will not be depressed unreasonably or unnaturally in any year by any sort of bounty-fed, or special importation of, oats into the country. While it is a matter of some importance to require careful investigation—the Tariff Commission heard evidence from all sides —it is the kind of tariff which in a normal year will have little or no effect. It will at any rate ensure that there will not be some external factor operating to cause quantities of oats, which are not really required here, to be imported and unnaturally to depress prices.

So far as seed oats is concerned, the view of the Tariff Commission, which I think is the correct view, is that this will lead to the production in this country of all the seed oats required. A number of years ago, when a tariff on oats was first mooted, it was thought that there would be a case for the exemption of seed oats. It is clear that there would be a great deal of administrative difficulty in the exemption of seed oats. It would require the keeping of records as well as inspections, and would cause trouble and expense which would hardly be justify. The view taken by the Tariff Commission was that there was no reason why seed oats that are required in the country should not be produced here, and that in fact benefits might follow from the production of seed oats in the country because then there could be something better than good commercial varieties of oats supplied for seed. Most of the seed oats imported is only good commercial oats.

As this is a Money Bill we cannot do anything with it except to say whatever happens to be in our minds. It seems to me that this is not very well-considered legislation. Presumably the object of this Bill is to help the Irish grower of oats. It cannot help him in so far as his export business is concerned. This country has got a surplus of oats, and normally a good deal of that is exported. The Bill may help the Irish grower to some extent to get a better price for his oats inside the Free State. I do not know to what extent it will help him in that direction. It is almost impossible to say. But to whatever extent it does help him it will be to the detriment of the consumer of oats inside the Free State. So that nationally, what you gain on the swings you are going to lose on the roundabouts. This legislation does not seem to me to be very well considered, or in fact that it is necessary at all. These customs questions are undoubtedly very complicated and one may very easily go wrong, but in speaking on this Bill one cannot lose sight of the fact that the Minister for Agriculture, speaking in another place a few days ago, said that this Bill was powerless to do the farmer who produces oats in this country any good. If that is so, why is the Bill introduced? I am not satisfied that the Bill is necessary or that it is going to do any good. Unless you are certain that you are going to do good, that the object in view will be attained, then I think that this had better not be done at all.

I entirely disagree with the conclusions arrived at by the last speaker. I think it is very necessary that a Bill putting a tariff on oats should be passed. My only regret is that this Bill was not introduced earlier in the year so that farmers who grow oats would have gained the benefit of the tariff. Unfortunately a great many farmers were obliged to sell their oats to the merchants before the tariff was put on. They had to sell at a very small price. This year it is the merchants who will gain the benefit of the tariff, but I hope that in the future arrangements will be made to enable the farmers to get the benefit of it.

As regards the seed oats, if it had been announced earlier that a tariff would be imposed on imported oats farmers would have been enabled to take steps to provide seed oats for the ensuing year. They would not have threshed all their oats in the autumn; they could have retained a certain quantity of it for the spring in order that it could be threshed freshly and so ensure a good seed. There was a considerable amount of oats dumped in this country, and it reduced the price in the home market. I entirely support the action of the Government in putting on this tariff.

I think the views expressed by Senator Linehan are very sound. Land is going out-of cultivation very rapidly. I think more than a quarter of a million acres have been divorced from the plough within the last ten years. Anything that can possibly remedy that state of affairs is desirable. Senator Bagwell quoted the Minister for Agriculture as saying that this tariff could not possibly do the farmers any good. I took particular notice that Senator Bagwell did not pledge his own word to that. Does Senator Bagwell say that a tariff on oats will not do the farmer any good? The Senator is too intelligent a man to say anything of the kind.

I am in favour of this tariff because it will encourage the cultivation of oats next year and the year after. With Senator Linehan, I regret that the tariff was not introduced at a time when it would be of some benefit to the farmers. This year it will be of considerable benefit to the me Perhaps they need some consideration —I do not know. I am sure that next year this tariff will be of benefit to the farmers. For that reason, I hope it will be a continuing tariff until such time as we become an exporting country, not merely in oats, but in barley and other grain. I would be inclined to think that the importation of seed oats might be desirable, because, as I know myself, the strain of potatoes, oats, barley and all sorts of crops seems to get worn out in a particular district or country. That fact would not, of course, be sufficient to induce any person to offer the slightest objection to a tariff on oats in an agricultural country like this, where undoubtedly we can grow very good oats.

It is sometimes said that we cannot grow wheat. That is a delusion. We can grow wheat. We have some of the best wheat land in the world. Another delusion that is frequently fostered is that there are areas in this country suitable for grass and unsuitable for tillage. That is an absolutely flagrant falsehood. We ought to turn our attention to the fact that we have a growing population and a diminishing agriculture. That position must be rectified at once. If tariffs, no matter how high, are necessary to effect a remedy, I certainly will support them. I support Senator Linehan's statements. I understand the Senator is in favour of a policy of that kind.

I desire to support the tariff, but I am not so optimistic as my friend Senator Comyn. The Senator says that next year the farmers, who this year are being robbed of the benefits of the tariff, will have their innings. I am afraid that next year, instead of a shortage, we will have a surplus, and we will have to accept world prices for a lot of our oats. Possibly in the Twenty-six Countries, by reason of the tariff, we might be able so to manipulate matters that we will drive up the price in the home market and make the people who want oats pay for them, especially those feeding horses and the like. I agree that it is a good thing to have a tariff on oats. So long ago as 1924 I moved a somewhat similar proposal in the Dáil. I dealt also with the question of butter, but my suggestions were not agreed to. Possibly I was before my time. People are now coming round to the ideas that some of us then had. As the Government gain experience they observe things more from the point of view of what the people require. This tariff will let the farmers know how far any benefits are to be derived from tariffs on agricultural produce, excepting wheat.

So far as the tariff on oats is concerned, if the farmers are satisfied, if the feeders of oats are satisfied, if the Government are satisfied, and if all the rest of the people interested are satisfied, I do not think there could be any objection to the passing of a Bill dealing with a duty of 2/6 on oats. I was curious, when Senator Comyn spoke of the country becoming eventually an exporting country, what was going to be the effect of this tariff upon other countries to which the Senator expects oats and other produce will be exported.

That will be a long day.

Not so very long, I think. Appearances indicate that you will have a tariff on oats and other things in the only market that is likely to be a buyer of our agricultural goods. I have no doubt that in the consideration of the fiscal policy of Great Britain and Northern Ireland the fact that there is a 1/8 tariff against Great Britain and Northern Ireland in respect of oats will be taken into account when fixing the tariff that will be put upon Free State oats in those markets. I notice from the figures that were considered by the Commission that in the last five years there has been a very great surplus of exports of oats over imports of oats, and in only one year out of the last five years has there been any appreciable excess of imports over exports. Quite apart from the question of policy, it may be very doubtful wisdom to tempt the market for our export trade to put a tariff upon those articles which the farmers of this country will desire to export.

Every emphasis has been laid upon the duty on oats, but nothing has been said about the duty on oatmeal. I cannot find genuineness in the explanation that has been given for the increase of the duty upon oatmeal imports. It has been for some time 2/6 per cwt., without any preferential duty. It is now proposed to make it 6/-, with a preferential duty of two-thirds—in effect, a 4/- duty. I am inclined to think that simply means raising the price to the consumer perhaps by 1/2d. a 1b. retail. The Minister for Agriculture, defending this Bill and speaking for the Government in the promotion of a tariff on oats, said, according to the Dáil Official Reports: "The production of oats and the price will depend absolutely and always on the price of Indian meal and maize, and as far as this tariff is concerned it will make no difference whatsoever in production and price." The Minister has repeated time and again that in the judgment of the Ministry there will be no increase in the price of oats.

It appears form the report that the 2/6 duty upon oatmeal has resulted in the oatmeal millers being able to secure the bulk of the market for their product. If they can do that with a 2/6 duty, where does the need arise for raising the duty to 4/-? The Minister stated that, according to the Commission, if you are imposing a duty on oats there ought to be a proportionate increase in the duty on oatmeal. That would be justifiable only if you are raising the price of oats, but in as much as the Minister says you will not be raising the price of oats I submit there is no justification for the increase in the duty on oatmeal. It may be said that there may be a seasonal increase in the price of oats, but the trade in oatmeal is an all-the-year-round trade. The millers will buy, not at that portion of the year when the market is more likely to be against them, but rather when the market is likely to be with them.

Without any application from the millers, without any justification in the report or from the Ministry, there is an increased duty proposed in the case of oatmeal. That simply means that there is another 1/- or 2/- per cwt. in the pockets of the millers. It is not justified, because it means an increase in the cost of oatmeal to the consumer. I think the House ought to express its dissatisfaction. The House should indicate that it is not satisfied that there is any justification in the circumstances for the increase in the duty on oatmeal.

I rise to support the Bill. There is no doubt this tariff on oats will have the effect of raising the price, but in the end it will be a distinct advantage to the country. The yield of oats this year is about half what it would be in a normal year. Whether there was a tariff or not we would not have had much oats to export this year. The reason of this tariff is quite obvious. It is there because of the low price of oats imported into this country last June and July. Canadian oats were landed at the North Wall at 6/6 and 7/- a barrel. That came heavily on the farmers because the farmer growing a cash oat crop could not possibly meet that price. If we have a normal crop of oats next year, and there is every likelihood that we will have a larger crop than we had this year, in my opinion oats will be no dearer in the Free State than they will be across the water. At the present moment the price across the water is 2/6 lower than in the Free State.

It has been stated here that it is the intention of Great Britain to put a tariff on produce going into that country from the Free State. It has been mentioned that Britain will retaliate in the matter of tariffs if we impose this tariff on oats. That argument does not arise at all, because England does not export oats, and she has no hope at all of sending us oats. She certainly sends us manufactured goods, and it is our mission to send England farm produce. The legal

Oats is an ideal crop for the Free State. It is the grain crop that suits our climate. Senator Comyn said very distinctly—and I am sure he is great authority on wheat growing—that we can grow wheat here. If one speaks to any farmer outside the barley-growing areas about wheat-growing that farmer will simply laugh at the idea. In the barley-growing counties no doubt wheat can be grown, but there is a great difficulty about getting a sale for it. Our climate is so moist that it is almost impossible nine years out of every ten to save wheat satisfactorily. It is a very sensitive grain. If it is not dried within two or three weeks after it is cut it becomes quite musty and is practically useless for anything except stock feeding.

No doubt we could grow sufficient wheat to meet our home requirements, but I think that it would mean a tremendous capital expenditure in order to have the wheat kiln-dried immediately it is cut so as to be able to retain supplies to meet the requirements of the people in the country. Oats is the most suitable grain for growing in this country. It has the largest acreage of any grain crop, because it is particularly suited to the climate. It is grown successfully in the poor counties just as well as in the rich counties. Perhaps it is grown more extensively in the poor counties.

Senator Johnson spoke about the tariff on oatmeal; he said the tariff should be on oats and not on oatmeal. If oats go up by the full price of the tariff, 2/6, the miller will have to pay that full price.

The Minister says that he will not.

The Minister, with all respect, does not happen to be right in this matter. I daresay that on the present occasion the tariff has had the effect of increasing the price of oats, because it was a short crop. If we had a normal crop we would be exporting oats. We did export oats last year. The reason we exported so little last year was not so much because it was a short crop; rather was it because the price was low in England and it would not pay the farmer here to export it. The Free State farmer preferred to use the oats on his own farm. Four or five years ago we had a fine trade exporting oats, but when the price comes down to 9/- or 10/- a barrel the farmer prefers to use the crop on his own farm rather than go to the trouble of exporting it.

With regard to the increased tariff on oatmeal, the fact of the matter is that if the millers do not get an increased price now for their oatmeal they must go out of business, particularly when there is a likelihood of the price of oats per barrel increasing. During the last four or five years oatmeal has been no dearer in the Free State than in Northern Ireland or Scotland. The tariff on oatmeal has had no injurious effect in the way of putting the price up. The tariff did have a good effect on the millers' trade. The millers captured nine-tenths of the whole oatmeal trade of the Free State, and it meant prosperity for them. As a result of the tariff they were able to work the full twelve months of the year; before that they were working only three or four months each year.

I think it would be ridiculous if the Tariff Commission were to recommend a tariff on oats and not an increased tariff on oatmeal. The 4/- as against the 2/6 is not a sufficient increase, but it will be adequate enough to enable the millers to retain their trade in oatmeal in the Free State. I believe that next year the price of oats in the Free State will be the same as the price on the other side, and I think oatmeal will resume the position it held for the last five or six years; it will be the same price here as in Northern Ireland.

There is a scheme in force on the Continent in connection with general tariffs. I have in mind countries like Germany and France. The point is that if in a particular area they have too much oats they may export oats from that area and get a certificate in order to do so. Under that certificate they are then enabled to import, some six or twelve months subsequently, the same quantity of oats as they exported. I think a similar scheme would be very suitable in this country in relation to oats. In Wicklow, Wexford and Waterford they grow black oats. According to the evidence that was given before the Tariff Commission, black oats are not suitable for the oatmeal millers, and it is considered that black oats are not suitable either for hunters.

In a wet season the oats would undoubtly be in a very bad condition. They would contain more moisture than usual, and they will not keep unless in stack. If the oats are threshed they have to be kiln-dried. If, in a big area, it was found they had too much oats, would it not be better to export those damp, black oats and have some arrangement whereby they could import a similar quantity later on? There is always a good market in the South of England for black oats; pit ponies use them largely. If these oats were exported under such a scheme as I have suggested, oats suitable for the requirements of millers, horse trainers and others could be imported free of duty. That would be of considerable benefit to the farmers accustomed to growing oats. There would be no loss involved. Black oats, I understand, were offered in Wicklow at 10/- and 11/- a barrel.

The price of 10/- is a very good one for black oats.

The fact of the matter is they were offered at 7/- a barrel.

I did not think the price was so low as that. Whatever the price may be, I think black oats are not very much appreciated in this country either for milling or for feeding horses. It would be as well to export black oats, get a certificate, and then import more suitable oats subsequently. It certainly would save storage expenses and would facilitate the trade in every way. I offer that suggestion to the Minister in the hope that he will favourably consider it.

Would it not be much better to feed black oats to cattle that are exported on the hoof?

With, reference to the point raised by Senator O'Rourke, the inauguration of a scheme of export certificates such as he suggest would mean a fairly big change. It would mean the starting of a system, because we have no such system in existence. It seems to me such a thing would be started only after definite consideration of its advantages and disadvantages here. It could hardly be brought forward in relation to a small tariff such as this without, beforehand, having received special consideration. There are factors in operation in some of the countries where such things exist, factors that do not operate here. There is the question of great distances and internal transport costs, which may make it desirable that a surplus in one part of the country should be exported to another part and a deficit in a different part should be made up by imports from abroad. To some extent that might operate here, but it is a matter that would require a certain amount of consideration. There are, perhaps, other tariffs in connection with which such a scheme might be inaugurated, but I think it is a matter that ought to be specially brought to the attention of the Tariff Commission so that all its aspects might be examined before we would take it up.

As has been indicated here, this tariff accidentally is having a considerable effect this year. The benefits of the tariff are not all going to the merchants. The tariff has been in operation for a considerable time now, because it came into operation as soon as the resolution was passed in the Dáil. While it was a week or two too late to be of benefit to all the farmers, there were, however, very large numbers of farmers who are accustomed to sell oats, who had oats for sale, and who had not then disposed of them, and they were among the farmers who got definite advantage from the tariff this year.

I do not think we can expect a tariff such as this to have any great effect on the area under cultivation. It is true that the fact that prices have improved this year may cause more oats to be sown next year. I hope it will not have the effect, in areas where oats are grown for seed, of causing too much oats to be sown with consequent disappointment and reaction. It will do simply what I have already indicated. It will prevent in normal years a possibility of the market being disturbed by bounty-fed importations or other exceptional importations which might depress the market out of all proportion to the quantity brought in. It will have the good effect of causing steps to be taken so as to ensure that nearly the whole quantity of seed oats required will be produced here.

There is not a great deal to be done in connection with oats. The oat crop is mainly grown for feeding on the farm. There are comparatively limited areas where oats are grown for sale, and up to recently there has been an excess of exports over imports. If there were changes in conditions through the world here and elsewhere we might have that position again, and in that case a tariff such as this could not do much. I do not think any damage in any direction will be inflicted by this tariff. Some little good will be done. There will be a stability of price, and that will be safeguarded to some extent. Generally this tariff is a minor matter which will do some good and I think, will do no harm.

Question—"That the Bill be now read a Second Time"—agreed to.

Committee Stage fixed for Thursday, 10th December.

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