This is a Bill to change the general levy which was provided by the Dairy Produce (Price Stabilisation) Act, 1932. Under the Principal Act there was a general levy to be subscribed for all butter that came within the scope of that Act. Under Section 6 of the Principal Act it was laid down that the general levy would be the same for creamery and non-creamery butter and could not be varied while the stated levy was in force. It is necessary this year, on account of the very low world prices of butter, to raise the levy on creamery butter in order to get the return for creameries that might keep them in production. The creameries themselves and those interested in the creamery industry understand the position and agree that the levy should be raised. But I do not think that there is the same necessity and certainly not the same advantage in the case of factory butter and farmers' butter in having the levy raised in their cases. The Act that was passed here last year, the Dairy Produce (Price Stabilisation) Act, 1932, came into operation on 21st April and was in operation from 21st April to 31st July. During that period there was a levy of 2d. per lb. on all butter. That is the general levy. But we had three pools under that Act and out of the creamery pool there was a bounty of 4d. per lb. on butter exported; out of the factory pool 2½d. only per lb. was paid. There was also a miscellaneous pool which gave rise to a good deal of discussion that time. During the short operation of the Act, the miscellaneous pool came to very little and very little was paid out of that pool at all.
The export price of creamery butter looks as if it were going to be very low for the coming year because the world price has dropped to 62/- or 63/- per cwt. That is the lowest price to which butter has fallen within living memory. The price of butter at Irish creameries in the years before the war was 115/-. There were no subsidies and no tariffs to interfere with the ordinary trade between Great Britain and Ireland. The price of butter now as compared with the price then has dropped to a little over 60/-. Paying the tariff and receiving bounties and subsidies we get what the export value of butter is. Whatever the export value is will rule also the price of butter on the home market. It may be said that the export price of creamery butter sets the standard of value. That is the price paid for butter at the creameries. Therefore the price of butter for export sets the price in the home market. Usually we find that factory butter and farmers' butter keep a certain relationship with creamery butter. In some parts of the country there is a difference of 3d. or 4d. between creamery butter and factory butter. The creamery butter is even more in exceptional cases than 4d. per lb. above the factory butter. In some cases the price is the same and in a few cases the creamery butter is slightly lower. Farmers' butter is butter delivered by the farmer to his customers. At all events the prices remain at a certain fixed relation with the creamery butter.
We have very little difficulty in dealing with the creameries. When we fix a level and fix a bounty we can get, in a few days, into touch with the creameries of the country. The creameries understand the work and understand the operations of the Bill. They are very willing to fall into line with the regulations. We are not in quite such close touch with the factories. Perhaps I might say we are in close touch with the factories, but when we come to the matter of the farmers' butter it is absolutely impossible for the Department to keep in touch with them. The creameries think they are getting an advantage from the Bill. The farmers do not think they are but we think they are. If the price of creamery butter is driven up artificially, the farmers' butter will follow in price in some fixed relation to that. Therefore, they are getting an advantage from the Bill. They are not getting the same advantage as the creameries. It would not be fair to have the same levy on the farmers as on the creameries.
The creameries export half of their production and the other half is consumed at home. For that reason, out of the levy of 2d. per lb. last year, we were able to give a bounty of 4d. In the case of the factory butter it is different. Of the factory butter only one-fifth is consumed at home, so that with a levy of 2d. we could only give a bounty of 2½d. per lb. The advantage, therefore, is small in that case as compared with the creamery butter. Taking the two things into account, we think that the farmers should pay something towards the fund for the bounty, but as they do not derive the full benefit in the same way as the creameries do, we think that they should not pay the same levy. That is why we are asking for power to have one levy for the creamery and another for the non-creamery butter.
Under the Principal Act we could not have a levy of more than half the import duty. That was prescribed in Section 6 of the Act. The import duty that time was 4d. per lb. When examining this matter during the last four or five weeks we came to the conclusion that we would have to raise the levy and the bounty on creamery butter, and we had to take powers either to change that levy or to raise the import duty. The easier way was to raise the import duty, which was done. There is no difficulty, therefore, under Section 6 with regard to the particular class of the levy being more than half the import duty. The import duty has been raised, and the new levy comes within the law in that respect. That is the new levy of 3d. per lb. Also there was a provision in the Act of 1932 for a special levy in the case of certain creameries that were scheduled, creameries that were newly built within the last three or four years and had not got time to pay off capital expenditure. They were put into a special schedule in the Act last year and, under a clause dealing with them, we can give them greater benefit this year than 50 per cent. of the general levy. That is not being altered, but as the levy is prescribed for the present, at any rate, at 3d. per lb., we can give those creameries the benefit of 1½d. per lb.
There is only one other thing I want to mention, and that is that Senators may wonder whether there is any limit to the price to which we can put up butter in the home market. There is a limit. As a matter of fact, when the Bill was going through the Seanad last year, Senator Johnson succeeded in having a section inserted which limits our f.o.r. price at the creamery to 144/8, and we cannot exceed that. As a matter of fact, no matter how we might manipulate it this year, with the world prices as they are, with the very liberal subsidy from State funds, and with the Act operating with a higher levy and higher bounty. I do not think we can go anywhere near 144/8. I think the maximum price butter could possibly go to this year would be 130/-. It is doubtful if we can reach that even, but I think that will be the maximum. The Bill, in short, only deals with one point, and that is giving us power to differentiate between creamery and non-creamery butter. It does not deal with any other point.
