Sugar Manufacture Bill, 1933—Second Stage (Resumed).

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

Mr. Guinness

Within the last few years, in this country, unemployment has very seriously increased, and at the present time the Ministry of Industry and Commerce records—in fact, it was only yesterday I got the figures from the Minister—that there are at present 56,000 unemployed people in the Saorstát. The situation, which is a very unfortunate one, has been met hitherto by emigration of the surplus population to America and the Colonies but, as a result of the world depression, foreign Governments now have refused admittance to emigrants with the result that very large numbers of people are thrown out of work in this country and there is no work for them at present and they have no proper means of livelihood. The Government, I understand, has been very much concerned with this state of affairs and they have introduced several measures, such as road repairs and other similar measures by which they hope to alleviate the situation and also to find remunerative occupation for these people, obviating, if possible, the necessity for the direct distribution of money which is always a very objectionable thing. The present Bill is, I believe, one of the measures that the Government has introduced with the object of meeting, as far as it can, this matter of unemployment and with the permission of the House I should like to examine the proposals, if possible, to see if they meet the situation without throwing too heavy a burden upon the taxpayer.

In his opening speech, the Minister told us that the consumption of sugar in the Saorstát has been estimated at 100,000 tons a year, of which 80,000 tons are imported and 20,000 tons manufactured at Carlow by the Irish Sugar Manufacturing Company. The Carlow factory in its operation has been eminently satisfactory and, financially, has rewarded the enterprise of those who subscribed the capital with exceedingly good results. It is a matter for regret, however, that most of the profits of this enterprise have left the country. I have been informed that Czecho-Slovakia has been the fortunate recipient of the bulk of these profits. As already mentioned, the Free State imports 80,000 tons a year, of which the quay-side value, at £10 a ton, is £800,000, and, adding the customs duty of £12 a ton, imported sugar thus costs the importer, gross, say £22 a ton. The Carlow factory is in receipt of a subsidy of approximately £20 per ton of sugar manufactured and, after paying the farmers 39/- a ton for their beet and also, I understand, paying the Government an excise duty—I have not been able to make out whether that excise duty is the same as the customs duty on sugar coming into the country, but, if it is, it would be £12 a ton—and also after making adequate provision for the amortisation of capital and all manufacturing costs, the Irish Sugar Manufacturing Company has been able to make a net profit of £85,000 for the year 1932-33. This enabled it to pay its shareholders a dividend of 10 per cent., and to present a balance sheet with a reserve of £416,000 of floating assets. I think the House will admit that that is a very creditable performance.

The Government now propose to build three new factories for sugar manufacture at, I understand, a cost of £1,250,000 and also to pay 35/- per ton for beet of 17½ per cent. sugar content, to pay no subsidy, and also to levy or credit themselves—as they will really be the owners of the company— with an excise duty of £12 a ton. They also propose to set aside annually an adequate sum for amortisation of the capital and to pay, out of the proceeds or profits of manufacture, 4 per cent. on the capital involved.

It has been estimated that, taking all these outgoings into consideration, sugar can be produced at a price not exceeding £21 a ton—that, I think, was the figure the Minister gave us yesterday—or somewhat less than the cost of the imported sugar. As compared with Carlow the new Government factories should do well. There will be no subsidy, and there should be a surplus profit over and above the 4 per cent. the Government propose to pay as interest on the capital of the company. The Minister also stated—I do not think he stated it in this House but he certainly did in the Dáil—that the consumer may be called upon to pay an extra ½d. per lb. for his sugar; that is ½d. per lb. more than he has hitherto been accustomed to pay. This, to me, would seem to be hardly necessary. In fact, one might hope that with careful organisation and good management it would be possible to manufacture sugar locally in these new factories which could be retailed to the public at a price below the price that is at present being charged. We shall have our own experience of Carlow to help us in the proposed extensions of sugar production, and as well I am sure the Minister has not failed to examine the results of the very much larger development of this industry in England. A few recent figures in this connection may be of interest to the House. The acreage in England now under sugar beet is approximately 364,000 acres which is an increase of 43 per cent. over last year. The Government subsidy is now £6 10s. only per ton of sugar manufactured, and the price paid to the farmer for sugar beet has been fixed at from 35/- to 40/- per ton, which depends on the locality, based on a sugar content of 15½ per cent. It will thus be realised that the Minister's proposals for an extension of the industry in the Free State are on a more generous basis.

In the interests of all concerned, it is of great importance that the economic factors should be studied in connection with this new development. I may remind the House that in England the sugar beet industry has cost the taxpayer between the years 1924 and 1932 the sum of over £24,000,000 sterling, and the figures also show that for every man employed in the fields or in the factories in the sugar beet industry the taxpayers have to find 25/- per man per day.

To sum up, we may hope that when the proposals embraced in this Bill are in operation some £800,000 a year which now leaves the Saorstát to pay for imported sugar will be retained in the country: that the heavy bounty now provided by the taxpayers in support of the subsidised industry will not be required in connection with the new extensions and, what is almost more important, that employment will be provided both in the fields and in the factories for a large number of those now out of work and that all this will be in the production of a commodity that the experience of the last six or seven years has shown can be very successfully manufactured in this State. I also hope that with further experience it may be found possible to considerably reduce the price of sugar under this new enterprise to the consumers in this country. I support and welcome the Bill.

Mr. Douglas

I agree with Senator Guinness that this Bill should be passed but I have not been able, at very short notice, in listening to his speech to follow all his arguments. I feel there are a considerable number of points which were raised very briefly by the Minister yesterday and at greater length by the Minister for Agriculture in the Dáil, which require further elucidation. I should like to make my position clear. I welcome, as I think every member of the House does, the proposal to increase the production of sugar here and particularly to increase employment and the utilisation of the land, but I feel that in a matter of this kind, which may cost the public a considerable sum of money, it is a mistake, and very often a serious mistake, to enter into a scheme of this kind without facing the facts and knowing exactly what we are facing. Now I should like to ask the Minister a number of questions dealing with matter which do not seem to me to be quite clear from one's reading of his speeches on this, and the speeches of some of the other Ministers in the Dáil. I understand that the Government propose under this Bill—it is stated in the Bill—to directly subscribe £500,000 of the capital and I take it from hints that have been given that if the public do not subscribe the other £1,500,000 the money will be found by underwriting which will be undertaken by the new Industrial Credit Corporation. I take it, nevertheless, that it is the Minister's desire that the prospectus of the company should be such as to offer terms that will encourage the public to take, at any rate, a fair share of that underwriting.

The questions that I propose to put to the Minister are for the purpose of elucidating points, and if these can be satisfactorily answered it may make it easier for persons to subscribe to the capital if they have the money available. There was a good deal of vagueness in the discussion, perhaps it was inevitable, which arose from debate across the House as to the exact position the company will be in with regard to the charge it is to make for sugar. The Minister suggested that four per cent. would be sufficient to allow for remuneration to shareholders. Now if there was any implied State guarantee I have no doubt that plenty of money would be available at four per cent., but if you are to have ordinary shares, involving a risk of possible losses in the first year or two, it is going to be extremely difficult to get the public to take shares of a somewhat speculative character at four per cent. unless—I have in mind now the statement of the Minister that he does not intend that the company should pay more than four per cent. or possibly five per cent. —the company is going to be in a position to make very considerable profits after a year or two. If that is the case it seems to me that these profits can only be made at the expense of the consumer of sugar.

Mr. Wilson

And of the farmer and the grower.

Mr. Douglas

The farmer and the grower will get the economic price which they are able to enforce. I take it the Government is not going to interfere in that. It will be a matter for negotiation. If the company has to pay all its expenses and a dividend on £2,000,000 of a capital, then it has got to be in a position to charge a price for sugar which will pay all its expenses, pay at any rate four per cent. and make provision for certain depreciation and for a reserve to meet possible losses in a difficult year. I take it from the Minister's speech that this is to be run as a semi-independent company—that as far as the running of it goes it will be like any ordinary business. Therefore, it will be in the position that it will have to charge the price which it costs it to produce sugar, having regard to the price it has to pay to the farmer for the beet and other conditions and subject to some remuneration—the Minister mentioned four per cent.—to the shareholders.

Taking the Minister's own figures, we are at the present moment importing sugar at £10 per ton. In his first speech in the Dáil, the Minister stated that his estimate was that the cost of the production of sugar here would be £21 per ton, and I take it that he included in that a figure for profit to cover the 4 per cent. I am not at all competent to express an opinion on that. I am assuming that the Minister has the information, and that £21 per ton is a correct figure on which we may base our argument. That represents an increase in the cost of £11 per ton which, in some way or other, has to be met by the consumers of sugar. I do not say that that is not right. I shall deal with that afterwards. But that £11 has got to be met and either the State is going to meet it by not charging any excise duty to replace the import duty at present operative, thereby enabling the new company— assuming it can produce at £21 per ton —to sell sugar at something like the present price, or the State is going to insist on its pound of flesh and is going to impose an excise duty equal to the import duty, portion of which the Minister for Finance would naturally want if he is going to balance his Budget, in which case the price must of necessity be increased. I am not saying that it is never justifiable to increase the price of a commodity in order to have that commodity produced inside the country. That would be a ridiculous position to take up. But when the Minister states, as he did yesterday, that the value which we are to get for this expenditure is mainly represented by a sum of £600,000 which he says will be retained in the country, it seems to me that he has got the wrong end of the stick. £800,000 is being paid for sugar imported into the country, less £200,000, which the Minister calculates will still go out of the country in payment of interest, amortisation, capital charges, sinking fund, etc. The £600,000 difference is not a saving of £600,000. This is an arrangement by which £600,000, which goes out of the country, will circulate inside the country. It should not be taken as a saving, but should be regarded for what it is. That £600,000 now spent outside will be spent inside the country—a very useful and valuable thing, but not in itself, to my mind, a justification for spending £880,000, which is the additional cost of 80,000 tons of sugar. 80,000 tons of sugar will cost £11 per ton more. That represents £880,000, of which we will retain in the country £600,000. I suggest very respectfully to the Minister that that line of argument will create a considerable amount of disappointment and that the case that can be made for this scheme does not rest on that line of argument at all.

The increased money which has got to be found for circulation in the country will have to be raised either by getting from the taxpayer in some other way the money paid by way of import duty at present or by charging the consumer a larger sum. The justification for that would be if the total amount of employment given by the farmer in the growing of the beet and by the factories in the manufacture of the sugar was worth the extra cost to the country. If that can be shown, then there is a complete justification for this Bill. If it turns out not to be the case, this will be a somewhat costly experiment. I do not want to be taken as opposing the Bill or adopting a very critical line. But in a matter of this kind where, on the Minister's figures, the extra cost will be £11 per ton, we should be quite clear as to why we are passing the Bill. I suggest that it is not sound economics to say that the reason we are doing it is to keep inside the country £600,000. To expend an additional £880,000 in order to keep £600,000 in circulation here would not in itself be sufficient justification for this scheme, and it is not a wise argument.

I should like to know from the Minister how these new companies will stand in relation to the Carlow factory. The Minister told us yesterday that the Government hope to purchase the Carlow factory if it can be done at a reasonable price. If that turns out to be correct, my question will be unnecessary. Assuming that a sale at a suitable price cannot be arranged, the Minister stated that the Government would honour the agreement with the Carlow factory and that the subsidy would continue to be paid. It seems to me that for a period of three years the Carlow factory will be in a peculiar position. If an excise duty is put on sugar, it will presumably apply equally all round. The Carlow factory will be in the position of getting a bounty which will enable it to produce its 20,000 tons of sugar at a considerably lower figure than these other non-bounty factories. It will be able to make considerably increased profits if it raises its price to the price which will have to be charged by these other companies. I take it that I am correct in assuming that there is no Government guarantee attached to the shares of this new company, though there may be in regard to the interest on debentures.

I am not in any sense an expert on the question of sugar beet and I am not competent to say whether or not it is wise to go in for three factories. Instinctively, I should say that the better course would be to establish another factory and if possible buy the existing one, so as to keep them on the same basis. If necessary, supervise your import of sugar so as to leave the average price which the consumer will have to pay at some lesser figure than that by which it will have to be increased by the operation of this scheme. Possibly it is the intention of the company to go slowly but, from the speeches, one would gather that the idea is to have three, or possibly four, new factories—to go ahead, put an embargo on sugar coming in, and provide the whole consumption of the Free State, 100,000 tons. If 100,000 tons cost £11 per ton more, that will be £1,100,000 more than the same amount of sugar could be got at from outside. I suggest that the justification for that lies entirely on the amount of employment which can be provided.

Senator Guinness mentioned a very extraordinary figure which I never heard before. He said that in England the amount paid by the taxpayer in connection with the sugar industry was 25/- per day for every man employed. That is almost incredible. It would be appalling if our scheme were to cost anything like that. There are many better ways in which the same amount of money per head could be spent in providing employment. I do not want this criticism to be taken as anything more than a suggestion to the Minister that he has not dealt with the whole position, that his economies rest far too much on keeping £600,000 in the country —a relatively unimportant argument though, undoubtedly, of importance—and that he ought to take the whole country into his confidence with regard to this scheme. If it is going to cost something, he should let us know what it is going to cost. If we are to go into it, we should go into it with our eyes open, believing that it is worth while.

Mr. Comyn

I am very glad to have heard the very clear statement of Senator Guinness, and I accept all his figures. They evidently display a great amount of research, and everything he has said must be regarded as absolutely accurate. I also heard the friendly criticism of Senator Douglas. I must say that the Minister when introducing his case did not over-state it. It seems to me that the position in regard to sugar beet is as follows: We have the best soil for the production of beet, and we have a climate which is certainly equal to the climate in countries which send sugar to us. We have the soil and the climate. We ought to have up-to-date factories. We certainly will have them. It is admitted on all sides that the Carlow factory is a good factory. Therefore, we have all the elements necessary for producing sugar at an economic price. The Minister has stated, and stated truly, that these factories will produce sugar at 20/- or 21/- a cwt. That is the economic price of sugar; it is the lowest economic price. We are getting sugar from Czecho-Slovakia, or ancient Bohemia, at £9 or £10 a ton. We must ask ourselves this question: How long will that continue? The answer to that question will depend on this, whether sugar can be produced in Bohemia at 10/- a cwt. I say that sugar cannot be produced in Czecho-Slovakia at 1d. per lb. because that is what it comes to. Owing to the kindness of a very able man I have further information on this question. What is the price of sugar in Czecho-Slovakia? Five pence per lb. That is what they pay for sugar in their own country, when they sell it to us for a little more than 1d. per lb.

Mr. Brown

What about excise duty?

Mr. Comyn

The consumer in Czecho-Slovakia pays 5d. a lb. There may be some excise duty in that, but, I submit, without fear of contradiction, that sugar cannot be produced in Czecho-Slovakia at less than 2d. per lb., which is 20/- per cwt., or £20 to £21 a ton. If that is the case what assurance is there that the low price of imported sugar will continue? There is no assurance whatever. Sometimes we get imported oil very cheap, when the importers are at loggerheads, but when they combine the price of oil goes up. I assure the House, or anyone who is interested in this matter, that it is impossible economically for the people of Czecho-Slovakia to send us sugar at £10 per ton. I am talking about beet sugar. We will talk about cane sugar later on.

In regard to beet sugar, as soon as competition, or possible competition, is beaten down, the producers of large quantities of sugar such as Czecho-Slovakia and other countries will combine and will raise prices. They must do so in order to pay themselves. Senator Guinness has properly stated that notwithstanding the very low price of imported sugar, Great Britain is making great efforts to increase the production of native sugar. They are very wise to do so. I have great admiration for the business acumen and general wisdom of the English people. Why are they doing that? They are doing it because they know that unless they are prepared to manufacture their own sugar they will have to pay, sooner or later, exorbitant prices for imported sugar. They also know another circumstance which the people of Czecho-Slovakia know, that the production of beet is very useful in a proper system of agriculture. It comes in properly in a rotation of crops. It precedes cereals of some kind, which in turn precede the grass crop, as my friend Senator Counihan knows. It was what was called the swedish turnip that gave facilities 100 years ago for the proper rotation of crops and for the proper cultivation of the soil. Now beet will come in and will help us in this country to have a proper rotation of crops, a proper weeding of the soil and a proper cultivation of the soil. In my judgment, it will in that way work, perhaps indirectly, great good. I hope the Minister will give us three or four beet factories. I will tell the House my reason for saying so. I think it is sound economically and far more advantageous to us economically than would appear from the figures quoted by Senator Douglas, which are based on the price of a dumped commodity.

Why do I say that this will be a great advantage? I have some little experience; I am of an inquiring disposition and I find that in the West of Ireland, in the south of Galway particularly, and in other places you will get sugar beet of the highest quality. If that is so why not give employment to your own people?

Mr. Johnson

When did they grow beet in the south of Galway?

Mr. Comyn

I do not think that the leader of the Labour Party ought to interrupt me on an occasion of this kind when I am trying to do something to urge the Minister to erect three or four factories at once to give employment to the people he represents and I am sure very well and energetically represents. We can produce sugar beet in this country, and that being so, these are the elements to be considered. We have the best soil in the world for beet and we have the best climate for beet. We have the newest factories and therefore we ought to have the best factories, and for that reason we ought be able to produce beet at an economic price. Seeing the indirect advantages that will flow from it, this scheme will be of great benefit to the country. Do not let us get involved on the question of £600,000 or £800,000 or £2,000,000. Even if it is £2,000,000, that will be £2,000,000 very well expended. Senator Guinness gave us very accurate figures, I am sure, in regard to the manufacture of beet in Great Britain, and still Senator Guinness, I gather, is absolutely and entirely in favour of the scheme that the Minister put forward. The Minister put forward his scheme fairly. He did not exaggerate it. There is very much more in the scheme indirectly than appears on the question as it is put before us.

Mr. Guinness

On a point of explanation, Senator Douglas expressed surprise at the figures I gave in relation to what the scheme cost in England. These figures were taken from a speech by Sir Herbert Samuel which I heard him deliver myself in the House of Commons. The figures Sir Herbert Samuel gave were endorsed subsequently by a leading article in the London Times. Sir Herbert Samuel stated: “Between 1924 and 1932 it cost the taxpayer over £24,000,000 and it has been estimated that the taxpayer has to find 25/- a day for every person employed in the sugar beet industry.”

Mr. Johnson

Does that mean people employed in the factories or people employed in the fields and in the factories?

Mr. Guinness

It means the people employed in the fields and in the factories as well. Sir Herbert Samuel, who made a close study of it, said in the House of Commons: "The taxpayer has to find 25/- a day per man for those employed not alone in the fields but in the factories."

Miss Browne

I wish to deal with the Bill entirely from the farmers' and growers' point of view and also entirely free from all political prejudices. I have grown beet since 1926 for the Carlow beet factory—with the exception of course of 1931, when we had a dispute.

Mr. Duffy

A strike.

Miss Browne

I represent 150 growers in my loading area on the county executive of the Beet Growers' Association, which sends two delegates to the Central Irish Sugar Beet Growers' Association. I would like at once if the Minister would clear up a point of the greatest importance. I have read very carefully the Official Reports of the debate in the Dáil, but there is one point on which I could get no information. The Minister's scheme is to give 35/- a ton for sugar beet of a sugar content of 17½ per cent. Under the Carlow scheme the growers are paid at present a price of 39/- per ton for sugar beet of a sugar content of 15½ per cent. with 2/6 for every 1 per cent. of sugar content over 15½ per cent. The actual price paid in Carlow last year was 46/6 per ton for the beet. The average sugar content was about 18½ per cent. I wish to know from the Minister what is going to be paid under this scheme. Will an increased price be given to the farmer who produces beet with a sugar content over 17½ per cent.? Perhaps the Minister would answer that question now? I would be obliged to him if he would.

Mr. Comyn

But what about the other months?

Miss Browne

In the other months he may use molassed pulp. The majority of farmers in my area were cattle feeders, stall feeders, and they generally preferred turnips and meal. It is, of course, a matter of fancy. I know from experience they have not used a great quantity of pulp. I have known some farmers—one or two—to leave the tops on the ground just as you do when you are trimming mangolds. That is a wasteful practice. So far as the three months of the campaign are concerned, the beet top has replaced the turnip crop that would otherwise have been used. In that way there is no increase of tillage, no increase of employment.

As regards employment, extra men are required during the thinning operations. I pay men by the drill; that is the way most farmers manage —so much a drill. The thinning operations will not last more than three weeks or a months. That is all the employment that is given in that respect. Beet is a crop that has to be thinned more carefully than mangolds or turnips. The thinners have to be careful not to bring the root over the ground or it will be seriously affected. There is no employment given more than there would be given in the thinning of turnips. Several farmers have entirely replaced their turnip and mangold crops with beet. A next-door neighbour of mine who grew 14 acres of corn before beet was introduced now grows 12½ acres of beet and one and a half acres of corn. The biggest farmer in the area now grows neither turnips nor mangolds; he has his land under green crops devoted entirely to sugar beet.

Mr. Comyn

What does he grow after the beet in the same soil?

Miss Browne

If the farmers have to use pulp—and, of course, they will take it back when they get it for nothing— my opinion is that they will grow neither mangolds nor turnips. In that way tillage will not be increased. Many of the farmers prefer turnips and mangolds and prefer to go on in the old way but if they have to take back the molassed pulp very few of them will grow any green crop except potatoes. I do not want to touch on the economic war. I would like to refer to the amount of employment beet-growing will give as compared to the old system of feeding cattle and growing turnips. In my opinion more employment would be given under the old system because the man raising cattle would be growing turnips and other crops and he would be giving employment in feeding cattle during the rest of the year. In the case of beet, employment is confined to the thinning season and the campaign or the manufacturing season. I think campaign is an appropriate name.

Mr. Comyn

What about the ploughing and seeding?

Miss Browne

Of all the gruelling jobs a man ever has to do on his farm there is nothing to compare to the getting out of the beet crop. I have seen men standing up to their knees in mud day after day. I have seen them going to the station with beet and the rain pouring off their clothes. Beet-growing requires a tremendous amount of care. Sugar beet cannot be taken out of the ground and stored for any length of time because there is a danger that it will deteriorate. You cannot handle it like mangolds or turnips. It continues gathering sugar until the end of November. Beet growers are always beseeching Heaven for a dry October and November. If they do not get that they suffer a great deal of hardship. The loading agent gives you two or three days to load a ten-ton wagon. You have to get the beet out and loaded, hail, rain or snow. I knew of one case last year where a grower could not load in time with the help he had and the crop was left on his hands. The loading agent's job is to get the beet to Carlow in the shortest possible time.

I wish to refer to a statement made by the Minister for Agriculture with regard to the dispute in 1931. He said that the attitude of the growers then was that they did not dispute about the price—it was not that they could not grow beet at the price—but they considered they were not getting a sufficient share of the profits in view of the large subsidy. I do not know how many meetings I went to as a representative of the growers, but at every meeting the argument was that compared to the price of other crops the farmer could not grow beet for the price offered, so that the Minister's statement in that respect was not correct. Although the profits of the factory were always considered, of course, we based our attitude on the fact that we could not grow beet economically at the price. Many farmers preferred to grow potatoes at £4 per ton. Of course the situation is entirely altered now.

A good deal was said in the Dáil about the seed. On my land experiments are being carried on this year with three kinds of seed obtained from Germany. There is a remarkable difference in the appearance. One seed is very much better than the rest. We hope by experiments to find out gradually the best type of seed. Someone in the Dáil expressed the hope that the country would be able to produce its own seed. There was a certain type of seed distributed a few years ago but it bolted and the farmers suffered a considerable amount of loss in consequence. I heard the name of the country from which that seed came but I do not want to mention it now.

There are a few side issues to which it might be well to draw attention. The Carlow company will advance to the grower £5 per acre on his crop up to £200 at the current rate of interest. That is very important for poor people who cannot go to the bank and get credit there. The Carlow factory will also guarantee the cost of the artificial manures. These artificial manures are very expensive and one of the greatest sources of expenditure in connection with the crop. Many poor farmers could not go to the merchants and get the artificial manures on credit or pay for them on the spot, but the Carlow factory has an arrangement by which they pay the merchant for the artificial manures and deduct it with other charges that it has against the farmers at the end. The farmer need not even keep an account. The Carlow factory will do it for him and correctly. The factory has done everything to make the growing of the crop attractive.

I now come to Senator Comyn's question about the effect of the crop on the land. Beet is a root which grows down deep into the land. Mangolds and turnips grow on the top. Beet leaves a certain amount of fibrous roots in the ground containing nitrogen and in that way the ground is enriched, but no other crop gets half the manure that the beet crop gets. Unless we sow beet after potatoes, or root crops where the land has already been supplied with farmyard manure, it must be manured very heavily. If we use stubble you will have to apply the farmyard manure in the autumn and plough it into the land; you cannot manure it in drills. It has to be ploughed in. When we came to cultivation we gave 11 cwts. of artificial manure per acre, which consists of four cwts. of superphosphates, two cwts. of ammonia, four cwts. of kainit and one cwt. of nitrate of soda as top dressing per acre when the crop is thinned. That is a very heavy manuring. When the claim is made that beet leaves the land richer than any other crop you must remember that the ordinary farmer will not give anything like that manuring to mangolds or turnips.

Then, again, it is a cash crop. That is a great attraction to the farmers and, also, that they have an assured market, and the greater the sugar content in the beet the more they get out of it. The land is never to be stinted of manure when it is a question of beet growing and that is why the land is richer after beet than after mangolds and turnips. There may be something in the fact that the roots improve the land. It is very probable. Besides that the cultivation and preparation of the soil must be very carefully done. It must be very fine or else the beet will be forked. Every bit of waste stuff will be scraped up in the factory and included in the tare. The farmer's real object is to get the land deeply ploughed and kept as fine as possible. If the beet is of a medium size there is a higher percentage of sugar content, but the farmer aims at a larger root because he wants to increase his tonnage.

I have here a summary account of three acres of sugar beet grown. I do not know whether I should read this for the information of the House because I do not want to encourage the delusion that there is a fortune to be made in growing beet. The year 1926 was the first year that I grew beet, and in that year I had 19 per cent. of sugar; 1927 was the worst year and 1929 was the next best year. The lowest I ever produced was beet with 17 per cent. of sugar. In the more or less experimental times the farmers were rather shy of a new crop and there was some difficulty in getting contracts filled up. Carlow offered a fixed price of 54/- a ton for a three years' contract entered into, with the usual advances on the percentage of sugar. That was a very big price with a three years' guarantee. Those who guaranteed to grow only for one year were given 50/-. In 1929 the price was 46/- for beet with 15½ per cent. of sugar and with the usual advances. Now here are the particulars of three statute acres of beet grown by me in 1929. From Carlow they sent you a summary account, which was as follows:—"Beet delivered as per advice notes, 49 tons 19 cwts. 1 qr." That is only three quarters short of 50 tons. That would be 16 tons 13 cwts. per statute acre; that is 5 tons 13 cwts. over the average. The gross value of the beet was £128 17s.

Mr. Johnson

What was the sugar content average?

Miss Browne

Over 18 per cent. It was a very dry year. That seems an enormous sum of money for three statute acres, but what about the cost of growing it? Hours and hours were spent by members of the Growers' Association in calculating the expense of growing an acre of beet. Putting everything together, after most careful investigation, the cost was put at £20 per statute acre. That has been arrived at after very careful calculation. Counting the carriage to Carlow, which in my case of 50 tons of beet was £16 12s., which is at the rate of 6/- per ton, and to that has to be added another small charge by the growers' association of 16/7, left me a profit of £51 8s. 5d.

Mr. Counihan

A net profit?

Miss Browne

Yes, a net profit. That crop, remember, was 5 tons 13 cwts. over the average. The price was about 52/- a ton. Now the present price is only 35/- for 17½ per cent. of sugar content and the average tonnage per acre is 11 tons and that is a high average. Considering that there must be a considerable amount of beet grown in the country and with a low tonnage and a low sugar content I leave it to the farmers to say whether they consider the price just offered a fair one or not. That has to be considered now from a different point of view from that which it might be considered in 1931. Then other crops and live stock were of high value. Now the farmer is reduced to beggary. The price of the new oat crop is going to be about 2/6 per barrel and the higher samples are going to fetch about 4/- per barrel.

The Senator will please go on until I stop her.

Miss Browne

It has not very much bearing, perhaps, on the question under consideration, but it shows the actual circumstances at the present time with regard to the position of the people and the chances of getting these contracts accepted. As I have said, the present price for the new crop of oats is something unheard of, undreamt of. Something has happened quite recently in regard to that. About a month or three weeks ago, the price of feeding stuffs—pollard—was £3 10s. per ton. I bought it myself at £3 15s. Quite suddenly, in a week, all the pollard had disappeared out of the country. Last Monday £6 per ton was asked in Wexford Town. I inquired yesterday in Dublin what was the price and I was told that it was £7 10s. What has happened? The pollard has been shipped out of the country. It is being sold in England at £3 per ton, or at least that is the price on the boat. The English feeders are getting their feeding stuff at half or even less than half the price the Irish feeder has to pay at the present moment. That has happened with the knowledge if not with the connivance of the Government. I will not accuse them of conniving at it, but it must have happened with their knowledge.

I know myself that feeders, especially those feeding pigs, have been put to the greatest possible hardship and expense owing to the shortage of feeding stuffs. I know of poor people who had to buy mill dust to feed their pigs and keep them alive until the produce of the new crop was available. That may not be relevant to the Bill, but I am referring to the price of feeding stuffs to show how it may affect the farmer's attitude to the new price offered for beet as compared with the way he would have looked at it in more normal times. That has been done to clear the decks for the new crop coming in, and to justify the new tillage scheme. That is all I have got to say. I will not express any opinion on how the scheme is going to work or on other aspects which have been dealt with by Senator Douglas. The economic and financial side I leave to others. I have given you my own experience as a practical grower.

Mr. Johnson

I congratulate Senator Miss Browne on her very informative and interesting speech, particularly because she has done to some extent what I think the Minister should have done before submitting this Bill to the House. As she has pointed out, the scheme for the Carlow factory was avowedly started as an experiment to see whether the crop would be taken up by the Irish farmers, whether the soil was suitable, whether it could be made an economical crop, and what would be the prospects of growing beet at lower prices than the price that the high subsidy to that scheme involved. I expected that before there was any wide extension of the proposals for beet sugar extraction and the growing of beet, we would have had a close analysis and a report on the result of that experiment.

Senator Miss Browne has given us some details regarding three acres, but there are I think about 9,000 growers in the different counties. We should have had, I think, a very full report of the effects of the experiment, first on the land, secondly on the farmers' pockets and thirdly, on the manufacturers' pockets. It is possible to get something like an idea of the financial results of the factory. We find that the proprietors have practically written off two-thirds of the original capital in seven years. I take it that the original intention of a ten year contract was to enable them to write off the whole of the £400,000 capital in a period of ten years. We had a little light from Senator Guinness who said that the majority of this capital was held in Czecho-Slovakia. It was originally thought, believed and promulgated that the capital was Belgian.

Mr. Guinness

They could not get it.

Mr. Johnson

It is known to some of us that the original project was for a factory of, say, 10,000 or 12,000 tons output, but as soon as the very attractive terms were decided upon and agreed to, suddenly the plans changed and the factory became a 20,000 tons factory, one of the groups which had been turned down came into it, and the majority of the shares, we learn now, are held in Czecho-Slovakia. However, that is past history. What we really need now, I think, is a report as to the effect of this experiment on agriculture which has cost I suppose, £300,000 or £400,000 per year for the seven or eight years. I think we ought to have had that report. I am a bit slow to be enthusiastic over this present scheme without some more information. We have some information somewhere—I think it is in a letter sent to the newspapers some two or three years ago by Colonel Gibbon —that about 9,000 growers are supplying the factory. I take it that with three other factories such as is contemplated we might multiply that 9,000 to, perhaps, 60,000 farmers who may be supplying beet to the four factories. It is important to bear that figure in mind—that out of the total number of farmers in the country we may estimate that 50,000 or 60,000 may be getting the benefit of beet production.

Senator Miss Browne has thrown some light on the probabilities of the growth of beet at the projected price in order to keep these factories going. As she said, the production of beet of 17½ per cent. sugar content was not arrived at at the beginning of this Carlow scheme even in the tillage areas that have been called upon by that Carlow scheme. I find that in 1926 the average yield per acre was 9.1 tons and that the sugar content was 17.3, rather less than the standard that is now spoken of. In 1927 the average yield per acre was 7.6 tons with a sugar content of 16.7. In 1928 the estimated figure was 8.5 tons with a sugar content of 17.1. So that in the first three years in one of the best tillage areas in the country the sugar content was rather less than the standard that is expected to be reached by the people supplying four factories in different parts of the country. That suggests to me that the first few years, at any rate, will not allow the farmers 35/- per ton for beet.

I should have liked to have had information as to what are the prospects of getting supplies at the price in view of the newness of the cultivation of sugar beet in those parts of the country which will be affected by these proposals. It is true that the price now talked about is a price that was talked about as a more equitable price, taking everything into consideration, even in 1925. In England the promoters of beet sugar factories talked about 30/- and even as low as 25/- as a possible price in the future. But we are now talking about a 35/- figure with 17½ per cent. sugar content. I am curious to know why the high figure of 17½ per cent. should be selected now when up to now it has been 15½ per cent. Undoubtedly it has been proved that the sugar content of beet produced in this country is much higher than was anticipated in the beginning, and no doubt those who are familiar with the art, shall I say, of sugar beet cultivation can reach 17½ per cent., but I am very doubtful whether they will do that in the areas which I think ought to be specially served by this particular scheme. I say that because, as I see it, the scheme means that the consuming public, which includes the farming community, are going to be asked to pay £1,000,000 per year to aid agriculture through the price of sugar, and that is quite apart from the revenue requirements. The people that are most likely to need that kind of aid will be the people who are in the smaller and more difficult farming areas, mostly in the western counties, I think, and because of that I think that this figure of 17½ per cent. is probably higher than they will reach for some considerable time.

The McGillycuddy of the Reeks

Will the Senator give us some idea of the area he is visualising for these factories?

Mr. Johnson

I have no particular notion as to the place they ought to be, but it does strike me that they ought to be in the small farming areas, most of them congested, perhaps. I am doubtful, however, whether they can grow beet on some of the land in these congested areas. That is why I feel somewhat doubtful whether this method is the best way in which the consuming public in this country can pay £1,000,000 a year to assist agriculture. That is how the whole project strikes me. It is necessary to assist agriculture; it is necessary that the consuming public in the towns should sacrifice something to assist agriculture, and I would ask myself what is the best way that £1,000,000 per annum can be provided by the consuming public to assist agriculture. This proposition is put forward with plenty of expert backing, but the evidence that has so far been adduced is not very conclusive to my way of thinking. I would think probably that that amount of money spent on flax growing and the industries associated with the production of linen would be a better economic proposition. I am not so sure whether more employment and earning for the small agriculturist would not be provided by the cultivation of tobacco. If we are prepared to spend that sum of money, then it strikes me that other methods than sugar beet production could be chosen at this particular time.

The Minister has given us figures of the average import price of sugar for the last three years—around about 10/- a cwt. I read in yesterday's paper that Cuban sugar is 4/7½ a cwt., and we know that there is a great outcry all over the world about the terribly low price of sugar. Senator Comyn spoke as if this subsidisation of sugar production were something new. Does he not know that there have been for quite a long time trusts and combines in sugar production and that the world production of sugar has been far in advance of the sugar consumption within recent years, so much so that the cane sugar producers are in revolt in Cuba at the present time. I am not saying that we should not produce sugar for this country. I am only questioning the order of preference as to whether sugar production is the best way in which agriculture can be assisted at this time, having regard to the general national interest.

I think that the Minister is perfectly right in discussing the economics of this question from the point of view of the nation collectively and not from the point of view of the buyer and seller within the country, but from that point of view it seems to me that we would be well advised to take the fullest possible advantage, while the world price of sugar is exceptionally low, and to get as much of it as we can at the exceptionally low price at which the world is prepared to give it to us, provided we can find another means equally as good, and probably better, for assisting agriculture with the expenditure of £1,000,000 a year. Some people question this £1,000,000 a year but I will just explain it by saying that the 100,000 tons total consumption is 2,000,000 cwts. and, as between the average price of imported sugar for the last three years and the price which is at present hinted at as the price at which the new factories will be able to produce, we have 10/- or 11/- per cwt., so that 2,000,000 cwts. at 10/- a cwt. is £1,000,000. But I see that that is not going to be a figure for one year or for two years but a continuous figure for quite a long time and that is provided the farmers are prepared to grow the beet at this price. Possibly, if world prices begin to rise and if the present world price for sugar of 4/- to 5/- per cwt. rises to 15/- per cwt. then the margin will go down to about £500,000 a year, but even there you have a very big subsidy for agriculture which is intended not to assist the farmer as a farmer, but the agriculturist as a producer: not to assist the farmer as a taxpayer or ratepayer, but to assist the farmer in his productive operations.

Sufficient stress, I think, has not been laid, in any of the criticisms today, upon one factor which must not be lost sight of, and that is, that out of this £1,000,000 a year, of which I was speaking, from figures that were given by the Minister in the Dáil, I estimate that nearly £6,000,000 of that would go to the non-agriculturists who are benefiting by the scheme. I take that to be a genuine and definite gain of, say, £600,000 which is new earning as a result of this projected scheme, but in regard to the farmers' side of it, unless we can be satisfied that it is a new and extended wealth production and not mere substitution, it cannot be said to be a national gain. I think we need to have some information as to the extent to which beet sugar production is going to be a new agricultural production.

Senators

Hear, hear!

Mr. Johnson

If it is not shown to be new, if it is not shown with some authority that we are extending wealth production or, at least, preventing a decline, then, I think, the claim for national betterment economically has to be looked at with care. If Senator Miss Browne's statement is accurate, that, so far as her district is concerned, the Carlow scheme does not appear to have resulted in an increase in the area of tillage, or an increase in the production of wealth from the soil, I think we should examine this matter with great care. She did give some information as to the effect of this new crop upon future crops, and if my memory is not very far astray—perhaps Senator Wilson will confirm me in this —one feature that was stressed in favour of this experiment by the then Minister for Agriculture was that it would have a beneficial effect upon future crops and make for better farming. I think it would be well if we could get some evidence as to whether that has been the result of this experiment.

I want to deal with just one or two small points in connection with the Bill itself. In the Carlow Sugar Bill, as we call it, there was inserted a section which ensured that the wages paid to the labourers in the factory would approximate to a fair wage. There was that kind of a guarantee. There is nothing touching that subject in this Bill at all and, in view of the general circumstances in which the Bill is being promoted, the need for supplying sugar at not too high a price to the consumer, the need for paying the farmer a reasonable price for his beet, there will be some necessity for ensuring that the wages paid to the labourers in the country and the conditions of labour in the factories will not be upon the low wage scale that has been suggested in some quarters very recently indeed. I hope that the Minister will explain to us at what point, whether in this Bill or anywhere else, there is going to be some guarantee given that the wages paid in the factories will be of a fair character. On the question of the capital, £2,000,000 is mentioned. I would just like a little light on that. The Carlow factory, built in 1925-26, was capitalised at £400,000. Presumably, owing to the fall in prices generally, a similar factory could be erected at a considerably lower price than that. Four factories at £400,000 would be £1,600,000. There is a margin there of another £400,000. Is the £2,000,000 put forward as an outside figure with the contemplation of five or more factories: that is, that the Carlow factory, depreciated as it is, being still valued at its original figure and four other factories with the same capital? I am not now speaking of the costs of the factory, but of the capital of the company. The figure of £2,000,000 requires a little explanation.

The question has been touched upon by Senator Douglas, and I am going to repeat his question as to what are the factors that are going to determine the price of sugar in the market. Is it to be a monopoly? Certain considerations will weigh: the importance of satisfying the farmer as to his price and the influence of the farmer upon the factory and upon the factory directors, the demand for a price to cover his costs or what he alleges to be his costs. I take it that the competitive price outside will have no effect at all. I think the Minister should give us some hint at least as to what is going to determine the price that the consumer will pay for sugar, and what is going to be the limit of the dividend. The Minister has hinted at 4 or 5 per cent., but there is no limitation of profits in this Bill. There is neither a guarantee of remuneration for the capital nor a limitation of profits, and as the Minister only contemplates holding £500,000 worth of capital in a £2,000,000 concern, the holders of three-fourths of the capital will be very insistent that, if they are going to take the risk of lower than 4 per cent. they will have to get the advantage if they make more than 4 per cent., and I think they will apply a great deal of pressure to bring to themselves a much higher rate of profit than 4 per cent. or 5 per cent., unless there is something in the Bill or in the articles of association, or unless some other method is adopted, of limiting the profits, even if this is accompanied by a guarantee of dividends.

I think the information that has been given by the Minister is insufficient. I am quite prepared to say that the proposition to develop the beet sugar industry and the manufacture of sugar in this country is one that should be supported and backed by the State. As to, as I said earlier, the order of preference for the benefit of agriculturists, I am doubtful whether this should have the first; but I certainly think that we ought not to have had this proposition put to us without very much more information than has yet been given: with the full report of the result of the experiments in 1925 and 1926 and onwards presented to the House and to the country.

The McGillycuddy of the Reeks

We had some very interesting and instructive speeches on this Bill. We had a fine oratorical effort from Senator Comyn at the end of which he told us that sugar was being sold in Czecho-Slovakia at 6½d. per lb. while sugar from that country was being sent in here at 1d. per lb. Apparently, the Senator had entirely forgotten the situation as it exists with regard to cane sugar. In Jamaica, the sugar factories are closing down and the plantations are being turned over to the production of soap and cocoa-nut oil. They can get nothing for their cane sugar and there would, therefore, be an everlasting supply. Senator Miss Browne gave us a most excellent dissertation on the practical growing of beet, and I hope that many people will profit by it. I have seen beet grown in Belgium and France. I have had experience of it in England, both outside and in the factory. I have seen attempts made to grow it in my own county. Every detail that Senator Miss Browne mentioned in connection with the growing of beet is perfectly correct, but in one or two ways the Senator dogmatised, and I think you cannot do that in the case of farming because you are dealing with the soil. Senators are aware that in the Country Wexford the soil is heavy and that it requires to be dealt with differently from the soil in, say, the western counties. You can use a great deal more artificial manure on Wexford land than you can in the western counties. If you were to use only artificial manure on the land in the West—if the small farmer whom Senator Johnson was discussing just now were to do that—he would simply run out his land in two or three years. Senator Miss Browne raised another point about offals. Our experience of the use of offals in the West is that without some admixture of mangolds and turnips milking cattle at any rate will go back very seriously. Therefore, I think that the argument that Senator Miss Browne used in that connection can only apply to the tillage counties. There seems to be something wanting in pulp treated with molasses for the feeding of milch cattle, so that if the production of milk is to be kept up you require, in addition to the offals obtained from beet, to feed milch cows an admixture of mangolds and turnips.

And they had to bring their own tea and sugar.

Mr. Wilson

I am not belittling the scheme. In these times of stress it is a good thing to have something to do, even though the pay is not good. There are certain requirements regarding the production of this crop. When the farmer has the labour in his own family, and when they are willing to work practically for nothing, it will give them something to do. Where the soil is suitable for the growing of the crop, and in an area where there is limestone and water available and labour practically for nothing, these factories are going to be a success. But there is another matter. There is a contract running in Carlow which will not finish until 1936. I understand this company may purchase that factory, but supposing they do not, what would be the condition of the farmers surrounding Carlow, where they have been paid at the rate of 46/- a ton? Will there be any alteration, or could there be any alteration? Will the farmers there be allowed to have the advantage of these contracts? That may cause a great deal of annoyance to the new producers. I would like the Minister to tell us what is in his mind in the event of this company not purchasing the Carlow factory.

The whole project is, of course, in keeping with the Government's policy, which is to provide in this country work for the people who cannot now get away. Their policy is to try to reduce the trade balance and they will do that irrespective of cost. The Minister or the Government do not seem to mind what it costs. That seems to be the idea—reduce the trade balance but never mind the cost. In this case I think the halfpenny a lb. on the consumer is not too much to pay. I hope that with the monopoly which the Minister will have he will not tie the farmers down to 35/- a ton for sugar beet with a 17½ per cent. sugar content.

Mr. Dillon

I have already subscribed to the principle of this Bill. In my opinion it will afford a very important outlet for a great quantity of family labour in this country. It will certainly afford a great opening for that type of labour. It is a highly important project, taking into account the potential demand there is for sugar in this country. As regards the number of factories it is intended to set up, I may say that I am not concerned with the location of those factories or anything like that, but I understand that in America some years ago when they were establishing the beet industry for the manufacture of sugar they centralised the manufacture in a manner somewhat similar to what we did in a smaller way in Carlow and it was found that system was not as successful as if the factories were more widespread.

I should not like the Seanad to form the impression that the proposals now before it have not been formulated as the result of very deliberate and searching investigation. For almost 12 months an inter-Departmental committee, consisting of some of the ablest officers we had at our disposal, investigated the advisability of extending the sugar beet growing industry in the country and reported very strongly in favour of such extension. That report was under consideration by the Executive Council and the Ministers immediately concerned for a further period. It is a result of the investigation on the part of the original committee and the subsequent consideration of that committee's report that the Bill is now before the Seanad. It might be better, as has been suggested by Senator Sir John Keane and Senator Jameson, if the memorandum of association of the company were set out in greater detail in the schedule but our great difficulty in this matter has been the question of time. If we are not in a position to form this company before the end of this month it means that a further year will be lost; that it will not be possible to get the factories going in time for the 1934 campaign and that the farmers and the community as a whole will lose the very great advantages which we believe will accrue to them from this industry.

Senator Johnson expressed the criticism that at the outset further particulars should have been given to the Seanad as to the results of the experiment which has been carried out at Carlow. I was under the impression that the country as whole, and, particularly, I should say that part of it which is represented in the Seanad, was fully aware of the results of that experiment. I did say that it had shown, at any rate, that the Irish Free State was possibly the country best adapted in Europe for the cultivation of sugar beet and for the establishment of a sugar manufacturing industry. My reasons for that were that from the very beginning the quality of the beet grown in this country was exceptional and the yield was exceptional also. In 1926, the first year, the sugar content of the beet was 17.3 per cent.; in 1927 it was 16.7 per cent.; in 1928 it was 17 per cent.; in 1929 it was 17.5 per cent.; in 1930 it was 17.6 per cent.; in 1931 it was 17.4 per cent.; and in 1932 it was 18.5 per cent. The fact that from the outset the sugar content of the crop approximated to 17½ per cent. is the reason why that figure, rather than the lower figure previously chosen, has been taken as the standard for calculating the price to be paid to the farmer by the committee which considered the question. Similarly, the average yield for the five normal seasons I referred to has been of the order of 9.8 tons per acre. As to the later years, in 1929 it was 10.9 tons; in 1930 it was 11.1 tons; and in 1932 it was 11 tons per acre. I am dealing with the normal years, when the normal growers were producing the crop, when it tended to be of the order of 11 tons per acre. I am advised that these are exceptional results in Europe.

Accordingly, we are in this position, that we find ourselves with soil, and methods of cultivation, and general usage in this country particularly well adapted for the production of this crop. We have to consider whether it is economically a profitable thing for the community as a whole to encourage and further develop this industry. In that connection, I should like at once to controvert the suggestion of Senator Sir John Keane that the criterion by which I asked the Seanad to judge this matter was, not that it was on the whole a good thing, but the fact that we should merely save £600,000; that our adverse trade balance should be reduced by that amount and that I stated that that standard of judgment should be applied in considering the economic value of every proposition.

Of course I did not say anything of the sort. Possibly I did not express myself very precisely in regard to it, but I did endeavour to point out to the Seanad that neither our soil, nor the labouring time of our agricultural community, was fully utilised at the present moment, and that if we could secure a fuller utilisation of that soil and of the ordinary hours of labour of the agricultural community and, at the same time, keep within this country, and not expend outside it, £800,000, there would be a net economic gain to the community as a whole of approximately £600,000. That is not to say that I would contend that if our people were fully occupied, and if our soil was being fully utilised to the best advantage, there would be any economic gain to the community if we were, in these circumstances, to divert the energies of our population and the uses of our soil to producing something which we could buy 50 per cent. cheaper abroad. If these circumstances were to arise, I should say that the community as a whole would lose by the excess price which it would have to pay for the commodity which it could import more cheaply from abroad—in the circumstances, I should like to repeat again, in which our people and our soil were being fully employed. But when that is not the case, when we find our fields lying fallow, when we are told that our cattle trade is decaying, when the indications are that, no matter what political circumstances exist as between us and Great Britain, there must be a restriction in our cattle market and that, accordingly, our farming population will tend to become more and more idle, then I say that if we can cultivate more of that soil and employ more of the time of our population and, at the same time, save to the community as a whole this expenditure upon foreign-manufactured sugar, economically the State and the people will be the gainers, and that is the economic justification for this scheme.

When I am on that point I should like to emphasise that it is not merely the farming population who will be the gainers. It is true that the growers will gain to the utmost extent. In order that the industry should be established, it, as an industry, will have to be subsidised by the community as a whole, and the extent of that subsidy will depend upon the difference between what it costs us to produce the sugar at home and the price at which we can buy it abroad.

Hitherto, in discussing this Bill I have confined myself possibly to a consideration, not of the industry as a whole, but of the proposed extension of the industry which the Government is asking the Seanad in passing this measure to sanction. I referred to our present import of sugar of 80,000 tons and dealt with the economic consequences of the Bill upon that basis. Let us consider our total sugar requirements, as Senator Johnson considered them, because we should have to consider, in any event, at the end of the next three years, whether we proposed to continue the Carlow experiment or not, or whether we were going at that period to extend the sugar industry or to close down the Carlow sugar factory and import all our sugar from abroad. It is true that our average imports over a considerable period of years indicate that, so long as our population remains more or less in the neighbourhood of three millions of people, we shall require, approximately, 100,000 tons of sugar per year and we can—again on the basis of the average prices paid for the past three years—buy that sugar for £1,000,000, or we can produce it ourselves here in this country at a cost to the consumers, as considered apart from the community, of £2,000,000. The difference between these two sums, of £1,000,000 for foreign sugar and the £2,000,000 which the consumers would have to pay for home-grown sugar, represents the gross subsidy which the consumers, considered as an element apart from the rest of the community, would have to pay to the sugar producers, whether they were employed as growers or as factory hands in the factory. That gross amount is £1,000,000.

At the present moment, however, in order to produce not the whole of our sugar requirements, but approximately one-fifth of our sugar requirements, we are paying, as a subsidy to the Carlow factory, something like £330,000 per year, and we shall have to pay that for the next three years. The difference between the £1,000,000 gross subsidy, paid by the consumers to the producers, and that £330,000, paid again by the consumers, in this case to a limited number of producers in this country, of £670,000, represents the actual net increase in subsidy which under the new proposals, will have to be paid to the farmers. Where does the £670,000 go to? Possibly, it might be rather misleading to consider that figure, but having brought it out that the net increase in the subsidy is only £670,000 and not £1,000,000 as has been talked about here, I should like to consider where the total subsidy of £1,000,000, which represents the sum of the existing subsidy and of the new subsidy will be distributed. Of that £1,000,000 approximately 60 per cent., or £600,000, will go to farmers and carriers. To the suppliers of raw materials, other than fuel, and the factory workers, there will go approximately 12 per cent., or £120,000. To the suppliers of fuel, which, if the Seanad likes to take the most adverse view of the proposition, they can say will be imported from abroad, there will go 8 per cent., or £80,000, and for the remuneration of capital and to provide for machinery, rates, insurance and other incidental expenses, 20 per cent. of the subsidy, or £200,000.

The first thing I should like to point out is this, that the whole of this £1,000,000 is not going into the pockets of the farmers as farmers. In fact, I should say that about 55 per cent. or 50 per cent. of it might go into the pockets of farmers as farmers, and the rest of it, with the exception of about 20 per cent., will be distributed here to other types of workers and producers. It will go, for instance, to the suppliers of raw material, such as limestone and to those who supply bags for the sugar and pulp and for filtering purposes. The farmers do not get it all, and even if the whole subsidy did go to that section of the community, they themselves provide quite a considerable proportion of it. However, the subsidy will be distributed in the proportions of 50 per cent. to the farmers, 30 per cent. to other nationals of the Saorstát, and only 20 per cent. would in any circumstances find its way abroad. We are down to this point, that, as I said in introducing this measure, the net outlay which we should have to make from year to year in order to put ourselves in the position of providing for all our sugar requirements would be of the order of £200,000. When we take that sum from the £800,000 which otherwise we should have to pay in order to provide for our sugar requirements at the present moment from abroad, we get the immediate economic advantage to this country of the proposals now before the Oireachtas. Further than that, however, if we consider the position three years from now, we will see that when we would have to make the choice, to which I referred a short time ago, of either abandoning the Carlow project altogether and deciding that we would procure all our sugar requirements from abroad, or deciding that we should fill all our sugar requirements by home-grown sugar, we will find that the economic advantage to the community as a whole, instead of being £600,000, as I have already indicated, would be £800,000. I think that it is to that basis, and that basis only, that Senator Jameson, Senator Sir John Keane and other Senators, who have expressed doubt as to the economic advantages of this scheme, ought to direct their criticisms. I think that the proposition, as I have stated it, will stand investigation and that an analysis of it will convince the Senators that there is a great economic advantage, in view, particularly, of the circumstances of our farmers and the present position of our industrial population generally, in this scheme, because it will enable us, as I have said previously, to utilise the soil and labour that at present is without employment.

In that connection I should like to get back again to the figures which I gave showing, first, that the additional cost of producing sugar here, over and above what we might buy it for, would be £1,000,000, and of pointing out that we have to offset against that the £330,000 which we are paying to the Carlow factory, leaving us with a net increased subsidy of £670,000 based on an annual consumption of 100,000 tons of sugar. An increase in the price of sugar of ¾d. in the lb. would represent approximately £700,000, and that just balances the £670,000 worked out in another way. That is the basis of our calculation: that an increase in the general price of sugar of ¾d. a lb. to the consumer is to be anticipated.

No. They will not be guaranteed in any way. The investors in the company will have to look for any assurances in regard to dividends to the technical skill and general efficiency of the management. In that connection I may say that the Government have succeeded in securing the services, as technical adviser, of possibly one of the very greatest experts and one of the most experienced persons in this particular industry in Europe. On the question as to how the new company will stand in relation to the Carlow factory, quite frankly we should like if the new company would take over the Carlow factory and negotiations will be opened up to that end. What the position will be if the negotiations fail I am not in a position to say, beyond this: that the original contract with the Carlow company will be fulfilled to the letter. I would like to safeguard myself by saying that the existing company naturally would not be permitted to take undue advantage of the situation that would be created by the establishment of the new company: that is to say, they would not be allowed to force down the price of beet to the growers, and at the same time continue to earn the subsidy upon the old basis. In considering the question of the existing contract there would have to be a spirit of give and take as between the existing company and the Government, and if by reason of the new policy of the Government in regard to the sugar beet industry the existing company were to be put in the position in which it might make exorbitant profits at the expense of the consumers on the one hand and of the growers on the other, then I think the Government would be bound to take special steps to deal with that position while securing to the company the return which it might normally have anticipated it would secure from the existing contract.

Senator Miss Browne, in the course of a very interesting speech, rather indicated that she thought the price the new company would offer to the growers would not be an attractive one. She based that on certain figures which I ask the Seanad not to accept without a good deal of consideration. It will be remembered that the basis of Miss Browne's contention was that it cost £20 per statute acre to grow beet. I should like the Seanad to consider what the position of the beet growers was when they negotiated the beet contracts for 1931-32. They agreed to take 39/- per ton for beet of 15½ per cent. sugar content. The average sugar content for a number of years prior to that was 17.22 per cent. It may be taken that that was the basis upon which the agreement with the Carlow company was negotiated in 1931-32. 39/- per ton for 15½ per cent. beet gives an average price per ton of 43/4d. The average yield per acre for the five normal seasons was, as I indicated already, 9.8 tons. Let us assume that it was 10 tons, to give some margin to Senator Miss Browne's figures. On that basis, the produce of a normal acre to a normal grower at 39/- per ton for beet of 15½ per cent. sugar content would yield £21 13s. 4d. From that, we have to allow for carriage at 6/- per ton, which would amount to £3. Deducting that from the gross price which the grower would receive for 10 tons, we are left with £18 13s. 4d. to set against a net cost of production of £20 per statute acre. When they negotiated the agreement of 1931-32, the growers agreed to take a price which would be to them a losing price if the figure of £20 per ton which Senator Miss Browne submitted to the Seanad as the cost of production per acre was an accurate figure. I think that none of us is going to believe that the representatives of an association of some thousands of growers would have been permitted by the rank and file to make what would have been a very bad bargain indeed. Accordingly, I ask the Seanad not to believe that the cost of production to the grower is anything like £20 per statute acre. I think that it is more of the order of £16 per statute acre, if even so much.

The Minister knows as well as we do that we have not enough information about the matter, yet we are passing the Bill. We do not want to stop it, and we do not want the Minister to be placed in a difficulty. The House is giving justification for doing a thing about which it knows nothing.

Mr. Johnson

Saorstát Eireann, Ltd., as a promoting company is going to hand over to the new company when formed the things they have in hand.

Question put and agreed to.

Cathaoirleach

The House is aware of the Minister's statement asking that the Committee Stage of this Bill should be taken to-morrow. It is a question if the interval is long enough to allow for the formulation of amendments.

Mr. Johnson

If possible I would like to have a section in this Bill on the lines of a section that was inserted in the Carlow Beet Act, dealing with wages and conditions in the factories. I could not do that by to-morrow.

Sir John Keane

I think it is most unreasonable to ask us to finish this to-morrow. It is a Bill of the greatest importance and we had no idea that it was going to be taken to-morrow. To-day we are only going into the general principle. We have not examined all the sections to see whether we are going to have amendments or not. We cannot say now what amendments we will have. It is a farce to come along and tell us that we are to consider this at 24 hours' notice. I hope the Seanad will divide on that question. I should like also to ask whether under the Standing Orders notice should not be given. I should like to know the procedure under the Standing Orders.

Cathaoirleach

It is quite within the option of the House to do what it desires. I am consulting the wishes of the House.

Sir John Keane

The Minister himself said that we could have a separate or special discussion on the issues involved. The appropriate Minister or Ministers will be present.

The Seanad adjourned at 6.45 p.m. and resumed at 7.50 p.m.

Seanad Éireann debate - Thursday, 17 Aug 1933