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Seanad Éireann debate -
Wednesday, 11 Apr 1934

Vol. 18 No. 14

Sheepskin (Control of Export) Bill, 1934—Second Stage.

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

The scheme of this Bill is, I think, quite simple to understand. It provides for the regulation of the export of sheepskins. It provides that no person can export sheepskins from the Saorstát except under a licence, to be issued in accordance with the provisions of the Bill, by the Minister for Industry and Commerce. The object of the introduction of the Bill is to secure the development, or the revival, of the fellmongering industry in the Saorstát. The industry may not be of very great importance when compared to others, but it did provide in the past not inconsiderable employment for adult skilled workers in a number of towns in the Saorstát. During the period of the Great War and in subsequent years, the industry dealt with all the sheepskins produced in the Saorstát but in latter years it has declined and, quite recently, its complete extinction appeared to be extremely likely. One of the reasons why the extinction of the industry appeared likely was that the sheepskin buyers from Great Britain were organising themselves to secure control of the supplies here, and to that end were paying for sheepskins prices which the Irish fellmongers could not afford to pay and which, in their opinion, were not justified by the state of the market, having regard to the prices to be realised for the pelts and the scoured wool. It is proposed that the Bill will be operated so as to secure an adequate supply of skins for the fellmongering yards here while at the same time checking any tendency that may appear on behalf of Irish fellmongers to take advantage of a closed market in order to depress prices unduly. The prices at which sheepskins should be purchased can be easily determined, having regard to the prices secured for the pelts and the wool. As long as that price is being paid there is no reason why any sheepskins which the Irish fellmongering yards are capable of dealing with should be exported.

There was a number of firms engaged in the industry here some years ago. At the present time only three are in operation, although I understand that certain firms that were, until recently, in operation and that are now inactive will commence operations again as soon as this Bill is passed into law. While, in a sense, this is a minor measure, some apprehension was caused and was given expression to in the Dáil on the grounds that the fact of restricting people from exporting sheepskins might, in some way, affect the price of sheep. I think it is clear that that cannot happen. The price of sheep— we have an exportable surplus of these animals—will be determined by the export price, so that any reduction that might take place in the price of sheepskins would be a matter of concern only to those who are dealing in the butchering of sheep here and not to those engaged in the production of sheep. It is not to be anticipated that any reduction in price will take place that might not otherwise occur. Last year, of course, there was a substantial increase in the prices paid for skins. That was due to certain causes, one being the alleged fact that British fellmongers were paying a price for skins that was not justified by the market in order to complete the efforts that they have been making in recent years to control the whole supply in this country. The British fellmongers, of course, are operating on a much larger scale than the fellmongers here. The number of skins that they purchase here represents only a very small proportion of their total purchases, and consequently a temporary inflation of prices here would be a matter of little concern to them, even though it might operate to put a number of Saorstát fellmongers out of existence altogether. There is no reason to fear that any difficulty will arise in disposing of the products of the industry which have always been in demand. In fact, at the present time the demand appears to be in excess of the supply. The persons engaged in the industry have no apprehensions that they will not be able to dispose of all they can possibly produce.

The aim of the Bill is to secure that all the sheepskins available here will be fellmongered in the country. At a later stage it may be possible to secure the establishment here of an industry for the tanning of the pelts but that industry is not one which can be easily brought into existence because it requires a very high degree of technical skill that is not yet available to us. We trust, however, that the operation of this measure and the revival of the fellmongering industry will at least be a step forward towards the establishment of the other industry at a later stage.

I would ask the Minister to justify the policy of establishing an industry such as fellmongering here. He did not give us any particulars of the numbers likely to be employed. Admittedly, as the Minister himself said, this is going to be done at the expense of the primary producer. He says that the whole object of the Bill is to give the home fellmonger the fells at a cheaper price than is now being paid for them. He said that they cannot afford to pay the price that the extern buyer is prepared to pay; and that, therefore, they have to be protected. Surely, that seems unreasonable. This Bill seems to be part and parcel of the policy of dealing with the agricultural industry of this country in a piecemeal way. Sheep, and the by-products of sheep, are part and parcel of our whole agricultural industry and should be considered in relation to other branches of it. It would also appear that the amount of employment to be given is very small. Although I do not clearly understand all that fellmongering involves, or the further processes of dealing with the hides, which the Minister admits cannot he done at home at present, I wish he would give us more particulars about this industry that is now going to be protected at the expense of the primary producer. I am not convinced by the argument that there is going to be no reaction on farmers, because if there is a higher price given for the fells, that price, presumably, would be passed on to the farmers, so that in some way this will affect the price farmers will receive for sheep.

I do not feel very anxious about this proposal, because the industry is hardly one about which one can form an opinion. At present we know that the price of sheep is controlled very much by the imports from Australia of large quantities of frozen mutton. As to the probability of this proposal helping the sheep industry, I have grave doubts of such a result. However, anything that would help to increase the price of sheep for the producers should be given every encouragement. From my experience the tanning of sheepskins is a very small business. I doubt if it will be of very much value here. I doubt if these proposals will materially increase the price paid to producers of sheep because wool is selling at a very low price. The commercial value of plucked wool is not very great. I hope the Bill will be a success, but I have grave doubts if it will be possible to work up an industry that will be a paying one. This question should have been well thought out by people who have experience before I could give it very strong support. It would be a mistake to have an industry started without having grounds for believing, from the previous history of the industry, that it would be a success. Instead of this proposal it would be better to have a committee of inquiry, who would go into the matter before asking the Seanad to support this Bill.

Whatever our opinions may be about this matter I do not see what we can do now. At the same time, it would not be right at this stage for Senators, who think there is a considerable element of robbing Peter to pay Paul in this Bill, to abstain from saying so. The Minister told us that there is a ring of English buyers of sheepskins, and the form that ring takes is not to cut down prices, but to give higher prices; prices which we have been given to understand are higher than the market justifies. Well, these prices now go into some Irishmen's pockets, but in future smaller prices will go into the pockets of some Irishmen. This is an attempt to resuscitate the industry of fellmongering, which we are told is moribund. I suggest that the industry of the farmers who produce the sheep has an equal claim to be moribund, or certainly is running very close to it, looking at things as they are in this country at present. What the gain will be, or, if there will be any net gain on the balance between the two, I cannot say. It is quite clear that a great deal of whatever may be gained by the Bill will go to some people, while others, who are equally citizens, are not in a very good way.

I am sorry I was not in time to hear the discussion that took place at the opening stage of the debate. It was impossible for me to be here in time. I am not opposing the Bill at this stage, but I want to say that I cannot support it in its present form. If the Minister will accept an amendment, which I will try to frame for the Committee Stage, I think the Seanad would be, justified in passing the Bill. In his speech in the Dáil the Minister made great play with a statement that has been made from time to time that where there is an export surplus of agricultural produce the value is regulated by the export price. I made that statement on many occasions and I stand by it. The Minister went on to argue from that that as all sheepskins are bought on the sheep, there is export competition for sheep, and that consequently the farmers cannot lose. However, many statements, which are true in the main, have exceptions, and to understand the exception to the rule here, one should understand something about that particular class of trade. The Minister will find that practically all of our most valuable sheep are not exported at all, that the very heavy wethers and nearly all the fat ewes are killed for the home trade. The skins of these are much more valuable than the other skins and consequently there is no export competition for that class of sheep. The Minister cannot hold to the rule that the export trade will regulate the prices for that class of sheep. The majority of the sheep exported are lambs and small hoggets, and there I agree the skins will have to be bought against competition. It is all nonsense for the Minister to say that the farmers will not lose anything. Every butcher who buys sheep regulates the value of the offal in fixing the price and if, as the Minister admits, someone will have to lose, in the finish it is the producer who will lose. The Minister may say that one or two shillings per skin, more or less, will not mean much, and that the butchers can afford it. I can assure the Minister it is not the butchers who are going to lose. Butchers could not afford to lose one or two shillings on sheep. If the Minister thinks that trade is carried on in that way, and that one or two shillings per sheep does not matter, he is making a great mistake, because that amount may represent the whole profit of butchers on many occasions, and at some periods of the year. In his speech in the Dáil the Minister stated that fellmongering is better managed by the English fellmongers than in Ireland and that as a result of the process the skins undergo they command a better price in England. If the English fellmongers are able to get better prices for the skins, the price of sheepskins in this country is going to be less than it would be if there was export competition. As Senator Bagwell stated, I cannot see why one particular class of the community, the farmers, should lose in order to provide employment for a certain number of people here. If the Minister wants to create such employment, the nation as a whole should contribute—not the farmers alone.

Senator Counihan said a good deal at the beginning of his speech with which I agree, that the price of fat ewes and big sheep is regulated by the home market, and that the price of lambs and hoggets is regulated by the international market. I am sorry the Senator was not here to listen to the statement made by the Minister, because that statement convinced me, notwithstanding all the arguments which have been so clearly put by Senator Counihan, that this Bill is desirable. It appears that the fell is the skin with the wool on it, and that when the wool is removed and washed, then you have wool for sale and a pelt for sale. In former times fellmongering was a considerable industry in this country, and fellmongers bought skins here and there and manufactured them in towns like Limerick, Athlone and other places. Having taken the wool off the fell, washed it and made it marketable, they sold the pelt either to tanners in this country or to others who exported the pelt. It appears now that what they will have to do, if fellmongering is established again, as I hope it will, is to remove the wool, wash it and make it fit for sale. But they will, for the present, have to export the pelts, as the trade is centred amongst large combines. It is easy for a combination of men so to arrange matters, by giving a high price for the fell in one place, where there is local competition, and a low price in another place, where there is no competition, to destroy altogether the fellmongering industry where it is trying to survive here. That would be a great loss. I shall endeavour to explain why. We do hope to have tanneries in this country. As the Minister has explained, the tanning industry is a highly specialised one and requires great skill. As the foundation of that industry, you must have this other industry of fellmongering. If you have not a fellmongering industry, you cannot even begin with a tanning industry. Many people are quite unaware of the animal which produces the leather which they wear as boots, uppers, soles or even gloves. Sheepskin is very useful in the manufacture of leather of high quality. The tanneries do not prepare the pelt for tanning. That is a separate and distinct trade. In order to have a tanning industry, it is necessary to have a fellmongering industry in a fair way towards establishment.

Can you not tan the hides?

You must have the pelt before you can tan it.

I am talking of hides.

That is another day's work. I am surprised that Senator Counihan should be so irrelevant. Why does he not confine himself to sheepskins? I have some experience of tanneries and of fellmongers and fellmongering and I think that the Bill is wisely conceived, assuming that the Minister is going to do for this industry what he has endeavoured to do for other industries—that is, to build it up. I think that this is the foundation of a plan for restoring to this country the tanning industry which we had even within the last 20 or 30 years.

Senator Comyn states that the Minister is going to build up this industry so as to enable the tanning industry to be revived. I should like to ask the Senator at whose expense the Minister is going to build up this industry. The explanation given by Senator Counihan regarding sheep used by the home market shows clearly that, in regard to ewes and the heavier class of wether, there is no competition for export at all and that the price of the sheepskin is part of the price which the farmer gets. If that price be reduced by the stoppage of exports, naturally the producers of that particular class of sheep will lose. I should like the Minister to explain why this industry is not able to stand up to the opposition offered it. I hardly believe that any groups of traders in England are going to give too much for our sheepskins. That would be a peculiar explanation and one which would require substantial proof. Perhaps the Minister would state what the cost of production in this fellmongering business is here as compared with the cost in Britain. If it is greater, why is it greater? Is it because the turnover is less? The raw material is here at the doors of these fellmongering factories, while the sheepskins have to be sent across to Britain. How can a higher price be given under these circumstances by the British manufacturers? That requires explanation. Even in regard to the milling trades, I was always of the opinion that there was no reason why the grinding should not be done as well in this country as in Britain. We could not make that possible and we had to put a block on imports by way of a tariff. That has worked out very well in regard to milling, but I am sure that the cost of the milled products is greater than the extent of the tariff. I should like the Minister to tell us how wage costs and working costs in the fellmongering industry here compare with those in Great Britain. We are entitled to that information before we agree to the passing of this Bill.

Every one of us would do everything we could to have tanneries established in this country. At one time, the tanning industry was one of the most important industries we had. It is an industry for which the raw material can be got within the country, which is very exceptional in the case of those industries which enjoy the advantage of a tariff to-day. What I should like to know from the Minister is if the manufacturers of leather are to have the advantage of two tariffs. Are they to have the advantage of cheaper raw material for their leather at the expense of the farming community than their competitors outside and, in addition, is the consumer to be charged more because of the tariff on the leather he uses? I think that that would be unfair. I agree that there should be a tariff on leather coming into the country, but I think it is unreasonable to expect the very limited number of farmers who have to depend on this trade to be penalised. Let the general consumer or user of boots pay for the leather but it is unfair that the farming community should be penalised and that they should be compelled to sell their goods at a lower price than they can get outside.

The Minister stated very definitely that the farmer would not lose under this Bill. I should like him to explain that statement. In referring to criticisms of the Bill in the Dáil, he said he could prove that the farmer could not lose by this measure. How can that be possible? This is only part of the general scheme to ruin the farmer in order to bolster up a few inadequate industries. The farmer is of no account. The great agricultural industry is being ruined on every hand. Every time we come into this House we find that another blow has been prepared for the agricultural industry. Senator Counihan and Senator Wilson put the matter very clearly and I should like the Minister to explain how the farmer is not going to pay in this case, as in every other case of the kind.

I should like the Minister to answer a couple of questions when replying. There has been some discussion about tanning. This Bill has nothing whatever to do with tanning. All these skins and fells are exported, whether by the native fellmonger or the foreigner. So far as I can see, this Bill gives a monopoly to the local or native fellmonger and provides him with an opportunity to exploit the producer. That is the point I am concerned about. I should like to know the number of fellmongers in the country and the amount of employment given by them. Further, I should like to know whether the standard of employment will be a condition of the licence. If this Bill brings us nearer to development of a tanning industry, I should like the Minister to explain how it does so. I do not see how it will get us any nearer that development. A sheep is killed to-day; to-morrow or six months hence the pelt or skin is not going to be used for tanning. This Bill could be introduced six, eight or ten months, or even two years hence, just as well as to-day. So far as I can see, the Minister is giving a monopoly to certain people who will be able to exploit the producers unless very stringent conditions are imposed by the licence on these alleged native fellmongers. I know some of them and they are anything but native or racy of the soil.

It should be quite clear to Senators that the price which the fellmonger can pay for sheepskins is determined by the price which he can procure for the scoured wool and the pelts. These goods are marketed in Great Britain and on the Continent. There is a fairly substantial market on the Continent to which Irish fellmongers export their products. It is possible for one fellmonger in this country or a group of British fellmongers operating here to pay a price for sheepskins not justified by the market price of wool and pelts in order to put competitors out of business. That is a regular trade device not only in regard to this industry but in regard to other industries.

Who gains?

It may surprise some innocent Senators to learn that business men resort to tricks of that sort, but if they read the trade journals and examine other sources of information, they will find that it does happen. It has happened in this industry. The Senator asks who gains. People do not do that sort of thing for the good of other people's health. If I were a fellmonger and if I were determined to put other fellmongers out of business, I could devote a certain amount of capital to paying increased prices for the products I had to buy until I had achieved my end. What I lost in that way I could get back by depressing prices when competitors were out of the way.

But there will be a competitive market.

Controlled by the British fellmongers who are operating here. These people have, apparently, been operating a policy to that end. British fellmongers cannot, any more than Irish fellmongers, afford to pay an uneconomic price for sheepskins. The price they can afford to pay is regulated by the market price of their products. That is an international price and is not within their control. It is affected by world conditions. They can, however, pay an uneconomic price for a limited time if it suits their trade policy. They cannot do that indefinitely but they can do it for a time for some definite end. In the long run, the economic price will prevail, whether the sheepskins are bought by Irish fellmongers or any other fellmongers.

Would the Minister quote figures proving that statement?

What statement?

That the British are buying these sheepskins at a higher price than they obtain for the finished article in the shape of the wool and the pelt.

That is the statement the Minister made.

The statement I made I repeat and assert though I cannot produce figures to support that statement because I have not got them.

It is an assertion then.

I am directing attention to the fact that the price paid in the Saorstát in 1934 was practically double the price in 1932.

That has nothing to do with it. The prices will regulate themselves.

Quite so: I am not denying that there was some justification for the rise in price. The rise in prices was expected owing to the economic conditions and that shows up the ridiculousness of the statement made by Senator Miss Browne, who said that this was another scheme to put the sheep farmers out of production. As a matter of fact the prices for sheep now are higher than in 1931 when the country was basking in the sunshine of Cumann na nGaedheal Government—I am disputing that ridiculous statement en passant. It is not proposed to give anyone a monopoly under this Bill.

Did the Minister state that the English fellmongers are obtaining more for their pelts?

Not because of any superiority of manufacture or because they have a better process, or because they are producing a better article. In this case, again, business morality comes into the matter. There is a higher price paid for the pelts of sheep produced in certain parts of Great Britain and there is reason to believe that some of the skins exported to Britain from the Saorstát are sold as if produced in Britain. Because of that the British pelt-mongers may be able to pay a higher price for the Saorstát pelts than the ordinary commercial price would justify. However the difference in price is likely to be inconsiderable, if any difference arises at all, because the factors that will control the price of sheepskins in Great Britain will control the prices here although there is reason to assume that higher costs operate here. Labour for one thing is paid higher wages here than in Great Britain so far as the information that I have at my disposal goes. It is a factor affecting the price here and not one that I object to. The only other argument of importance is that of Senator Counihan who contended there was no export market for the type of sheep most suitable for the purpose. There is a market.

There is no surplus of that sort.

Any attempt to depress prices here will be corrected by exports so long as the export market is open. I think Senator O'Connor was right when, in reply to Senator Sir John Keane, he said the price of sheep was controlled by imports from Australia.

I am not in a position to say definitely what increased employment will result from the development of the industry. The total direct employment in addition to those already employed will be between 100 and 200 men. The importance of the employment is that it is generally skilled and well paid employment. It affords employment for adult men, and that employment, in the past, was given in the country towns of the Saorstát where it was of very great advantage. I do not know what amendment Senator Counihan proposes to suggest. I do not know that the Bill is open to amendment because it is a simple Bill and is only intended to give effect to one purpose but we will see what the nature of the amendment is when we come to the Committee Stage. The main purpose of the Bill is to regulate exports. It is not designed to prohibit exports until fellmongers are in a position to deal with a much larger number of skins than at present but they probably could not deal with all. Formerly there were ten such fellmongers. Now there are only three in operation. We hope that some of those who went out of business will come back to it again, in the same towns that they were operating in previously. That would be a gain and although in theory possibly a lower price would prevail the price in fact prevailing will be an economic price.

Question put and agreed to.
Committee Stage ordered for Wednesday, 18th April.