Creamery (Amendment) Bill, 1934—Committee Stage.

Sections 1, 2 and 3 agreed to.
SECTION 4.
(1) Where a person is found guilty of an offence under Section 13 of the Principal Act, the court may, either in addition to or in lieu of imposing a fine, order the seizure and forfeiture of all machinery, plant, utensils and equipment (whether the same are or are not fixtures) suitable for use in a creamery found in the premises in which such offence was committed.
(2) Where a creamery is alleged to be maintained in contravention of Section 13 of the Principal Act and the person by whom such creamery is so maintained is not known or cannot conveniently be ascertained, a prosecution for the offence under the said Section 13 of so maintaining such creamery may be brought against the person so maintaining such creamery by the description of "the person maintaining a creamery at (a named place)" without naming or further identifying such person, and whenever any such prosecution is so brought, the following provisions shall have effect, that is to say:—
(a) the summons or other document originating such prosecution may, notwithstanding anything contained in any rule of court, be served by affixing a copy thereof in a prominent position on the outside of the premises in which such creamery is alleged to be maintained, and such service shall for all purposes be good and sufficient service;
(b) if at the hearing of the matter any person appears (whether in person or by solicitor or counsel) and either is proved to be or admits that he is the person maintaining the alleged creamery, the court may amend the summons or other document aforesaid by inserting therein the name of such person as respondent and make such order on such document as so amended as justice may require;
(c) if at the hearing of the matter the court is satisfied that the offence alleged has been or is being committed but no person appears (whether in person or by solicitor or counsel) who is proved to be or admits that he is the person by whom such offence was or is being committed, the court may order the seizure and forfeiture of all machinery, plant, utensils, and equipment (whether the smae are or are not fixtures) suitable for use in a creamery found in the premises in which such offence was or is being committed.
(3) Every seizure and forfeiture of goods under an order under this section shall be effected by the proper officers of the court and for that purpose such officers may break and enter the premises specified in such order and may use such force as may be necessary therefor.
(4) All goods seized and forfeited under this section shall be delivered to the Minister and may be sold or otherwise disposed of by him in such manner as he shall think proper for the benefit of the Exchequer.

I move amendment No. 1:—

To delete the section.

Unfortunately, I was not in the House on the occasion of the Second Reading of this Bill, but I may say that I put in an amendment, together with the two amendments on the Order Paper, suggesting that this Bill should be referred to a joint committee of both Houses for its further consideration, but in view of the Bill having got a Second Reading, that looked as if I were blocking its progress, and, although I think it was doubtful, the amendment was ruled out of order. I wish to move the deletion of Section 4. That section, though it does not say so, is I think, in effect an extension of the powers given under the Creamery Act, 1928. It is an amendment of Section 13 of the Principal Act which states:

it shall not be lawful for any person to acquire, by purchase or otherwise, a creamery which at the time of such acquisition is being worked and carried on as a creamery or to establish a creamery in any premises in which the business of a creamery is not being carried on at the time of such establishment.

There are a number of other provisions of a kindred restrictive nature of that sort. At no time was it an offence for a farmer to separate his own milk and make butter of it. That was a practice which was carried out pretty largely. Some farmers, prompted, I think by traders in the butter business, started some small class of power separator where the milk of a number of farmers was separated. Though that was not a creamery technically, by definition under the Creamery Act it came to be construed as a creamery. This section which I seek to delete gives most extraordinary powers to the Minister in the case of an offence under this section. Not only may a person be fined, but the court may order the seizure and forfeiture of the machinery, plant and equipment suitable for use in a creamery. My object in asking that this Bill be referred to a joint committee of both Houses was that less rather than more restriction should be required. I very well remember that when the Minister's predecessor was putting through the Creamery Act of 1928, I privately suggested criticism to him in connection with the Bill, and he put it to me, as he put it publicly in this House afterwards, that he should be treated as the managing director of a very big concern, and given a fair chance whether he succeeded or failed. I must confess that in view of the acquisition of a very large number of creameries and the establishment of the Dairy Disposals Board there was a great deal of reason in his contention at the time. I wish to point out to the House and to urge on Senators that these restrictions should be lessened and not increased, because the condition of things then in the dairy industry was very different from to-day. One fact was that the price of butter at the time was practically 80 per cent. more than it is now. These farmers who are utilising this method of separating their milk and making their butter are doing the work themselves, and doing it very economically, perhaps not quite as efficiently, but at a very much cheaper rate than that at which the creameries could do it. I have very little doubt that this section is put into this Bill purely and simply for the reason that these small separators are able to pay for the farmers' supplies considerably more than would otherwise be possible. They pay more for the butter fat than the creameries do. Now these separating and churning stations are to be called illegal creameries. Possibly they may be so by reason of the definition of the Dairy Produce Act. But in effect they are not creameries. They have none of the advantages from the Minister that the creamery has. They do not get the creamery bounty nor the creamery subsidy, nor is their produce to be sold as creamery butter. This is butter made by a number of farmers, and it is not and cannot properly be described as creamery butter. Within living memory, in fact within my own memory, the Cork butter market was the greatest butter market in the world. That was its position at a not very remote period. The merchants not only did a very big export trade with England, but they did a trade down the Mediterranean. Tinned butter for ships' use was shipped by the Cork merchants. That was sent to countries like India, Spain and China. Cork butter, tinned and packed so as to secure it against a very high temperature, went to every part of the world. Cork, because of the creameries, has gone down as a butter centre, but there is still a very considerable butter trade left in Cork, and this butter is being shipped to centres outside.

By reason of Great Britain going off the gold standard other markets have been opened up. These markets hitherto had been held by the Dutch, which had a very big business in that class of trade in past years. Now some of those exporters are associated with the farmers who produce this class of butter made in so-called illegal creameries. I hope the House will not give power to the Minister to make any restriction on that class of trade.

As a mere matter of detail, I may say that I have in my safe in Cork a passport to America which was issued in the year 1913 or 1914. Certain things happened then which entailed that I did not go to America. Now I took out that passport because in the previous year very large quantities of Danish and Siberian butter had been sent to the United States. I had an idea that I might open up this temporary market there for Irish butter. At one time I traded largely in Canadian butter. The last Canadian butter I bought from Canada I sold it back to Canada with some boxes of Irish butter. That was the class of trade that could be done by merchants and traders in butter but which the Irish creameries as constituted in this country will never do. Some correspondence was sent me in connection with this class of trade. I will not mention names but I will read for you the concluding letter of this correspondence. You must bear in mind that the Minister for Agriculture, through the Dairy Disposals Board, is, I think, by far the largest trader in the butter business in this country at the present time. I am not complaining of that. Circumstances have been such that the Dairy Disposals Board have not been able to part with the creameries that were acquired by the Minister's predecessor. I have no complaint to make of the trade or the manner of trading. But it is a fact which this House should take into consideration in considering the Bill. This letter which I am about to read for you was written by a firm in Cork. It was written obviously to the person who tried to help a Cork firm. It is quite recent; it is dated the 8th August, 1934. The letter says:—

"A Chara,—I thank you for yours of the 7th. The Irish Department of Agriculture have refused to do anything other than their previous decision. The position is that these people are direct sellers themselves and do not want anybody to do business direct, as success by a private individual in finding alternative markets would not be to their credit where they themselves have failed."

I am not giving this letter in full. Obviously the person to whom this letter was written failed to remedy the grievances from which the person who wrote it had suffered. The letter goes on:—

"My firm is not further interested, as trying to do business in conjunction with the Irish Department of Agriculture is practically impossible. On account of the drought in the States, Reeves"— Reeves, I may say, is a very big multiple shop trader in New York—"had an ideal opportunity of putting Irish butter on the market with success. His trade is 30 tons a week and he told me during dinner, which I had at his house, that two years ago he was in Dublin and got in touch with the Department whose treatment of him was such that he left in disgust. It seems a pity to me that matters of this kind should be so badly handled. Thanking you for your interest in the matter and also for your courtesy in New York, and hoping at some time to have the pleasure of renewing your acquaintanceship."

That is the letter of a trader who feels aggrieved at the treatment meted out to him. Yet it is sought to give the Minister further powers. If the Minister came out honestly and said that there should be no trading in dairy produce, except through the avenues permitted by the Ministry, I could understand it, but I cannot understand why, at the present time when the market is restricted and when alternative markets are very urgently wanted, any restrictions should be put in the way of those who are permitted to carry on the trade. There was a considerable amount of talk last night when it was even suggested that the Minister might trade in cattle. He is trading largely in dairy produce. As I have said I have no particular objection to his doing so, but I do object that any further restrictions should be put on private trading. I would ask the Seanad to support the amendment.

I should explain that I never made or never sold a pound of butter. It is perfectly true also that I have never been interested in a fair. I could not tell you the difference between a "tangler" and a "blocker" who, we are told, attend fairs. My general feeling would be in favour of the producers of cattle and if there is anything that would make me more interested in them it is the fact that my friend, Senator Counihan, would not listen to me when I suggested that I might be taken into that "ring" of his which apparently can make money very easily. This question of the manufacture of butter is very important for the small farmers in the south of Ireland. I am not an expert in this business and I do not claim to be, but I have followed the history of the butter trade in Cork for a long time. We had, as Senator Dowdall knows, a very fine trade at one time in Cork. It was killed very largely—and I think the Senator will agree with me in this—by our own indiscretions and to a lesser extent, perhaps, by our own dishonesty, but we were dishonest not at all to the extent that people say we were. We were, however, fools enough to proclaim that we made extremely bad butter and that it contained an undue proportion of moisture. In those days there were a number of people very enthusiastic in the cause of creameries and they took advantage of our attacks on the butter we made ourselves, with the result that they destroyed the export of what was then known as farmers' butter, which, according to Senator Dowdall, who is an expert in the business, was bringing in 80 per cent. more than the creamery butter of to-day.

I have been in Holland and I have seen the very wonderful farms which they show to tourists going there but I have also seen in Holland cowsheds and other places and if they existed in any part of the Free State, I think the Minister would very properly come down upon their proprietors as heavily as the law would permit him. We are inclined to show up our own shortcomings. We sometimes go a little too far, perhaps a bit beyond what we deserve. It is a dangerous thing to give a handle to anybody to suggest that the goods we turn out are not the best in the world and I would point out to the Minister that he is running a serious risk in this way. The creameries have been producing an admirable commodity. Whether it will improve the position of creamery butter if it gets around, as it is getting around to-day in this country, that a great deal of the cream that is used in the making of creamery butter is collected in a travelling creamery as set out here in the Bill, remains to be seen. I am dead against travelling creameries. Their object is to gather——

Cathaoirleach

The question of travelling creameries does not arise on this particular section.

Which section is it?

Cathaoirleach

Travelling creameries are dealt with in Section 2, which we have passed. This section deals with an amendment of Section 13 of the Principal Act which imposes certain restrictions.

Are they not dealt with here?

Cathaoirleach

I do not think the travelling creamery is restricted at all.

This only deals with illegal creameries.

The travelling creameries are to knock out the illegal creameries?

What I am interested in is that there are small creameries which turn out what we know as farmers' butter. Farmers' butter is flavoured in the same way as what is known as Danish butter. I believe it will not keep as long as creamery butter but it is, when freshly used, a more palatable butter than our creamery butter. This butter is turned out in the very remote places which are inaccessible to creameries. As Senator Dowdall has told you, the price it has commanded is very much in excess of the price of the butter turned out in creameries. The cost of manufacturing this butter is ½d. per lb. If I am right the cost of manufacturing a pound of butter in a creamery is 2d. Am I right in that?

That, in itself, is a very big consideration. As I say, this trade is a remnant of our former trade in Cork. It was a pity, in my opinion that it was ever put aside. It could have been reformed. Many people hold that it could have been reformed and that it would have been a more valuable asset to the country than the butter trade is to-day. I claim that it is quite wrong to prevent these small farmers from setting up their own little creameries but, of course, I am perfectly satisfied that they should be watched in the most strict way. There is an obsession, it would seem, in the Department, started a long while ago by Sir Horace Plunkett, that all milk produced in this country should be turned into butter in a creamery and not in the farmer's house. I would ask the Minister, in all the circumstances, to make an exception of these small creameries and not force these people out of business. In addition to forcing these men out of their own trade, you are putting out of business a great number of butter merchants in the City of Cork who, as Senator Dowdall will tell you, have, in spite of all that has happened to the butter trade, continued to keep up their connection. I am not quite so sure as to England, but I am quite satisfied that along the littoral of the Mediterranean, Cork butter is still put up and it goes there in very considerable quantities.

If the amendment is carried or even if it is defeated it will not have any bearing upon the arguments of either the mover of it or Senator Crosbie. If there had been an amendment to repeal Section 30 of the Principal Act, then the speeches would have been appropriate; but as it stands, the section which is sought to be amended is a section which attempts to make the Principal Act effective. I cannot understand the case made in support of the amendment, because it would not achieve the ends for which either of the Senators is arguing. The Minister has found that the Principal Act cannot be effectively enforced because of a defect, and the amendment, if it were successful, would enable persons who are disobeying Section 30 of the Principal Act to go on disobeying it. It would have no other effect.

Although I dislike altogether this regulation, I admit that there comes a time when you have to accept it and make it work whether you like it or not. I think that the time has now arisen. In the case of the creameries you have a lot of capital sunk and a great many districts rationalised and I think you must accept the principle inherent in this new form of controlled marketing. Although I dislike the regulation intensely, I realise that it would jeopardise the whole thing if you do not work on those lines. I think this is a case where individual liberty has got to be sacrificed. In view of the principle involved I could not see my way, much as I sympathise with the amendment, to support it.

I think Senator Johnson is quite right when he says that the speeches of Senator Dowdall and Senator Crosbie are really directed to the repeal of Section 30 of the principal Act. This Bill seeks to make the principal Act effective from the point of view of the small group of people who are not carrying out its provisions and whom we cannot get at properly owing to a trick of theirs. The main object of the Act of 1928 was to consolidate the dairying industry. A considerable amount of money was spent at that time buying out proprietors and handing the business over to co-operatives. The Minister was given power to license creameries in future so that we would not have the position of one creamery starting up against another in competition, with big losses being incurred during the fight for supremacy. Eventually, when one creamery would go out the price of milk would go up in order to make up for the loss. Nothing would be gained for the farmers; on the contrary, a good deal would be lost because all the creameries would have to pay for the losses sustained.

The 1928 Act sought to prevent undue competition, price-cutting and so on and fully £500,000 was spent by the State buying out proprietors and handing the creameries over to co-operatives. The Minister for Agriculture has power to issue licences for establishing creameries, but in practice no licence has been issued to a proprietor. Licences have been issued to co-operatives and to the Dairy Disposals Board where they are organising districts with the intention of handing them over to co-operatives as soon as possible. Within the last year there have been what are called joint dairies put up, principally in the County Cork. These are supplied with milk by the farmers. The milk is separated into cream and then butter is made and it is sold as farmers' butter, not creamery butter. These particular institutions have no licences, though they should have.

Is it necessary to have a licence for farmers' butter? Surely it is not?

Those people are joining together to make factory butter, because it must be classed as factory butter.

It is sold as farmers' butter. There is no licence needed in this country to make farmer's butter.

There is where they are joined together, and it becomes a factory. Surely it cannot be said that the farmers are making their own butter when 100 of them come together, do the separating and make the butter? It is really a factory. These people know very well that they should have a licence. There are four of these men— of course they are not farmers at all— who are Cork butter merchants. Senator Dowdall is not one of them. They came to me some months ago asking permission to set up those joint dairies. I said I would permit them in districts where they would not compete with existing creameries. I told them to make application to me, and if they selected a district that would not interfere with existing creameries, a district that would be miles away from a creamery, I would assure them that they would get a licence. They sent up a list of places, and afterwards in one of those places they established a branch which, of course, proves conclusively that these men are at the back of the whole thing. But we have no proof legally that they are, and that is what we want this Bill for.

At the moment we cannot deal with them. We cannot serve a notice on them because they are working in a very clever way. The farmers bring in their milk, do the separating themselves, and they make the butter, and then it is sold to one of those Cork butter merchants. We all know who the owner is, but in law we do not know. We want to make Section 30 of the Principal Act effective so far as these people are concerned. We are asking permission in this section, instead of serving notice on the owner, to serve it by pinning it on the door, just as the Dublin Corporation can do where they cannot find the owner of a condemned house. In such a case they serve the notice by pinning it on the door. If the owner appears in court the summons is amended, but, if he does not appear, then the order is made for the house to be demolished. We are following exactly the same procedure. If the owner appears in court the judge will amend the summons, and the owner can put up his defence. But we have to go through the court to show that these places are established in contravention of the 1928 Act. This Bill will have the effect of making the owner appear.

Would this business be in order if he is registered and if you give him a licence?

As it is he has no licence. I do not say that we would give him a licence where he is competing with an existing creamery. As a matter of fact we would not give him a licence in this case. I met these men and I told them that I would be very glad if they would develop certain areas where there were no creameries. They did not choose to do that. They went to districts where creameries were established. If you have 700 suppliers to a creamery, and if these people come along and secure 100 of these suppliers, obviously that is going to do harm to the existing creamery.

I do not agree with the figures that were given by Senator Crosbie, that there was a difference of between 2d. and 1½d. in the price. These particular men may do it for 10/- per cwt. which is a little over a penny. The average cost of creamery butter is from 18/- to 20/- per cwt. That works out at about 2d. The difference is between 1d. and 2d. Why should not these men be able to give a better price for milk? It is true that they are getting no bounty or subsidy. If we give the bounty and the subsidy to a creamery to export butter, the butter that creamery sells on the home market gets as good a price as on the export market, because the price the home market gives is the export price. It is the same as if we had one creamery exporting all the butter. The creamery that sells all the butter at home gets the same price. It gets the price that the value of butter on the foreign market is raised to by the bounty and the subsidy. By selling at home these people get the advantage of the bounty and the subsidy. They do not need a subsidy or bounty when they sell at home. The creameries pay 3½d. at home by way of levy. The other concerns pay nothing, so that it is easy for them to give the farmers a better price.

In my opinion the effect of carrying this amendment would be to give these merchants a free hand to expand their activities to other creamery areas, and inevitably, in the course of time, the creameries could not continue to pay the levy and we would have to drop the stabilisation plan. In that case creamery butter exported and sold at home and all other butter, would fall in price by the difference which there is between the levy and the bounty by about 24/- or 25/- per cwt. All butter would fall in price if we dropped the stabilisation plan. Undoubtedly the stabilisation plan cannot succeed if this practice goes on, because these men can work their way gradually into creamery districts, having the advantage of 3½d. per lb., which they are not paying. I am aware of the letter that Senator Dowdall quoted. That merchant applied to us for permission to export butter to foreign markets. We said that we would give him butter to develop that market at 5/- per cwt. less than the price of Australian butter delivered in London, in order to compete with Australian or similar butter in markets outside British markets. Obviously when Australian or New Zealand butter can be got at a certain price in England, they will not sell their butter in any other market at a less price. We were going to give this particular merchant an advantage of 5/- per cwt. He was not satisfied with that. Now, we have a letter quoted in the Seanad saying that the Government want to keep all the business for themselves. The Dairy Disposals Board purposely kept out of foreign markets in order to give existing merchants any opportunity there is to develop these markets. We also give them the advantage of 5/- per cwt. Four merchants in Cork availed of the offer and are getting butter 5/- per cwt. less than the quoted price of Australian butter in London. They sell whatever they can in certain foreign markets outside the British markets. The merchant that Senator Dowdall has referred to was not satisfied with these terms.

Senator Crosbie also referred to Danish butter. I would not like the Seanad to get the impression that we in any way prohibited creameries making butter on the Danish plan. Danish creamery butter is made from ripened cream, while our creamery butter is made from unripened cream. We do not prevent creameries making butter from ripened cream. They may make butter on the Danish plan if they like. Senator Crosbie spoke about the difference between farmers who make butter in their own homes and those who have it made in the creameries. That is not the issue. The issue here is that of unlicensed creameries making butter against licensed creameries. Unlicensed creameries are really treated as factories now because they are only selling factory butter. In reply to Senator Sir John Keane's remarks, we are not, by any means, coercing the minority. We are only making the working of Section 30 of the Principal Act effective in the case of a small group of Cork merchants.

The figures given by the Minister cannot be accurate. This association of farmers can produce butter 1d. per lb. cheaper than the creameries and can compete without a bounty or a subsidy with butter from the creameries. I do not stand for everything in the correspondence but I will refer to it again:

"Dripsey Dairy has paid a higher price to their suppliers than local creameries, although subject to levy and only getting bounty on factory butter; and as this butter was sold through our factory levy was paid on it."

The Minister's statement was not accurate. This butter is not sold in Ireland. Some of it may be sold here, but the bulk of it is exported.

It gets the bounty so.

It gets the factory bounty. That is a very different thing from the creamery bounty. Notwithstanding that, it is able to hold its own and to give the farmers a better return for their produce. If the House in its wisdom wishes to put restrictions on farmers getting more for their produce, then I say it is going against the interests of dairy farmers. I am willing to withdraw this amendment subject to this: that the Minister tells the House if he is prepared to have a Joint Committee of both Houses, or of the farmers of either House, to go into the working of the Dairy Produce Act, the Creamery Act, and this Bill. Otherwise I will force it to a division.

The Minister suggested that he mentioned to the deputation from Cork that there were certain districts where these creameries or factories would be desirable.

That is right.

They did not put them in these particular places.

How far are these from the nearest creameries that they would affect?

I cannot answer the Senator definitely on that point. I do not know the districts sufficiently well. They might go within five miles of a creamery. I told them that if they suggested certain places we would examine the question to see where we could allow them. I suggested places where we were about to build creameries, and asked them if they considered doing it instead of the Department, but they did not. Another thing is that they appear to put up these creameries to compete only against the co-operative creameries. There are proprietary creameries in County Cork but none of these were put up to compete with proprietary creameries, only against co-operative creameries. With regard to what Senator Dowdall said, I see no objection to setting up a committee such as the Senator suggests.

A committee, I presume, of farmers?

Those interested in the butter trade.

In those circumstances, I am prepared to withdraw both amendments.

Cathaoirleach

I suppose the Minister will arrange for that.

I am very glad the Minister has agreed to set up a committee to go into this question. It must be remembered that at present at least half the butter made in the Free State is farmers' butter.

Nearly half.

There is a feeling amongst those farmers that the creameries have been assisted at their expense, and that to a great extent they have been neglected both by the present and the previous Government. The Minister has stated that the creameries should not be erected near existing co-operative creameries. That appears to me to be a very sound suggestion. I know one of those creameries, and it is a considerable distance from any existing co-operative creamery. It is fairly near a proprietary creamery. The farmers have the option of going to the proprietary creamery. They have gone to the newly-established creamery and have got a considerable increase in the price paid for milk. I understand this creamery adopts a new system of separation. They do not find it necessary to heat the milk before separating it, and in that way considerable expense is saved. I am very pleased that the matter is to be left to a committee, and I hope that the result will be that some arrangement will be come to whereby those creameries which are established and have no licence at present will receive a licence from the Minister.

I presume the committee will have regard to the whole question, including the travelling creameries dealt with in Section 2?

Yes. Of course, I should like to make it clear that we will not delay for the committee; the committee will be able to review.

Amendment, by leave, withdrawn.
Section put and agreed to.
Amendment No. 2 not moved.
Section 5 and Title put and agreed to.
Bill reported; Report Stage to be taken on Wednesday, 5th September.
The Seanad adjourned at 6.55 p.m. and resumed at 7.55 p.m.