It may be no harm to bring Senators' minds back to how this legislation with regard to pigs and bacon was first brought in. I am sure every Senator read the report of the Pig Industry Tribunal that was issued about 1933. It was a very fine document, and gave a very good review of the whole pig and bacon situation. It made certain recommendations which were afterwards more or less implemented by legislation. That legislation was brought in in 1935 and set up two boards. The big idea in the recommendation was to have a fixed price for pigs, because we had the situation for some years before that where prices fluctuated very rapidly and, in fact, fluctuated geographically. Even on the same day the price of pigs was very different in one district from the price in another. The fixed price was what we wanted to get at, and, in order to fix a price for pigs, many other things were necessary. Under that Bill two boards were set up, and their composition was such that we had representatives of bacon curers on the Bacon Board and representatives of producers and bacon curers on the Pigs Board. At the same time we had been compelled before that to regulate exports, because the British Government had regulated imports in such a way that they were prepared to give a quota to the Government of any country trading in bacon by negotiation or agreement. The export quota was estimated roughly at the amount of bacon we thought we could afford to export as being surplus requirements for home consumption.
We were asked by the British Government to give them that estimate about the end of November each year for the following year. That was a thing apart. The boards had no control over it, but, of course, they knew what the amount of export for the year would be, and they had to take that export into account when dealing with the various matters that came before them.
The first thing the Bacon Board had to deal with was the production quota. They dealt with that monthly, and the production quota was really a calculation by the board of the number of pigs that might be available in the country for the month to come. It was varied from time to time, and it never varied downwards, but sometimes upwards; in other words, the Bacon Board at times under-estimated the number of pigs that might come on the market, and had to bring in a supplementary production quota. The second thing the Bacon Board had to deal with was the matter of home sales. The home sales were fixed by the Bacon Board and, again it was an estimate of the amount of bacon that might be absorbed on the home market at the price which bacon might fetch having regard to the price of pigs. These are the two matters the Bacon Board had to deal with, and, as Senators will see, they were merely estimates, firstly, of the number of pigs available for absorption by the factories and, secondly, of the amount of bacon that might be required on the home market for the following month. The production quota was not, as some people have thought, the sum of the amount of bacon to be exported for the month, plus the amount to be consumed for the month at home, because sometimes there might be a carry-over of bacon from one month to another, and, at other times, there might be no carry-over, but, in fact, some absorption of the stocks carried over from the previous month.
The Bacon Board had to go further. Having fixed their total production quota for the whole country, and their total home sales for the whole country, they had to fix the sub-allocation of production and of home sales. The sub-allocation of production was fixed as the sum of the export quota which the particular factory had got, plus its proportion of home sales. As I have already said, the board had no control over the export quota. They had to take that figure from the Department, and, in fixing their sub-allocation, they fixed the amount of production on the export quota, plus the proportion which the factory was entitled to on the home sales of the same month in the previous year. The home sales then were divided in the same way as between one factory and another. They were divided on the percentage basis that held as between one factory and another, which was the established practice, as the business was done by the factories before this control came in.
There was another consideration. The board fixed a certain price for pigs. They had no control over the export price of bacon. They had fixed home sales with a view to keeping the price of bacon in relation to the price of pigs, and they were in the position, therefore, that if the price of bacon exported were to fall below what would be a fair price, relative to the price of pigs, they had to pay something to the exporter of bacon to enable him to get the same price as if he had sold his bacon at home, and there was a hypothetical fund created for that purpose. They could collect a certain amount from each curer on production, and pay a certain amount out of that fund in respect of the bacon exported to bring it up to the level of the value of bacon sold at home. It might have worked in the reverse way, but it never did. One may have said, four or five years ago, when the Bill was coming in, that it was possible that, at times, the export price of bacon would be even better than would pay the curers, relative to the price of pigs, and, in that case, the levy under the hypothetical arrangement would be taken from those who exported, and something out of the fund given to those who were selling their bacon at home in order to bring the home-sold bacon up to the value of the export bacon. I quite admit that all this is rather involved and more like a lecture on mathematics than on pigs and bacon, but I give this outline in order to refresh the memories of Senators on the old system before going on to what we intend to do in future.
It has been said in another place that this Bill was brought in because I was dissatisfied with the boards which were in existence. That is not true. The boards which were in existence did their work well, as well as any body of men could be expected to do it, within the legislation and within the regulations which followed the legislation, and the fact that I am bringing in this Bill does not in the least mean that I am dissatisfied with the personnel of these boards. I will explain the reason for the change later. I should like to say also that the boards themselves evidently share the opinion that I am dissatisfied with them, and they actually asked me to set up an inquiry so as to establish whether they had acted within the law and whether they had acted wisely, or not. I do not think I should do so, because I am afraid that everybody would take it as prima facie evidence that I was dissatisfied with the work of these men, if I were to set up a public inquiry. People would take it as an indication that I had some doubt as to the bona fides of the men who acted on these boards, and I have no doubt whatever. I am quite satisfied with the way they carried out their business, and it is for other reasons that this change is being made.
About three months ago, when the present war started, the British Government asked us to regulate, even more rigidly than before, the export of bacon from this country. In fact, they said in the beginning that they wanted all the bacon to go through one seller; in other words, they asked if we could possibly set up a government, or trade, organisation through which all the bacon would go, as it was being received on the other side by one buyer, namely, the food controller. I set up an export committee, composed of the chairman of the two boards and two civil servants, one of whom had been dealing with all these questions of pigs and bacon on the administrative side, and the other with matters on the technical side. These three men took over all the questions relating to the export of bacon and pigs, the negotiations as to prices, the negotiations with the British Government as to conditions of export, conditions of payment and many other questions which arose. In fact, they had quite a number of matters to deal with when they were first set up. It entailed their going across to the officials in the Food Ministry on at least three or four occasions to get all these details settled up and it will, I am quite sure, necessitate their going frequently to keep matters right. That export committee is there. I think that for some time to come and, in fact, quite possibly for the duration of this war, the price of pigs here will have to be related to the price that we get for our bacon exported. If that is a fact, and I think that any Senator here who considers the matter very fully will come to the conclusion that that is going to be the fact, there is practically no necessity for the Pigs Board because the big function of the Pigs Board was to fix prices for pigs. They took many things into consideration. These are laid down in the Act. They had to consider the supply of pigs, the supply of bacon on the market, the export quotas we might be able to get from time to time, and also the cost of feeding stuffs.
I think that there is only one consideration now and that is the price that we can get for our bacon when we export it, and the price of pigs will be related to that. I do not see how it can be otherwise. I do not see that we could possibly, during this time of war, pay more for the pigs than they would be worth, having the value of exported bacon in mind. If we paid more for our pigs it would mean that the home consumer here or somebody else would have to subsidise the export of pigs to Great Britain. I do not think that I or anybody else could defend that at the present time. For that reason, amongst others, I think that the price of pigs will have to be related to the price of bacon exported. Therefore, as I say, there appears to be no necessity for a Pigs Board because it is only a matter of calculation and this export committee could do it just as well as any other body of people. That is one point.
I think also that no matter how many pigs we have in this country and no matter how much bacon we manufacture, there is no danger about our finding a market for that bacon. I hope we will be able to consume as much bacon at home as ever we did, but whatever surplus we would have I do not anticipate that we would have any great trouble in getting the British Government to take it during this time of war. Again, for that and other reasons, I do not think that there will be any necessity to have production quotas. We can loosen up on these production quotas and let the factories take pigs as they come to them. If the production quota goes, and certainly the home-sales quota will go—I have no doubt about that—then the Bacon Marketing Board has nothing to do. So again we find that the Bacon Marketing Board has very little function to perform and this export committee can carry on the function of the Bacon Board quite easily.
The question will be asked, I am sure, as it was asked in the Dáil, the question that I certainly asked myself: If all that can be done, is there any necessity at all for a board or anyone to control things during this war? I think we can drop practically all control, but it is well, perhaps, to stick to the fixed price for pigs at any rate. If you examine the position during the Great War of 1914 to 1918, I think you will find that there were fluctuations even at that time as between one fair and another on the same day. That sort of thing would lead to dissatisfaction.