I move:—
That, in view of the tendency of limitation of export of milch cows by reference to available shipping space to depress prices in the home market and widen the margin of dealers' profits, the Seanad is of opinion that such limitation as may be necessary, owing to transport conditions or desirable in the public interest, should be effected by an appropriate levy on the export of milch cows, springers, and in-calf heifers.
I am moving this motion entirely on my own personal responsibility. It is true that I am a member of a body which is inquiring into various matters affecting our agricultural position and that, in due course, that body may have views to express on the general question of maintaining and improving the quality and numbers of the best kind of cows in the country. At the moment, however, that body is not in a position to make any settled recommendations on that point. Meanwhile, there is a problem forced upon us which the Government and the House should take into account, that is, the present tendency for the rate at which our best cows are exported from the country to be somewhat accelerated.
In proposing a tax on cows exported, I am quite aware that such a proposal is likely to be somewhat unpopular, and that any Government, especially a Party Government, which adopted a tax on the export of cows, would be laying itself open to unfair and, perhaps, damaging criticism on the part of the Opposition, if the Opposition were prepared to act on the principle that any stick is good enough to beat a dog with. I am assuming that the Government, though a Party Government, will act in the spirit of a National Government and that the Opposition will put national considerations above Party considerations—and if that assumption is not justified by the facts, it ought to be.
The loss of our best cows has been a chronic condition—going on for generations. On that point, I will quote some figures which are not without interest. The number of cows supplying milk to creameries in 1938 was 573,000, while in 1941 it was 530,000—a diminution of some 43,000 cows. The amount of milk supplied to creameries per cow in 1938 was 370 gallons, while in 1941 it was 349 gallons. Therefore, not only was there a diminution of some 40,000 cows, but there was a diminution of 20 gallons per cow, between 1938 and 1941. Of course, it is possible that these cows, although they ceased to supply milk to the creameries, did not leave the country. On the other hand, it is probable that a number not so very different from that did leave the country. In normal times, up to 1939 and 1940, the export of cows was about 50,000 or 60,000 per year. I apprehend that recently, and especially in the last six months, that rate of export of our best cows has increased greatly. I fear that the rate of export is now in the region of 100,000 cows per year.
The background of this whole affair is the fact that milk is in great demand in Great Britain and Northern Ireland. There is a scarcity of protein for human ration there, and they have elected to discourage beef exports from Éire to Great Britain as a source of protein; otherwise, they would not pay 9/- less for beef cattle than for forward stores. Against that, they have shown recently a tendency to derive protein in large amount by consuming a greater quantity of fresh milk. Quite recently, they arranged things in such a way that practically every drop of milk which farmers in Northern Ireland and Great Britain can spare, beyond household requirements, is sold at a fixed price. The price for liquid milk in the present month, December, 1942, is fixed at 2/6 per gallon; and the price for milk of manufacturing quality, that is, milk corresponding to the quality of creamery milk, is 1/11 per gallon.
That means that the farmer in Northern Ireland or Britain who has milk to spare can be practically certain of getting 1/1 per gallon for it and may, in some cases, get 2/6 a gallon or even more, if it grades as Grade A milk. That has inevitably and automatically caused a serious appreciation in the value of all cows in Britain and Northern Ireland. Cows in that area have gone up in value by more than the seasonal amount for the autumn of the year. I do not know by what margin they have increased in value, but I should not be surprised that cows were worth £20 a head more in September and October, the autumn of the year, than they were at the corresponding time a year ago.
In that situation, there is a tremendous suction set up, tending to suck our surplus cows out of our country because of the profit in the higher price. After all, what self-respecting cow would go on producing milk in County Limerick for 9d. a gallon when she could be producing milk across the Border at 2/6 a gallon or, at all events, 1/11? The only limit to the export of cows appears to be the transport facilities available for them, and I gather that cows come last in priority in transport, that all other kinds of cattle get out first, that cows are allowed out only to the extent of the transport facilities available, and that a licensing system exists by which the Minister issues licences only to the number of cows for which transport can be got. Suppose transport conditions were free and normal, and there were no restrictions on the carrying of cows. We may assume for the sake of argument that all cows in this area are of the same value and that all cows in Britain and Northern Ireland are of the same, other value. In other words, cows in this area are worth £40 apiece and all cows in Northern Ireland £50 apiece. Given free transport facilities in that case, the dealer would buy cows in Éire at £40 apiece and sell them in Northern Ireland or Britain at £50 apiece, leaving him with a gross margin of £10 normally to cover transport and his expenses. That would give rise to the problem and to the proposition contemplated by by motion.
If I am right in thinking that there is limitation on transport facilities for the export of cows, then there is a potential supply of cows available on this side of the Border for export greater than transport facilities can take. That situation gives you a market in favour of the dealer. He can pick and choose his cows and, whereas, in normal circumstances, he should pay £40 for what I might call a typical cow, he can get all the cows if he has a licence, for as low as £30 each. If that be the essence of the situation, it makes a present to the dealer of a surplus profit and my case is that if that surplus profit arises, it is in fact in the nature of an unearned increment and it should be intercepted by the State in the form of an export tax on cows or in some other way which I will shortly suggest.
To find out whether the facts are as I think they are, I know it would be necessary to ascertain over a period of normal years what was the normal gross profit obtained by dealers in buying cows in Éire and selling in Britain and then to ascertain, in reference to the present era of limited transport facilities, whether and to what extent that normal gross profit has been in fact widened by reason of the glut of supply here owing to the lack of transport facilities and to ascertain to what extent dealers were making abnormal extra profits. An export tax could then be imposed equal to that differential profit to capture for the community something which would otherwise go into the pockets of the cow dealers.
If the State did that, in theory the dealers would still pay the same price. They would be paying the owners of the cows for those they bought and the only difference would be that the surplus profit instead of going into the dealers' pockets would come into the pocket of the State by way of taxation. If I am right in thinking that we are exporting 100,000 cows in the year, the increase in the margin of dealer's profit may be of the order of £5 or £10 per cow. Obviously, over a period of 12 months, there is a nice little nest-egg to be collected of £500,000 or so which would help to relieve taxation in other directions and would not diminish by one iota the prices which farmers would obtain for the cows they did sell. That would deal only with one aspect of the problem.
It would not affect in any way the quality of the cows we export. It would still leave unsolved the problem of trying to increase the number of the best cows and heifers we keep in the country, but on the assumption that we must continue that undesirable economic drain of our best cows for export to England, it would at all events ensure that the Exchequer benefited rather than the dealer from the present abnormal situation and the undesirable drain.
There is another way in which the Minister could capture for the State the profit which might otherwise go undeservedly into private pockets. If I am right in thinking that there is not as much transport facility for cows as would be desirable from the point of view of the number of cows that people would like to sell, then the licences which the Minister issues, being based on the limited transport facilities available, have a real commercial value and would tend to be sold for the commercial value in the same way as licences for fat cows and other cattle were sold during the economic war period. If there is the slightest sign of any sale of licences to export cows taking place, I suggest that the obvious thing for the Minister to do is not to give these licences gratis to anyone, but to fix a price at which those licences would be sold by tender and to vary that price from week to week in accordance with demand. In that way, in accordance with variations in transport facilities, he will be able to get a price for those licences which exactly corresponds to their commercial value and will prevent the dealers profiting by the present abnormal transport situation. I have, at all events, opened the matter for discussion and, perhaps, if the debate is adjourned until next year we may be able to develop the discussion in various other directions.
