Before dealing with the matter before the House formally, I would like to comment quite briefly on some of the remarks of previous speakers. The Danes are a Nordic race, and Nordic people are notoriously white-haired and in some respects the Danes appear to be the white-headed boys of Europe. I have a great respect and admiration for the Danes, but, at the same time, I am aware of the psychological reaction that the white-headed boy produces among the members of the class when he is held up to all the other boys as an example for admiration and imitation. It produces a kind of irrational feeling of irritation. I know I should not feel like that myself, but nevertheless even when my friend, Senator Baxter, talks about the Danes I am conscious of that feeling of irritation and, as I myself will probably commit a somewhat similar offence, I want to disarm possible criticism and hostility by making that preliminary remark.
Senator Sir John Keane contributed the point of view of the joint stock banks in connection with this matter and I can well understand that he feels somewhat sore about the fact that this particular department of financial accommodation to agriculture has been taken over by a public institution and taken away from the province of the ordinary joint stock banks. While that is a point of view, and one with which I have a certain sympathy, I think at the moment we have to face the fact that things are what they are and that one of the problems confronting us is to try and delimit a proper sphere of activity which will separate in some rational manner the appropriate function of the Agricultural Credit Corporation from the appropriate functions of the joint stock banks. Let it be said that the amount of credit which agriculture could usefully use in the next ten or 20 years is far more than the trifling amount of £7,500,000 that is being made available through the Agricultural Credit Corporation. It is highly desirable, in the first place, that farmers should learn to use their own fluid resources in expanding their own capital equipment and, in the second place, if they have not got capital themselves they should learn to borrow for productive purposes — for most purposes, from the ordinary joint stock banks, but for certain special and appropriate purposes, from this Agricultural Credit Corporation.
Of course, I know that joint stock banks, according to the text-books, are not supposed to make long-term loans, but I think they have learned a lot in the last 20 years and that, in practice, the real attitude of the joint stock banks is that they would like loans to go on for ever, provided they could be certain of their being paid in full at some time or other and of receiving the interest in the meantime. That is a Hibernian way of putting it — almost an Irish bull. At any rate, that is only a matter of academic interest, because in the future, in view of the existence of the Agricultural Credit Corporation, the joint stock banks had better stick to short-term and medium-term lending and leave the long-term lending to the Agricultural Credit Corporation.
Another matter which we have sometimes been inclined to overlook is the fact that this is not — or, at all events, not yet — a totalitarian economy and, therefore, it is not the whole-hogging plan of either the Minister or Senator Baxter or Senator Sir John Keane that is going to determine the future use of capital and credit by Irish agriculture. That will be determined by the action of 300,000 odd owners of farms up and down the country. Unless whatever plans we suggest also become the plans of those 300,000 farmers, they will lead to nothing but frustration and disappointment. In fact, I am not sure that there is a credit problem at all. I think it is rather a problem of education, of bringing before our farmers, as intimately as possible, the desirability of making a productive use of capital, their own or borrowed capital, with a view to improving their own output, their own economic welfare and, incidentally, the general welfare of the nation. Unless we look at it from that point of view, and remember that we must bring these 300,000 people, or as many of them as possible, with us, we are going to achieve nothing by any of our high-sounding schemes.
Now, I take it that the primary object of this Bill is to make a contribution to an increase in agricultural production per acre and per man. So far as it goes, it is, I think, an honest and a competent effort to give effect to one of the minor recommendations of a recent Agricultural Committee on Post-War Policy, of which I had the honour to be one of the persons signing the majority report. Therefore, I appreciate the fact that, in this particular matter, the Government is attempting to give effect to one of the recommendations of that committee, and anything that I have to say in criticism or otherwise will be designed to improve, if possible, on the scheme which is at present before the House.
There can be no doubt whatever about the need for increased agricultural production per man and per acre, and if the House wants an index of the extent of that need, without referring especially to Denmark, I can give Senators on an international basis certain comparisons that will show them where we stand in the scale of these matters. There is a book by one, Doreen Warriner, calledThe Economics of Peasant Farming, which gives useful information about a great many European countries. From data obtained in that book it appears that in Poland and India, for example, one farm family produces food enough to feed one and a half families, the farmer's own family and half another family. In Germany, in the inter-war period, one farm family was able to produce enough food to feed three families, including the farmer's own family. In the U.S.A., one farm family produces enough food to feed five families, including the family of the farmer himself. In Great Britain, one farm family — at all events, under the stress of the recent war effort — was producing food enough to feed eight families, including the family of the farmer himself.
Now, where do we come in in that scale? I am afraid that we come somewhere between Poland and India, on the one hand, and Germany on the other. In other words, according to my calculations, one farm family in Éire is producing only enough food to feed at the moment two and a half and, possibly, only two families altogether, and as some people might put it, half of those non-agricultural families are at home in our own towns and villages, and the other half are in Great Britain. That is much too low, and it is very desirable, from every point of view, that one farm family in Éire should produce food enough to feed at least three if not four families. In the first instance, of course, that would mean a considerable addition to exports. The matter has a broader aspect than that of being merely agricultural. A country can only industrialise itself to the extent that the agriculture of that country can increase output and feed other families not engaged in agriculture. If Senators look at the scale of countries that I have given, they will notice that the greater the number of families which, agriculturally, one farm family is able to support, the greater is the degree of industrialisation of those countries. Britain is the most industrialised of any. In British agriculture one farm family feeds eight families. The U.S.A. comes next. There one farm family feeds five families. If we want to create the necessary economic foundations for industrial development we must brisk up our agriculture and make it possible for each farm family to feed three or four families, either at home or abroad.
Another way of looking at the same phenomenon is this: that for every 125 units of food which we produce we consume 100. In other words, our total agricultural exports are only, roughly, 25 per cent. of our total agricultural output. It follows from that, that if we could bring about a 20 per cent. increase in agricultural production the effect would be — on the assumption that we continued only to consume 100 units — to double the total available for export. If we could bring about a 50 per cent. increase in agricultural production the effect would be nearly to quadruple our exports. Now, these results—even a 50 per cent. increase in output — are well within the physical capacity of our people, given certain necessary facilities. After all, during the recent war British agriculture increased its net output by 70 per cent., in spite of difficulties of man-power shortage and so on, and we, with twice as many persons per 100 acres of land as Britain possesses and with certain additional facilities which we certainly need, ought to be able, in the course of the next five or ten years, to increase our agricultural output by some 50 per cent. If we could do that, our agricultural exports in value, instead of being a beggarly £20,000,000 odd as they were in 1943-44, would approximate to £100,000,000, on the assumption that prices remained more or less at the level at which they were in 1943.
We do not know what prices will be in five or ten years' time, but we do know that if our agricultural exports were four times as much as they are now, Mr. John Strachey, instead of careering about the United States of America, would be much more disposed to come careering over here and to say: "What are you going to do about it and what can we do to help and facilitate you in this very desirable effort on your part?" For undoubtedly this is a matter which concerns the welfare and interest, if not the very life, of Britain as well as ours. At present Britain is passing through a crisis more serious perhaps in many ways than the crisis labelled Dunkirk six or seven years ago. Her dollar problem will be and is a very serious one. Her dollar problem is also our dollar problem, and unless the two countries can get together and increase their mutual helpfulness in the matter of agricultural exports, as well as in other ways, we are both going to go through a very difficult time and perhaps even experience complete economic disaster. What we need here is more production, agricultural and industrial, more exports and, of course, more imports, and if this Bill is a step in that direction, I hope it will prove to be a very successful step.
Perhaps I might refer briefly to the Parliamentary Secretary's comparison between the figures for output per head of occupied population in Denmark and in Éire on the average of the ten years between 1925 and 1934. I noticed that peculiar phenomenon, too, that Denmark appeared to have a lower income per head of the population than we had, and I must say I congratulate the Parliamentary Secretary on having made that intriguing discovery. If it was not the Parliamentary Secretary himself but one of his expert advisers who made the discovery, may I ask him to redirect my congratulations to the correct quarter? However, I think, as Senator Baxter made quite clear, it really is only a statistical misinterpretation. It is income per head of occupied population, whatever that may mean in Denmark, compared with what income per head of occupied population may mean here, and I rather think that there are a great many people occupied in agriculture—farmers' wives and farmers' daughters — who are not statiscally occupied from the point of view of the pundits of the Statistics Branch. If one went to a farmhouse door and informed the housewife that she had no occupation, at least from the point of view of the pundits of the Statistics Branch, she would probably say exactly what she thought about these pundits and point out that she was a very busy person.
If we counted all the people occupied in producing our agricultural output, whether they are statistically occupied or not, it is quite likely that that figure would have shown that income per head of occupied population in Éire in these years was less than it was in Denmark. However, the Banking Commission Report, concerning itself only with income per head of total population, says in paragraph 488 that, in 1935, income per head of total population in Denmark was £58 and income per head of total population in Éire £50. I deprecate these comparisons with specific countries, because, unless we know all the circumstances, we cannot be quite certain that there is an exact analogy or a justifiable comparison.
I think the real comparison we should make is between the efforts and achievements of the average farmers and the efforts and achievements of the very best farmers in our own country, and afortiori, between the efforts and achievements of the worst farmers and the efforts and achievements of the very best farmers in our own country. If we make that comparison, and if we find that there are wide variations of output per person and per acre, as between the different sets of farmers, the real problem is to bring up the efficiency of the worst farmers to the level of the best farmers. If we could do that, we would have achieved a well-worthwhile result.
Some years ago I had occasion to read a paper to the Statistical Society on the capitalisation of Irish agriculture, in which I made use of certain investigation made by Mr. Murphy, of Cork, into matters concerning farming in County Cork and County Limerick, and in which I instituted certain comparisons with other farms which came under my own immediate observation in other parts of the country. It appears from Mr. Murphy's tables that the bigger the farm the greater is the amount of instrumental capital — meaning by that, horses, machines, tractors and so on—per labour unit and the greater also is the total value of instrumental capital and farm buildings per labour unit. It also appears from his calculations that the larger the farm the greater is the amount available per labour unit, or, what comes to practically the same thing, the net output per head of persons occupied in each case.
There are several factors determining the total output per person occupied —the skill and management of the farmer, the fertility of the soil, the amount of land available and so on all enter into the case — but nevertheless I submit that one of the factors, and the one which we are now trying to operate on, is the extent to which labour is provided with up-to-date capital equipment and modern, properly-organised farm buildings, and therefore the extent to which we can bring about an improvement in this respect is likely to lead to a very desirable increase in output per person occupied. On the largest farms observed by Mr. Murphy, the value of instrumental capital per labour unit was £61 5s. 10d. I think I graded up his figures to bring them to the level of 1939 prices and therefore make them more comparable with the figures I was studying.
There is a fairly close comparison between his figures and the figures in respect of the four largest farms which came under my own immediate observation, which varied between £40 and £67 per labour unit, but on the farms of smaller size, especially, for example, the farms of 40 to 60 acres, instrumental capital per labour unit was £41 12s. 0d. in his case and on those under 20 acres £28 17s. 7d., so that there was a variation, and the greater the size of the farm, the greater the amount of the instrumental capital per labour unit and the greater was the output per labour unit. My suggestion is that that increase in output per labour unit was in some way associated with the fact that the amount of equipment per labour unit was greater on the large than on small farms.
But I think the difference is perhaps even more marked in connection with the total value of instrumental capital, plus farm buildings, per labour unit. In the case of the farms observed by Mr. Murphy, the highest figure for instrumental capital, plus the value of farm buildings, per labour unit was £171 19s. 5d. and the highest output per labour unit was £107 in the year. In the case of a farm I personally knew about on which there was specialised growing of tomatoes, a 600 acre farm, the value of the instrumental capital and farm buildings per labour unit was £313 14s. or twice as much as observed by Mr. Murphy. In the case of another 200-acre farm on which poultry production was specialised the value of the instrumental capital and buildings, and including poultry houses, was £507 per labour unit. The output per labour unit on the tomato farm in 1939 was £215, which was twice as much as the highest value shown by Mr. Murphy and it was £146 on the poultry farm.
These are the facts and if any Senators are interested they can refer to the original paper. They do suggest that there is a relation between the capital equipment and the output per labour unit so that if we can induce some or all of our 300,000 farmers to improve their equipment we will do something to bring about that desirable increase in output per person occupied. May 1 say that while output per acre is important also, we should bear in mind that if we succeed in retaining the existing number of persons on the land and if we can help to bring about an increase in output per person occupied on the land it will mean automatically and inevitably an increase in output per acre. Output per acre is important but the important thing to work on is output per person occupied and if we can maintain the numbers on the land this will automatically increase output per acre.
The amount of capital invested in Irish agriculture is very considerable and most of the capital is owned by the farmers. It is rather misleading to say that the Danes have invested £170,000,000 in their agriculture and we have only borrowed for investment from the banks £12,000,000 or £15,000,000 or whatever the figure is. A much higher proportion of the capital invested in Irish agriculture than that invested in Danish agriculture is owned by the farmers concerned. It should also be noted as a fact that the total amount of capital involved in our agriculture amounts to a very considerable figure and that practically the whole of it is owned by the farmers themselves. Therefore we start from a position which, financially, is not top-heavy and our farmers can add to their agricultural indebtedness without having an unduly large proportion of debt to total capital assets. I had the curiosity to attempt to estimate the total capital assets of Irish agriculture when I wrote this paper in 1942 and I estimated that the aggregate amount was £466,000,000 at the price level current in 1939. Land, including fences and drains, at an average of £15 per acre represented £180,000,000; farm buildings at £200 per holding, £75,000,000; dwelling accommodation at £300 per holding, £313,000,000. Instrumental capital, horses, machines and implements at £2 per acre represented £24,000,000. Specialised equipment for poultry-rearing, tomato-growing, etc., I just could not estimate. In this connection it is very desirable that as soon as possible a proper survey should be made of every single farm in the country so that we would know to what extent we have specialised equipment and to what extent certain farmers should be encouraged to spread out in certain specialised ways and what facilities they should get.
Capital in the form of live stock, which covered all animals except horses, mules, jennets and asses, I estimated at about £54,000,000. The total estimate at the prices current in 1939 was £466,000,000. God alone knows what this valuation would be if made on present prices. Certainly it would be a good deal more than £466,000,000. The point I want to make is that the amount of capital already involved in our agriculture is very considerable, and the next point I want to make is that the amount of capital per person occupied in agricultural production is remarkably high. Here again may I refer to the Miniter's bed-time companions, the works of Colin Clark? On page 77 ofNational Income and Outlay he says that the amount of capital involved per person occupied in agriculture in Britain, based on prices between 1928 to 1930, is £1,370, and in ordinary industry, £433, and in railways, £1,700. In other words, agriculture involved an amount of capital per worker of the same order of magnitude as highly-capitalised undertakings such as railways. Therefore, it is desirable that we should realise that if we are going to improve our agricultural efficiency we may have to encourage the expenditure of a good deal of additional capital. It is satisfactory to know that most of this capital value, if not practically the whole of it, is in the firm possession and ownership of the 300,000 farmers. At the present time, we know and the more intelligent farmers know that there is need for expenditure of a considerable amount of additional capital. I do not want to throw astronomical figures about, but it is a well-known fact that our agriculture has been starved of phosphates and other artificial manures for the past two decades. I have attempted to estimate the phosphate deficiency, and I find that it is at least 2,000,000 tons, so that at the present price of nearly £10 a ton the cost would be £20,000,000 to bring the land back to the same degree of phosphate content that it had 17 years ago. Everyone concerned should be encouraged by hook or crook to obtain the necessary financial means of acquiring the necessary amount.