I move:—
That Seanad Éireann hereby approves of the Control of Imports (Quota No. 49) (Single Cotton Yarns) 1952.
Control of Imports (Quota No. 49) (Single Cotton Yarns) Order, 1952—Approval Motion.
I spoke in public some time ago about the position of our cotton industry. It has developed tenfold during the past 20 years but there is still very considerable scope for further development. It is only since 1946 that production of cotton yarn has been undertaken although there are now four firms in the business. It is desired to encourage in every way the production of cotton products from raw cotton rather than from imported cotton yarn and for that reason this quota Order was made. The market for cotton yarn will, of course, increase as the cotton-weaving industry expands up to the point to which we think it is practical to go and consequently there will be, we hope, further extension of the cotton spinning end of the business also.
The quality of yarn produced here according to everybody in the trade is very satisfactory and the prices at which it is being sold are in line with British prices. The only disadvantage to our yarn spinners as compared with British yarn spinners is that the arrangements now in operation in Great Britain, since the raw cotton market was more or less nationalised by the British Government, permit of yarn spinners drawing their supplies of cotton on a day to day basis while our yarn spinners have to buy three months or six months ahead and carry a stock of that dimension. Our spinners have an advantage when the price is going up because they will always have bought ahead and have cotton stocks at less than the current prices whereas the yarn spinners in Britain buying on a day to day basis are at a disadvantage.
Similarly, it is clear that our spinners are at a disadvantage when prices are going down. They will have the higher priced stock bought ahead whereas the British spinners are getting current prices on day-to-day deliveries. It is because of the uncertainty which that position creates for our spinners that it was thought necessary to control the import of cotton yarns by quota order. A customs duty would not be nearly as effective nor as desirable an arrangement. It was thought possible, by this quantitative control, to maintain the position by which, over any reasonable period, our cotton yarns would be produced here at prices similar to those prevailing in Great Britain.
There is, in fact, some reason for saying that our yarn spinners would, on occasion, have a slight advantage over British spinners and would be able to produce cheaper. Certainly, the new mills which have been established—the plant at Athlone which was the first, the new plant at Ardee, the Boyne plant and the very efficient mill which I had the honour of opening officially a fortnight ago—are as efficiently equipped with the most modern machinery as any plant in the world and, assuming that they can buy raw cotton on a competitive basis, can produce yarn here as cheaply as elsewhere.
The same position arises here as in the case of the woollen and worsted yarn. Again, the secondary users here have been affected to a great extent by the creation of these new factories to which I wish every success and towards which there is no hostility whatsoever on the part of the secondary users.
Cotton yarn is about the most delicate yarn that one could touch from the financial point of view. It varies from day to day in keen markets by eighths of a penny a lb. and needs to be very carefully watched from the point of view of prices. I think it can be said that it is used in nearly every article of clothing which we wear nowadays. The four mills mentioned by the Minister are very new, and, I am told, are excellently equipped and built. I am also told that they will in time be able to compete more than successfully with outside competition.
Meanwhile, I again make a plea for the secondary producer. I have in mind the manufacturers of interlock and other cotton piece-goods in the underwear industry. We have in this country factories which are certainly as efficient as any in Europe producing interlock underwear. These factories would seriously be affected by any drastic curtailment of supplies of the counts of cotton which they require. I am not quite sure that any of the mills here are fully equipped to deal with certain counts that are required. The new mill in County Cork which was formally opened by the Minister a fortnight ago will in time possibly be able to cater for such yarns but my plea is on behalf of the secondary producers who, in the meantime, may be restricted. I hope the Minister will ensure that they will not be held up until substitute supplies are made available from Irish sources.
I desire to emphasise that there is no ill-will whatsoever on the part of the secondary producer towards the primary producer. The secondary producer is the ultimate consumer of the Irish spun yarn and is anxious to cooperate with his home supplier but I would stress that the secondary producer is going through great difficulty at present because of the new quota. I am aware that the Minister was good enough to increase the original quota by 50 per cent. in order to give them a chance to carry on their business. In nearly all cases, secondary producers give a much higher quota of employment than primary producers. It is obvious, therefore, that if secondary producers are hit, the labour which they employ will be adversely affected. It might have the effect that 1,000 female workers would lose their employment just for the purpose of creating employment for 50 men. I am not saying that that will happen but it could happen. I trust, indeed, that the Minister will ensure that secondary industries will not suffer ill-effects as a result of this quota.
I understand that the 1938 and 1948 Trade Agreements with Great Britain are being reviewed. I hope that the matter of dual pricing in so far as it effects raw cotton will be kept under observation. The Minister talked about the rayon quota. I think that rayon is beginning to be worn much more so than cotton and that it is gaining in popularity. Irish manufacturers are suffering a great disadvantage because they have to pay a higher rate per pound for rayon yarn which they import than their competitors across the water pay to their home suppliers. I understand that that matter was not covered by the 1938 and 1948 Trade Agreement.
I think it is true to say that the development of rayon weaving and of the hosiery trade has almost reached a point where the manufacture of rayon yarn in this country seems to be practicable.
I am very glad to hear the Minister say so.
I am very glad to hear it.
We have been exploring various possibilities in that regard. As the House is aware, this is rather a difficult time in which to arouse interest in the prospect because most of the firms abroad have taken a fairly bad beating during the slump. I hope that some progress will be made in that direction in the near future. I am very conscious of the fact that in calculating the size of the market for single cotton yarn we are, to a large extent, guessing. Because of that, we fixed a very short first quota period. We have worked on three-monthly periods since this Order was made. We did that in order to achieve maximum flexibility so that if we found that the quotas were inadequate they could be adjusted. Fairly liberal quotas were made on the basis of 750,000 lbs. per three months. We think that the quotas represent about half our present user of single cotton yarn.
It is true that the position is different in regard to different types of yarn. Most of the existing mills are doing the coarser yarns—the lower counts. They are only now venturing into the manufacture of finer yarns. Consequently, these quotas are intended to be available to the hosiery manufacturers who are the principal users of the finer yarns.
I do not want to be taken as complaining about civil servants, but may I ask the Minister to ensure that where applications have been made for licences they will receive prompt attention? I have heard that it takes a very long time to get the licences and that, in the meantime, the industries are held up for supplies.
I shall look into the matter. I have not heard about it.
Question put and agreed to.
The Seanad adjourned at 5.50 p.m.sine die.