It has for some time past been accepted as desirable that steps should be taken as expeditiously as possible to dispense with the use of Emergency legislation and in so doing to arrange for the incorporation in permanent legislation of such Emergency Powers as are still required to be utilised or which it is considered prudent to retain in case they may be needed in the future. It is in pursuance of this policy that this Bill has been introduced. It will incorporate in the framework of the Dairy Produce (Price Stabilisation) Acts, 1935 to 1941, the provisions of seven Emergency Powers Orders relating to dairy produce or the power to make similar Orders under this Bill. It contains no new matters of principle.
Of the seven Emergency Powers Orders to which I refer, five are still in operation and relate to the borrowing powers of the Butter Marketing Committee, the payment out of the Dairy Produce (Price Stabilisation) Fund of allowances on creamery butter and other dairy products, the distribution of creamery butter in the Dublin area or any other specified area and the fixing by two Orders the maximum wholesale prices for creamery butter. The remaining two Emergency Powers Orders which were discontinued a few years ago relate to the restriction on the use of creamery butter other than for household purposes and the fixing of maximum wholesale prices for imported butter.
The Order relating to the borrowing powers of the Butter Marketing Committee is the Emergency Powers (No. 283) Order, 1943. The corresponding provisions are contained in Section 9 of this Bill.
The Butter Marketing Committee is a central marketing organisation operating under rules approved by the Minister for Agriculture under the Dairy Produce (Price Stabilisation) (Amendment) Act, 1941. It has for its functions the cold storage of creamery butter for winter use, the supplying of the creamery butter requirements of the Dublin and Bray areas throughout the whole year, and the import and export of creamery butter whenever casual shortages or surpluses arise.
In connection with the function of arranging for the storage of creamery butter for winter use, the committee borrows from its bankers during the summer months the capital required to purchase the butter and repays the money during the winter months according as it sells the butter. The Act of 1941 empowers the Minister for Agriculture, with the consent of the Minister for Finance, to guarantee the repayment of these borrowings up to the limit of £500,000. By the year 1943, the position was that, due to the large quantities of butter stored by the committee and the increasing value of the butter, the sum of £500,000 was not sufficient to enable the committee to finance its purchases of butter for cold storage. It was therefore found necessary to have recourse to Emergency Powers Order to amend the Act by increasing to £2,000,000 the amount of the borrowings the repayment of which could be guaranteed. In recent years, the position is that due to further increases in the value of butter, the Committee has found it necessary to obtain temporary bank accommodation in excess of the guaranteed figure of £2,000,000 the extra borrowings being secured by private arrangement between the committee and its bankers. A higher rate of interest than that applicable to the guaranteed portion of the borrowing is charged on the excess. As the committee's annual trading losses, which arise out of its cold storage transactions, are made good to the committee each year out of State funds, it is most desirable that the full amount of the committee's bank overdraft should be secured at the most favourable rate of interest obtainable. It is, therefore, proposed in this Bill to increase from £2,000,000 to £4,000,000 the amount of its borrowings the repayment of which can be guaranteed by the State.
The power to pay out of the Dairy Produce (Price Stabilisation) Fund certain allowances on butter and other dairy products is contained in the Emergency Powers (No. 270) Order, 1943, and that power is now embodied in Section 8 of the Bill in the exact form in which it was contained in the Emergency Powers Order. Under the Dairy Produce (Price Stabilisation) Acts in their original form the Minister for Agriculture was authorised to pay out of the Fund contributions towards any approved scheme for the regulation of the sale of butter or any milk product. In the year 1943, the amount standing to the credit of the Fund was sufficient to enable the Fund to contribute towards the payment of creamery butter subsidies in the form of allowances on production and on cold storage of the butter which up to that time had been paid in full out of the Exchequer. To enable such payments to be made out of the Fund the Acts were suitably amended by the Emergency Powers Order. Allowances are still being paid on production and cold storage of creamery butter and, in addition, allowances are now being paid on sales of such butter. As long as subsidisation of creamery butter is continued, whether on its cold storage, its production or its sale, it is desirable that the power should be retained to enable any moneys available in the Fund from time to time to be utilised for that purpose in reduction of the amount which otherwise would have to be provided by the Exchequer. For this reason the Bill proposes to make permanent the relative amendment of the Acts which has been operated by the Emergency Powers Order since 1943.
Regulation of the sale of creamery butter in the Dublin area is operated by means of the Emergency Powers Order entitled the Butter (Control in Scheduled Area) Order, 1952. The provisions of this Order are incorporated in Section 4 of the Bill. During the period of ten years in which the domestic consumption of creamery butter was rationed the supply of butter to the Dublin and Bray areas was, by Emergency Powers Order, canalised through the Butter Marketing Committee. The reason for this arrangement was that the ordinary rationing regulations which operated smoothly in other parts of the country were not by themselves adequate to deal with the distribution problem in the Dublin and Bray areas where the large concentration of population involved heavy supplies of butter. When butter rationing was abolished in July, 1952, the then existing functions of the Butter Marketing Committee, including that relating to the supply of creamery butter in the Dublin and Bray areas, were continued. This arrangement is still working satisfactorily and the Bill proposes to continue it.
The fixing of maximum wholesale prices for creamery butter has been operated by way of Emergency Powers Orders since the year 1940, new Orders being made from time to time according as the prices were altered. The Emergency Powers Orders at present in operation are the Creamery Butter and Butter Boxes Order, 1954, and the Roll Butter Order, 1954. The power to make similar Orders under the Dairy Produce (Price Stabilisation) Acts is contained in Section 7 of this Bill. The power which the Act of 1935 gives to the Minister for Agriculture to prescribe by Order maximum prices at which any specified class of butter may be sold wholesale, restricts such Orders to the prices charged by the manufacturer of the butter. In the case of creamery butter, therefore, the Act enabled maximum prices to be prescribed only in relation to the sale by a creamery of butter of its own manufacturer. It did not cover the price at which creameries could sell butter purchased from other creameries or from the Butter Marketing Committee, or the price of creamery butter sold by wholesalers to retailers.
When it first became necessary in 1940 to control the maximum retail price of creamery butter, it was also necessary to control the profit margins of wholesalers and retailers. To do this, recourse had to be had to Emergency Powers to prescribe by Order maximum prices for all creamery butter sold by wholesale, whether the sale was effected by creameries to wholesalers, by creameries to retailers or by wholesalers to retailers. As the maximum retail price of creamery butter is still controlled, the intermediate prices of the butter between the creamery and the retailer must continue to be fixed. The power to make such detailed prices Orders under the Act is, therefore, being included in the Bill in substitution for the similar powers at present operated by Emergency Powers Orders.
The Emergency Powers Orders relating to the maximum wholesale prices of creamery butter also contained a provision for the compulsory return of empty butter boxes to creameries, and Section 6 of the Bill gives the Minister for Agriculture the power to make similar provisions by Order under the Dairy Produce (Price Stabilisation) Acts. The enforced return of empty 56 lb. butter boxes to creameries is inextricably bound up with the butter price structure, wholesalers' and retailers' margins and the permitted re-use under Regulations made under the Dairy Produce Act, 1924, of timber butter boxes for the packing of butter at creameries.
As regards the butter price structure, what happened was that when provision was first made in 1942 for the re-use by creameries of returned empty butter boxes in which butter had been delivered on sale, the net wholesale butter prices were reduced by 2/- per cwt. and at the same time provision was made in the gross price for rebates of 9/- and 10/- per cwt. on return to the creamery of the two empty 56 lb. boxes. By this means, butter whole-wholesaler's margins were increased by 1/- per cwt. to compensate them for having to collect the empty boxes from retailers and the retailers' margins were increased by 1/- per cwt. because they were no longer permitted to retain the empty boxes. This whole arrangement was originally designed to cater for the war-time situation in which timber for butter boxes was in short supply, and enabled boxes to be used perhaps two or three times before they deteriorated so much in quality as to render them no longer suitable for use. Nowadays, while suitable timber is plentiful, to revert to the single use of a timber butter box would increase the cost of packaging butter at creameries. In order to pave the way for terminating eventually the need for using butter boxes more than once, I introduced last year as an alternative to timber boxes the cheaper fibreboard package, which is permitted to be used only once, and I am hopeful that before very long the fibreboard box will completely replace the older type of timber box. Accordingly, as soon as it is feasible to stop the use by creameries of secondhand boxes (by revoking the relevant regulation under the Dairy Produce Act), the powers contained in Section 6 of the Bill, which are at present still necessary, to make regulations in regard to the return of empty boxes to creameries will no longer be utilised.
As regards the two Emergency Powers Orders which are no longer in operation but which are being covered in the Bill, the first is the Imported Butter (Maximum Wholesale Prices) Order, 1954. The providing of maximum wholesale prices of imported butter had to be effected by way of Emergency Powers Order because the scope of the Dairy Produce (Price Stabilisation) Acts was not sufficiently wide to enable maximum wholesale prices for such butter to be prescribed by Order under those Acts. While I sincerely trust that it may not be necessary in the future to import supplementary supplies of butter, nevertheless it is only prudent that the power to prescribe prices for imported butter should be retained in permanent legislation in case the need for the fixing of such prices should ever again arise. Section 7 of the Bill contains the necessary power.
The remaining Emergency Powers Order which is not now in operation but which is being included in the Bill is the Emergency Powers (Restriction on Use of Creamery Butter) Order, 1942. This Order was in operation from June, 1942 to November, 1954. It prohibited the buying, selling or use of creamery butter for any purpose other than ordinary household use except under a permit granted by the Minister for Agriculture. It was originally made for the purpose of conserving stocks of creamery butter when butter rationing was introduced, but in later years was availed of for the purpose of recovering from users of creamery butter for manufacturing purposes the amount of State subsidy involved in the butter so used.
The method under which this was operated was that on payment of a prescribed fee by the applicants, permits were granted under the Order for the use of specified quantities of creamery butter for the manufacture of fruit cake, confectionery, shortbread, etc. The fee, which was fixed at a rate per cwt. of butter covered by the permit, was determined by the Minister for Finance under the Supplies and Services (Temporary Provision) Act, 1946, and represented the cost to the State of cold storage of the butter together with the amount of the subsidy payable on the production and sale of the butter by creameries. As it may in the future be found necessary to re-introduce the system of issue of permits authorising the use of creamery butter for manufacturing purposes and to arrange for the collection of permit fees, it is proposed in Section 5 of the Bill to make permanent provision for the making of the necessary restriction Order whenever the need for such an Order would arise.
There is one other minor provision of the Bill to which I refer. The opportunity presented by this measure is being taken to make a slight amendment of the Act of 1941 to enable levies to be imposed on stocks of imported butter held by creameries. The Act already provides for similar levies on butter of all kinds held by butter traders and on stocks of creamery butter held by creameries but it omits to cover imported butter held by creameries. The necessary amendment of the Act is contained in Section 3 of the Bill.