Dairy Produce (Price Stabilisation) (Amendment) Bill, 1956—Second Stage.

Question proposed: "That the Bill be now read a Second Time."

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.

There is a remarkable similarity between this Bill and the Bill with which we have just been dealing. Here, again, we are converting temporary legislation into permanent legislation and we are making future provision for the regulation of a very important industry. Here, again, there is implied a considerable amount of control, direction and subsidisation by the State. I am in favour of all these things, not because I like them, but because they are inevitable. We cannot run the dairying industry, any more than the pig-producing industry, on absolutely uncontrolled lines, because we have found that, over the past 20 years, or more, the only way to preserve that industry is by a certain amount of price control and State backing.

I am sorry Senator L'Estrange is not here. He would probably entertain us by taking us back over the years and dwelling at considerable length on the war years when raw materials were unavailable. He lives in a dream world. He seems to think you can maintain an important industry at full production without essential raw materials, such as fertilisers and machinery and all the other things that are necessary for production.

On many occasions in the past, when dealing with the parent Bill or the principal Act, the Minister gave to the Dáil and to the country at large eloquent and entertaining orations upon the folly of subsidising the export of butter and of controlling and regulating the dairying industry. I am glad he has repented of those follies and that he now comes here to continue legislation which was introduced by another Minister over 20 years ago. It speaks highly, to a certain extent, of the wisdom of the Minister who first introduced the Dairy Produce (Price Stabilisation) Act that his plans and his methods are being endorsed and continued so many years after they were first introduced.

This Bill is absolutely essential for the continuance of the dairying industry. I hope the pig and bacon industry will continue to expand and increase. We know there is a problem of finding a market. At the same time, we know there are no means by which you can secure from an acre of Irish land a greater output on the average than through the production of milk and dairy produce. Dairying gives employment and remuneration to the smaller farmer and to the family working on the farm. I think everyone here will agree that the industry ought to be protected and safeguarded and, in so far as it is possible for the State to do so, supported in matters of market and price.

Dairying is probably the only large branch of agriculture that is organised on a co-operative basis. For that reason, I think everyone hopes that nothing will happen to jeopardise its future. The local co-operative society is a very important institution and its future ought to be made secure.

On the Second Reading of this Bill in the Dáil, the Minister referred to the costings investigations in progress in regard to the price of milk. At that time, his observations were most unwise and mischievous. He accused the farmers representing the milk-producing interests on the Costings Commission of having at that time— the 22nd March—secured the results of the Costings Commission. He accused them of having that information in their possession while they were protesting against the long delay of the costings investigation. I think it is right to say that that accusation was absolutely false. The actual figures, as produced by the Director of the Costings Commission, did not become available to the producer members for a very considerable time afterwards.

It is necessary for the future of the dairying industry that confidence should be restored in the goodwill of the Department and of the Minister towards that industry. The Minister's statement, when he was introducing this Bill in the Dáil, was not calculated to promote that goodwill. He made it clear that he was in some way in collusion with the technical staff of the Costings Commission.

That statement is false and untrue.

Very well. I will read, then, what the Minister said on that occasion and Senators can draw their own conclusions from it. This is reported at column 1121, Volume 155:—

"Mr. Dillon: Deputy Donnchadh O Briain, with the circumspection which has been referred to in the Scripture and has been likened to a cat walking along the top of a wall covered with glass, made reference to the report of the Costings Commission. He reminded me of the turtle inAlice Through the Looking Glass who said: ‘Will you, won't you, will you, won't you, join the dance?’ I am told that the members of the commission got a preliminary report on the 1st March, five days before they staged a march in the city, and believe it or not, I am damned if I can get them to give it to me. I understand by rumour, but this is only unofficial——”

Then there was an exchange of compliments between the Minister and some members of the Opposition.

No, no; Deputy Allen said——

I will read it.

You blooming well will. You did not think I had it.

The report continues:—

"Mr. Allen: Off the record?

Mr. Dillon: Not off the record, I am bound to give the House the best information I have. I cannot get this commission to give me that preliminary report. They have their reasons for withholding it but I think they are treating me a little hardly by not giving me whatever information they have got?

Mr. Allen: What is the rumour?

Mr. Dillon: The rumour is that the preliminary report related only to milk produced for consumption in the Dublin and Cork liquid milk areas.

Donnchadh O Briain: That has been announced by the Government Information Bureau.

Mr. Dillon: Yes. The Deputy need not get cross.

Donnchadh O Briain: I am not getting cross.

Mr. Dillon: I know Deputy Ó Briain will sympathise with me when he thinks of the members of the commission having the report now for close on three weeks and not having told me what is in it though they paraded the town having it in their pockets. The rumour— and let me point out it is no more than a rumour—which has reached me is that they have been advised by their technical directors that the prime cost of the production of one gallon of milk, including labour and raw material, is 1/3d. per gallon."

No; 1/3¾d.

He is right—1/3¾d. The report continues:—

"The farmers' representatives, I understand, claim there ought to be an estimate providing for payment of management and compensation for capital. According to the rumour, I understand that the figures they have in mind are 4½d. for the management of the cow and 4½d. for the recruitment of capital invested in the cow."

I hope I have read sufficient now to show that the Minister indicated to Dáil Eireann at that time that he knew what was going on in the Costings Commission, that he had figures actually from the Costings Commission. Where did he get those figures? Where could he have got them, except from his officials on the Costings Commission? If he got those figures from his officials on the Costings Commission, is it not evident that there was collusion between the Minister and the officials of his Department on that commission, that those officials were going behind the backs of the commission and giving the Minister information on the work that they were doing?

That is what I meant by saying that the Minister indicated that he was in collusion with certain officials in the Costings Commission and in that way he deliberately undermined any confidence that anyone could have in the impartiality of that commission or of the technical officers who were employed on that commission. That is the feeling that is widespread now and what the Minister said at that time contributed in a large measure to making it apparent that the Costings Commission was not an impartial body, or, at any rate, that the technical officers of the Department were not allowed to be impartial. Possibly they were under the threat of what might happen to them at the hands of the head of the Department, if they dared to give a decision which would not be in conformity with the Minister's wishes. That is exactly what has happened so far.

I said over six months ago that "long churning makes bad butter." The Costings Commission dragged on for over two years from the time the necessary information was collected. As a result of those long deliberations, we have a report presented by the technical officers of the Department which does not command the confidence of anyone.

I need hardly say, Sir, there is not a scintilla of truth in a word the Senator is saying.

An Leas-Chathaoirleach

In any case, the report of the Costings Commission may not be debated on this Bill.

I agree with you, Sir, but I have been asked to quote what the Minister said when introducing this Bill in the Dáil. The Minister was very insistent that I should quote him at length and if he now says that there was no truth whatever in the statement he made——

No, but in the statement that you made.

——that he made when introducing this Bill——

There is no truth in the statement you made here to-day.

——I will accept that.

Not a scintilla.

Something should be done now by the Minister to restore confidence in the industry. It is quite clear that the Minister, by his action and by his words, has sabotaged to a great extent the operations of the Costings Commission. He can come forward now and meet the producers. If nothing can be done, he should meet the producers direct and come to an agreement with them with regard to the future of the industry. That is probably the best thing to do. No one will accept now the decision of that discredited—those discredited technical officers. I hope the Minister will at a very early date be able to announce an improvement in the price of milk paid to producers. He gave what appeared to be an indication some months ago that an increase would be made in the price of milk as from June last. Nothing more was heard of that. The general feeling amongst farmers was that a small increase in the price of milk was coming at that time. If it was coming, it has not yet arrived. Farmers are fair minded people and if we got a clear indication of policy in regard to the price of milk for the coming year, it would be of immense value.

The creamery industry is expanding and will continue to expand, not only because farmers have available to them increased supplies of raw materials in the form of fertilisers, but because the manufacture of butter on the farms is declining rapidly. I do not know whether there are firm figures available for the output of country butter, but I think it will be found that the output has declined very rapidly over the past couple of years. To a great extent, that decrease is being made up by an increase in creamery butter. Creameries are extending their area of collection far out into areas which formerly were not covered by the creameries. More and more people are coming to depend upon the creamery industry as a source of income on their farms, as a source of supply of by-products. This industry ought to be stabilised and made secure and it is in the power of the Minister to do a good deal towards that end. He should, either, on his own, announce an improvement in the price, or meet the producers and settle definite terms for the future of the industry.

There is one other thing the Minister could do, or should do, under this Bill, that is to promote an increased consumption of dairy produce in this State. I do not think we as a nation are as large consumers of milk as we should be, and there are large sections of the community who do not use as much milk in their homes as they should. I do not know whether the Minister has power to do this, but he certainly has considerable powers under the Bill. He is introducing permanent legislation which will give him very considerable powers in regard to the making of Orders and regulations. I hope, in considering some of those Orders and regulations, he will do whatever is possible to stimulate and encourage the consumption of milk, and that the market will be larger, making us less dependent on the export of our surplus dairy produce. An increased consumption of milk could be offset by a reduction of imported foodstuffs. It could be a good substitute for quite a number of imported goods and I think that would be desirable in the long term interest of the dairy industry.

No. 8 on the Order Paper is not urgent, but No. 7, the Imposition of Duties (Confirmation of Orders) Bill is subject to a date and, if the House would be agreeable, we could sit until 10.30 to finish it.

That is agreeable. It may not be necessary at all.

An Leas-Chathaoirleach

Is it intended to take the motion?

It is intended to take No. 7 which is urgent.

And not No. 8?

An Leas-Chathaoirleach

And not No. 9?

No, unless there is time.

Does cheese come under this Bill?

It could.

Is there any reason why we should not supply the demand for cheese in this country? In the past two years and nine months, we have purchased cheese from abroad to the amount of £159,313. I do not think there was any necessity to do that. There is something surely wrong when we have to do that.

I would like to support Senator Hickey on that. Personally, I am very fond of cheese, but there are only about three or four kinds of cheese here, Cheddar and pasteurised. I happened to be in a town in France some time ago and saw a shop with about 50 different kinds of cheese. The Irish people have neglected the making of a variety of cheeses and the Minister would do a service to the nation if he could encourage us to become more conscious of the various types. There is no type of blue cheese such as Gouda here and if we could make some, we could develop an export trade——

An Leas-Chathaoirleach

A discussion on cheese would not be appropriate on this Bill.

Bhfuil cead agam dul ar aghaidh?

An Leas-Chathaoirleach

The Minister, to continue.

I am respecting the Chairman's admonition not to expound unduly on cheese, but I may say I have urged creameries to diversify their products, and I am not without hope that a further effort on my part may bear fruit in the near future, resulting in the production of cheese of the Danish blue type. I first tried to get that done seven years ago and I could not get a creamery in Ireland to do it. I am not without hope that they will not. I would value the Opinion of the Seanad on this: how far should we go in restricting people's access to a bit of what they fancy, bearing in mind that this is the thing which does them good? If somebody wants a piece of Roquefort, or Gorgonzola or Liederkranz—a variety of cheese with which Senator Hickey and I could not live in the same house, but there are actually people who can get near enough to eat it—are we to forbid it to him?

I do not think that question arises.

All the cheeses Senator Hickey refers to are what are usually known as fancy cheeses.

They are not. They are being imported and why not make them here?

We make some varieties of Cheddar, Cheshire and varieties of Gruyère cheese which are consumed in this country. We do admit Camembert, and a certain amount of Danish Blue cheese and even some of the violent Dutch cheeses. How far should we go in saying to people who have what appears to us somewhat exotic tastes, that they must do with Cheddar and domestic Gruyère? If we have to do that, we will naturally do it before we put restrictions upon other essentials without which other people cannot get along at all. I often wonder are we justified, or is it desirable to say to our own people that you must do without that, though it may be a good thing? If we have to do it, certainly we will.

Can we produce as good cheese here as on the Continent?

If you ask me can we produce cheeses as foul smelling as some produced on the Continent——

I do not mean that.

Some people like it that way. I will send a present of Liederkranz cheese to Senator Hickey and it will run him out of Cork City. He will not like it, but there are people who do.

All the more reason why you should not import it.

It is most healthy and most stimulating on the juices of the stomach. Let us be clear on this. We are manufacturing here at home virtually all the Cheddar, Cheshire and Gruyère cheese consumed in this country and the imports Senator Hickey refers to are certain fancy cheeses. I hope to substitute a domestic cheese of the Danish Blue variety for some of them and one might also hope to export it, too. I am not, however, in the cheesemaking business and all I can do is to exhort the creameries who are in it to undertake it.

The Leas-Chathaoirleach has been liberal in permitting me to go as far as I have. There is not a single scintilla of truth in Senator Cogan's allegations and I deprecate the practice of Senators, or Deputies, in other places, referring to technical officers of my Department and to public servants in that way. I am here to answer for the officers of my Department on the administrative or technical side. The law and custom of this country forbids them doing it. Allegations of anything improper between public servants and myself reflect no credit on the House in which they are made and if Senator Cogan has any complaint to make he can call on me to answer for it in this House. I want to say for the record that there is not a scientilla of truth in all the raiméis that Senator Cogan talked here about the Milk Costings Commission, and the attendant circumstances, which seemed to me to have very little relevance to the Bill, which I commend to the Seanad.

Question put and agreed to.
Committee Stage ordered for Wednesday, 21st November, 1956.