Seanad Éireann debate -
Wednesday, 19 Dec 1962

Vol. 55 No. 19

Message from Dáil. - Sugar Manufacture (Amendment) Bill, 1962: Second and Subsequent Stages.

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

Minister for Finance (Dr. Ryan)

The main purpose of this Bill is to support and finance the food processing project of Comhlucht Siúicre Éireann, Teoranta.

The Government's Programme for Economic Expansion published in November, 1958, encouraged State-sponsored concerns to extend their activities into projects related to their main spheres of operation and to test the profitability of new lines and new markets. Comhlucht Siúicre Éireann responded with characteristic initiative and started planning their food processing project in 1959. The company now have plants at Mallow, Carlow, Tuam and Thurles and their total investment up to the present in processed food production, including research and development, exceeds £2.3 million. Over 750 persons — including some trainees — are employed at the various plants. Some 120 other employees of Comhlucht Siúicre Éireann are supplying services to the food division and about 250 workers are engaged in building and construction.

The project is essentially aimed at export markets, only a small proportion of total output being retained for the home market. The enthusiasm with which the company embarked on the enterprise is well exemplified in their introduction here of the new method of accelerated freeze drying and also in the new technique developed at their Tuam plant for producing "instant potatoes".

The food processing industry offers to this country a great opportunity of establishing itself in an expanding external market. We start off with valuable advantages as regards soil, climate and labour force. Demand for these foods is growing — and is likely to continue to grow — because of the improving standards of living and the increasing attraction of foods which can be prepared for the table quickly and with the minimum of labour. The rewards for success in this field are very great. The processing plants provide substantial direct and indirect employment — some of it calling for high technical and professional skills. Over and above that they give the farmer the prospect of an expanding market at guaranteed prices for the raw materials required for processing. A processing plant can, therefore, hardly fail to have a stimulating effect on the economic life of the whole area from which it gets its raw materials. Indeed, if the company's hopes are realised, farmers will have a larger outlet than ever before for horticultural produce at economic guaranteed prices.

Then, of course, the food processing industry makes demands of its own which generate further activity such as the production of various kinds of packing material — boxes, cases, cartons, jute and paper sacks and polythene laminates.

The Government recognise that the opportunities offered by the food processing industry should be grasped as quickly as possible. Competition in export markets is particularly keen and it is therefore of great importance to future expansion that we establish ourselves there as quickly as possible. That brings up immediately the question of finance.

Up to now, Comhlucht Siúicre Éireann have financed their diversified activities without any addition to the share or debenture capital raised in earlier days. Other than the few shares issued to subscribers to the memorandum and articles of association or as qualifying shares to directors, that capital consisted of the 500,000 ordinary shares of £1 each issued to the Minister for Finance and the public issue of 500,000 6 per cent. cumulative preference shares of £1 each. A further £1 million was raised from the public by way of State guaranteed debentures. I should add that a bonus issue of shares was made in 1961 to bring the nominal value of the ordinary shares rather nearer their real value. This bonus issue brought the issued ordinary share capital to £1.5 million and the total issued share capital, preference and ordinary, up to the limit of £2 million permitted by the Sugar Manufacture Act, 1933. The bonus issue did not, of course, increase the money actually invested in the company.

The company now consider that the adequate future development of food processing will be beyond their available resources. Indeed some of the temporarily free funds which the company invested in food processing may be required on the sugar manufacturing side of the business for certain developments which involve capital outlay.

The Government have considered the outline of developments which the company deem necessary in order to exploit the potential of the food processing project and they have taken note of the directors' views that despite the keen competition which exists in this field the enterprise will pay its way. The Government are satisfied that Exchequer assistance should be made available for the adequate further development of the project. The Government feel too that the importance of the enterprise calls for the setting up of a separate company which, while very closely associated with Comhlucht Siúicre Éireann, should concentrate on food processing. Comhlucht Siúicre Éireann have this aspect of the matter in hands.

As regards the Bill itself, its main provisions may be summarised as follows:—

(i) it permits an increase of the authorised share capital of Comhlucht Siúicre Éireann from £2 million to £5 million;

(ii) it empowers the Minister for Finance to acquire shares, by subscription or by purchase, to the total amount of £3.5 million in Comhlucht Siúicre Éireann and/or in an "approved subsidiary company", that is to say, in the proposed new food processing company. The 1933 Act limited to £500,000, nominal value, the amount of shares the Minister might acquire by subscription in Comhlucht Siúicre Éireann, and the Bill will, therefore, enable a further £3 million to be invested by way of share capital in Comhlucht Siúicre Éireann or the new food company;

(iii) it empowers the Minister for Finance to make repayable advances to the parent company or to an approved subsidiary company and to guarantee borrowings by either body, provided that the aggregate of the principal guaranteed and of the advances made does not at any one time exceed £5 million;

(iv) it will relax the provisions of the Industrial and Provident Societies Act, 1893, in favour of an approved subsidiary company so as to facilitate association by such a company with local co-operative societies engaged in food production or food processing where this might be economically justifiable and in the national interest;

(v) it provides that the same provisions regarding submission of accounts and presentation of accounts to each House of the Oireachtas shall apply to an approved subsidiary company as already apply to Comhlucht Siúicre Éireann, and

(vi) it requires the previous approval of the Minister for Finance — given after consultation with the Ministers for Agriculture and Industry and Commerce — before any alteration can be made in the memorandum or articles of association of an approved subsidiary company.

There are also some consequential provisions and modifications of existing law.

The Bill has been drawn so as to provide within the stated limits the maximum flexibility as regards the financing of the food project. It will be possible for investment to be made either directly in the new food company or indirectly through Comhlucht Siúicre Éireann, or by a combination of these methods. Under the Bill, Comhlucht Siúicre Éireann might also be put in funds to finance expansion and improvement of the sugar factories, should this be found necessary.

The provisions regarding Exchequer assistance are, of course, enabling ones and do not at all preclude the raising of capital elsewhere, should this prove practicable. Indeed, so far as working capital is concerned, it would be my hope that the company, backed if need be by State guarantee, would be able to obtain considerable funds from the banks and other financial institutions.

I would expect the present Bill to cover requirements for some years ahead. If the project prospers in the way we hope it will, the provision of additional funds from the Exchequer may well be necessary if the full potentialities of the project are to be realised. In that case, a further Bill will be brought before the Oireachtas. Although the Bill makes provision for only a relatively short period ahead, I can, as I said in the Dáil, promise on behalf of the Government and myself that the company may make their plans for expansion in the full confidence that a further request for finance will be sympathetically received and welcomed.

The encouraging prospects which the processed food industry holds for us should not obscure the difficulty of the task that will face the new food company in trying to obtain an adequate share of the very highly competitive export market. The imagination, drive and enthusiasm which has characterised the project so far, however, give us good ground for hoping that these difficulties will be overcome. I recommend the Bill for the approval of the House.

Professor Dooge

I think this Bill will be welcomed by every member of the Seanad, if only for the fact that it enables us to place on record our appreciation of the work which has been done by Comhlucht Siúicre Éireann, and particularly the enterprise which has been shown by that body within the past few years. That organisation could well be a model not only for private industry but for many of our State-supported service organisations.

Comhlucht Siúicre Éireann have used to advantage not only the raw materials of Ireland but they have also used Irish labour to a distinct advantage, through proper training of workers, through co-operation with local vocational schools in the organisation of schemes of training for technicians. By the recruitment and the proper use of Irish graduates in chemistry and engineering, the company have shown that with the proper use of Irish materials and Irish labour, well-trained for the job, enterprises in this country can achieve their objective with as high a degree of efficiency as any of their competitors. Accordingly, it is with great willingness that we assent to the Minister's proposition that this company should be facilitated in their further expansion. However, there is one point I should like to raise in regard to the method of expansion.

The Minister has indicated that he is enabling grants to be made from the Central Fund but that he hopes that the company might finance themselves through the banks, or in other ways, and not have to draw on moneys from the Central Fund. It is a pity, perhaps, that the Bill is not drafted in such a way that the company could finance their own extension in co-operation with Irish investors. Of course, that is a matter of controversy. Some time ago, the Minister mentioned this problem as to whether we might not reach a stage in the development of our State-supported industries, private companies supported out of State funds or subsidiary bodies set up by the State, which having, as it were, grown from small infants which needed the protection of the Department of Finance into good, healthy adolescence, could move further into the atmosphere of private enterprise and private investment.

I wonder if, at times like the present when the question of the proper investment of our capital is a matter of grave concern, Government capital is the proper method of financing such an organisation as Comhlucht Siúicre Éireann who have certainly made their mark in their development and in managing to make advances, initially at any rate, out of their own internal funds. Here is a case where the Minister could well have explored some alternative method of finance. I would ask him to indicate what his attitude is towards bodies such as Comhlucht Siúicre Éireann. I think it would be a very good thing if the small investors in this country were able to form a link with such bodies as Comhlucht Siúicre Éireann which have the confidence of everyone in the country.

It is an extremely good thing that some of the provisions in the Bill make it possible for the company to co-operate with local associations, and particularly with associations of a co-operative nature. The company have done that in the past and it is a good thing that in this Bill any legal bar which might exist to full co-operation has been removed.

The Bill is also welcomed because of the flexibility which it introduces. While there are some objections to subsidiary companies, I think in this case it is probably a good thing in the sense that the additional operations will be carried out by a subsidiary company. It is good from the point of view of management and from the point of view of enterprise. When a company such as this diversifies into another field of interests, it should be self-contained and have a sense of unity as an individual enterprise. For those reasons, this Bill is certainly welcome. There is just the one reservation which I should like to make. Looking at Comhlucht Siúicre Éireann as they are now, I think they have gone beyond the stage when the State should be put in the position of guaranteeing £3½ million out of the £5 million capital to the company.

Mr. Ted O'Sullivan

I, too, should like to welcome this Bill. In doing so, I should like to pay tribute to the sugar company for the wonderful success that has attended their efforts in connection with beet growing, but, like Senator Dooge, I have some reservations with regard to this new effort. However, the sugar company have certainly provided the farmers of three provinces with a lucrative and successful market for beet at home.

It is a very profitable crop at the moment and if their efforts in connection with vegetables are anything near as successful, the farmers will be very pleased indeed. While the beet growing programme has been very successful and lucrative, it has benefited principally the farmers in the better lands. For, I suppose, various reasons, the sugar company are reluctant to give a beet acreage to farmers along the western seaboard and on the western peninsulas of Cork county. Perhaps it is because of distance from the factory; perhaps it is that they do not believe they can grow beet in any quantity to make it worthwhile. I do not know what the principal reasons are but I feel that distance is one, at any rate.

It is very unfair because over the years the farmers, the smallholders, the cottiers and others on the western seaboard and in all the outlying peninsulas are compelled — they have no option—to buy the produce of the good lands. Industrious people who want to rear pigs and poultry require feeding stuffs of one kind or another. They cannot grow them in sufficient quantities and they have no option but to buy the feeding stuffs put on the market from the good lands. In other words, they are paying out all the time. They have not an opportunity of making ready cash out of wheat, barley, beet or any of those lucrative crops which grow on the good land up the country. I think that here is a reasonably good opportunity to help out these industrious people.

I would nearly go so far as to ask the sugar company, in so far as it is possible to do so, to give priority to the smallholdings and the poorer lands along the western seaboard and in the peninsulas. I read recently in the papers of a development in Donegal. According to the prices given, there should be a very good profit on what the people associated with this development are able to produce off an acre or a half an acre of poor land. If 75 per cent. of that return could be obtained in the areas to which I refer, it would be very welcome to them. It would be the first opportunity the people in these areas had of earning something from this new venture of the sugar company.

While it is possibly unreasonable to ask that it should be confined, still I suggest that the organisation should be extended to those areas. The balance should be got from the good land. The people living on the better land had their opportunity over the years, largely at the expense of the people in the areas to which I refer who had to buy the stuff afterwards. It would be only fair that the process should be reversed now. I would appeal to the Minister to use his influence with the sugar company to ensure that the operations under this Bill will be extended to those people. I welcome the Bill and I wish the company every success.

Mr. Murphy

The trade union movement has on many occasions advocated the extension of the activities of semi-State undertakings. I have on occasion made my voice heard on the various debates in the Seanad. Here is the case of a semi-State undertaking showing us, as the Minister termed it, imagination, drive and enthusiasm. I, therefore, very much welcome this Bill. I welcome the drive and enterprise of the sugar company. Indeed, I compliment them on what they are doing and what they have done over the years.

I must say that I have very little sympathy with the point of view that the activities of a public undertaking such as this, having shown enterprise, should in some way be hived off to private enterprise. This is an example of public enterprise, with the emphasis on enterprise. I do not see why when a public company such as this exhibit enterprise, when they might be regarded as being successful or remunerative, they should then in some way be given over to private enterprise.

This is not the case of a semi-State undertaking absorbing activities previously conducted by private firms, private individuals or private enterprise. This field has been there all the time to be worked: this market has always been available. The land has always been available but private enterprise has not been prepared to take the risk or has not had the vision to see what could be done. I am glad that the Government have encouraged semi-State undertakings to extend their activities to engaging in enterprise and I compliment the sugar company on showing us this very good example. I have always thought that the management and leadership of the sugar company was very forceful and successful. Being forceful and successful naturally leads to some criticisms, but I do not think we should ever criticise people who are making the best of what is available, using the available talents, creating employment in this country and, like the sugar company, providing a good market and income for farmers, which are so important to the economy.

There is just one note of warning I should like to sound. I hope none of the capital which is being granted under this Bill will be utilised to build up more transport when the necessary haulage could be more usefully be performed by the nationalised public transport undertaking. I feel that, especially with semi-State undertakings, there should be mutual co-operation, use of one another's facilities, and that there should not be duplication, especially in the matter of transport where we have a semi-State undertaking and have had up to now to subsidise that undertaking.

I particularly noted the reference to the possibility of a subsidiary company being set up to develop further the food processing now engaged in by the sugar company. Quite frankly, I cannot see the need for such a subsidiary company. Listening to the Minister, I certainly got the very definite impression that this was an idea favoured by the Government but not suggested by the sugar company. It does not seem to be the idea of Comhlucht Siúicre Éireann. They do not seem to want a subsidiary company. I do not know whether or not they consider it desirable. I certainly got the impression, as I have said, that it is rather an idea of the Government and certainly not an idea of the sugar company who have taken the initiative, who have taken the chance and have done this work in the food processing field.

I shall conclude by again complimenting the company on the good leadership and enterprise they have shown over the years. I wish them every success in this new field in which they are engaging.

Professor Jessop

I should like very briefly to add my voice to those of the Senators who have commented on the very great satisfaction with which we have observed the progress of this industry over the years.

The Minister said in his concluding sentence that this company is distinguished by imagination, drive and enthusiasm and the previous speaker mentioned these words. I should like to mention them again. Any successful enterprise like this must exhibit drive and enthusiasm but not all of our industries here exhibit very much imagination and it is in that particular quality that this company, as far as my observation is concerned, really outstrips the others—most of the others, anyway.

A Senator has mentioned the fact that this company employs Irish graduates in chemistry and engineering to forward its enterprises. That is an excellent thing and one of the reasons why anybody here, who is interested in the agricultural development of this country, must get considerable satisfaction because this development is being forwarded by our own personnel, people trained in our own schools and universities. The company do more than that, because they help to train these people. They help to train these people by encouraging university departments, not only to degree these graduates in chemistry and engineering, whose relevance to this subject is quite apparent, but also in other subjects — and this is where the quality of imagination comes in, where the relevance is not quite so apparent.

I am thinking of one particular direction, that is, genetics. The company early on realised that there is great need for the study of genetics here and has encouraged the study of genetics by graduates and has graduates trained in this subject who will help to produce proper strains of beet for the greater production of sugar for the country.

I mention this as one of the activities of this company which must have given tremendous encouragement to scientists in universities in this country and, if for no other reason than that, I would warmly support anything which tends to forward the interests of this company.

Éamon Ó Ciosáin

I should like to join with those Senators who have complimented Comhlucht Siúicre Éireann on the great work they have been doing over a number of years. It is right to say that their efforts have made a wonderful contribution to the country's economy.

The main purpose of this Bill is to make more capital available for Comhlucht Siúicre Éireann and anybody who has followed their activities over the years could have no objection whatsoever to that. Whether given through Government channels or raised by the company, money that is made available to Comhlucht Siúicre Éireann is, surely, money well invested. There could not be a much better investment for the people of this country and I am sure that the dividends that will accrue to it will be as good as any dividends that could be got from money invested in any other company, either here or outside the State.

There has been reference to the way in which the share capital is being made available to the company. There has been a suggestion that it would be better for the company itself to raise this money. In my opinion, it makes very little difference how the money is raised. Everyone knows that it is much easier for the Government to raise money than it is for a State body but I am sure that if Comhlucht Siúicre Éireann floated a loan of their own, the money would be readily forthcoming because investors will always follow a good business and will have no hesitation in sinking their money in that business. On the whole, we can claim that our State bodies have rendered a good account of themselves.

Senator O'Sullivan raised a point in which I am also interested, that is, the question of the undeveloped areas, as I would call them, and small farmers living in those places who, as everyone knows, find it very difficult to eke out an existence. It is true to say that they have not benefited very much from the policy of Comhlucht Siúicre Éireann. Of course nobody can blame the company for that because it is only natural that the company should concentrate on those parts of the country where the soil is suitable for the growing of beet and none of us would dream of curtailing their activities in those parts of the country. It is their duty to grow large quantities of beet and therefore, in order to get good quality beet, they must concentrate on places where the soil is suitable.

Because the establishment of a subsidiary company is envisaged in this Bill, now is the time for Comhlucht Siúicre Éireann to turn their attention to the undeveloped areas. I am aware that the managing director of the company has already gone to those areas and has consulted the people. He has held meetings with a view to organising the small farmers to participate in a scheme. I do not yet know exactly how the scheme will work but I believe there will be a liaison between the company and the small farmers in the undeveloped areas with a view to getting them into a scheme by which it will be possible for them to work their holdings much more profitably for themselves and for the nation than up to now.

The difficulty with those small farmers up to now was that they did not have the necessary capital to work their land. Now the company will be in a position to utilise capital made available under this Bill to seek the co-operation of the people along the western seaboard and other undeveloped areas to grow vegetables and so on and also, perhaps, to establish food processing plants in or near those areas. I am aware that a certain amount has been done already and I know a part of the country where a co-operative movement has been set on foot with a view to organising the farmers so that they can utilise their land to the best advantage.

As a result of that, those small farmers have been able to grow early potatoes and put them on the Dublin market in competition with County Dublin potato growers. That is an instance of what can be done on those small holdings when the people are properly organised and have the proper financial backing. Apart entirely from the question of beet — we all know that the primary function of Comhlucht Siúicre Éireann is to have beet grown for processing into sugar — now, when there is to be a subsidiary company, is the time when Comhlucht Siúicre Éireann should turn their attention to the areas I have mentioned.

I do not know if I can agree with Senator Murphy that there is no need for a subsidiary company. I think there is, because the type of activity I have mentioned and to which Senator O'Sullivan referred would not have very much to do with the growing of beet, the purpose for which the company was formed the very first day. Having said those few words, I conclude by complimenting the sugar company on the great work they have done and are doing for the nation. I think, given the proper encouragement, and having adequate funds at their disposal, we can look forward to greater and better efforts on their part in the future.

Mr. Fitzpatrick

I should like to join in the unanimous welcome to this Bill and in the unanimous congratulations to the Irish Sugar Company. This industry was, I think, the first set up by the new Irish State here nearly 40 years ago and its history has been a success story down the years. It has gone from success to success and certainly merits the best thanks and the best congratulations of this House and of the country as a whole. It is gratifying to see that the company have not yet reached the peak of their services to the Irish nation and that they are contemplating branching out into other fields of activity, such as food processing.

I should like to endorse the appeal made by Senator O'Sullivan and by Senator Ó Ciosáin to the company to spread out into the undeveloped areas of this country. They spoke of the western seaboard. I speak of counties such as Cavan, Monaghan, Leitrim and similar areas. They are counties which are called on year after year, almost, to rally to the assistance of the wheat farmers when they are in danger of heavy losses due to bad seasons. These counties gain nothing from the wheat industry. Down through the years, when the sugar industry needed assistance, in the years of its youth, the taxpayers of Cavan, Leitrim, Monaghan and other such counties had to pay their share and they did not begrudge it.

I agree that these counties are probably not suitable for growing wheat or beet but they have contributed generously to both. The new field of activity into which the company are about to enter is that of vegetable growing and the counties of which I have spoken are very suitable for vegetable production. They are counties with very few industries. The farmers there have always done their best to earn a decent living but they have no cash crops such as wheat, barley or beet. I therefore join very strongly in the appeal to the sugar company to set up their processing plants in counties of the type I have mentioned. On that note, I again welcome the Bill and congratulate the company.

Mr. McDonald

I too should like to welcome the Bill. I feel that money should readily be provided for any industrial concern that uses 100 per cent. native raw material. I think it is true that food processing, as carried on by Comhlucht Siúicre Éireann, is very much in the experimental stage as yet, but it is regrettable that so many risks associated with the experiments are left more or less to the farming community. I think the company could be a little more generous and give better prices, especially for the crops which are more delicate and more difficult to produce. The company should realise that when farmers undertake horticultural husbandry, they are working completely in the dark and themselves experimenting. It requires new techniques and they sometimes have to go to a great deal of expense. The prices the company have been paying over the past few years have not been sufficient to compensate farmers for the extra time, work and worry which these crops entail.

Last year, the sugar company began to sell dried beet pulp in ten-stone jute sacks. Heretofore it was sold in eight-stone sacks. I presume it is easier for the factory to handle the ten-stone sack but it is very bulky and difficult for the farmers, who in many cases have no help. It is very hard work for one man to load and unload these sacks alone. The farmers should have the option of buying in half-cwt. sacks. I should be glad if the Minister would bring this small point to the notice of the company. I welcome the Bill.

Seán Ó Donnabháin

It is right that the members of this House should avail of the opportunity to congratulate Comhlucht Siúicre Éireann on the signal success they have achieved up to the present. When I was a youngster, we thought beet could not be grown in this country. The effect of the work of Comhlucht Siúicre Éireann, so far, has been to prove to the world that we can grow and process beet and produce sugar better than any country in the world, practically. To my mind, accelerated freeze drying is a tremendous step forward in the processing and preservation of several articles of food. We have seen them at the Spring Show, products other than vegetable products. I have seen meat treated under these conditions as well as other foodstuffs. At present, we are only at the beginning of a tremendous advance in what Comhlucht Siúicre Éireann have initiated and I understand we are the first in the world commercially to process goods by this system.

Not only is that a tribute to Comhlucht Siúicre Éireann but it is a tribute also to the agricultural outlook of the country. In a previous debate, when the House was discussing the stamping and testing of fresh eggs, I suggested that in a few years the housewives would be buying eggs in packets. I think that is feasible and other items of food can be sold under circumstances similar to those in which these other products are being sold now. I have experience of two, with one of which I was delighted. I cannot say I was fascinated with the other. The peas produced by the AFD system are sold in packets in the city at present and are an outstanding product of the company. Potatoes have been similarly processed but they do not appeal to me so much, as I prefer to have the potato in its jacket. But I can picture what an immense opportunity is presented for every individual in the country, taxpayers, farmers big and small, by this breakthrough. That is why I want to commend Comhlucht Siúicre Éireann on this occasion for their success in the past and to express the opinion that we are at the beginning of a fascinating and tremendous future for agricultural produce in this country.

Not only the beet farmers but the farmers of Donegal down to West Cork and right around to Wexford will benefit. You can also go up the east coast, if you wish, but the places I have mentioned are the places about the success of which everybody is at present thinking. We refer to the western seaboard but there are other seaboards with small holdings also.

There is no doubt, as Senator O'Sullivan mentioned, that the success of Comhlucht Siúicre Éireann in beet has been a success for the big farmer. I wonder how this breakthrough will help the small farmer, whether on the seacoast or inland. I have been thinking more on the lines of having co-operative preparation centres rather than co-operative subsidiaries of Comhlucht Siúicre Éireann. A subsidiary factory I fancy, would be a pretty large undertaking but I imagine, in districts like West Cork, an area I know fairly well, and other seaboard districts, by co-operation, producers could have preparation centres where the vegetable and other products would get preparatory treatment and then in smaller, concentrated and possibly cleaner packages, be conveyed to the larger processing centres of Mallow, Thurles, Carlow and possibly Tuam. Otherwise, the districts around Mallow, Thurles and Carlow would have a great advantage over the more distant districts in producing these various vegetables which are apparently quite capable of being processed by the AFD system.

The old system of freezing during the last war was no good but I can now picture that if we had, God forbid, another war these processed products could be transported so easily that under the modern system, our goods, animal or vegetable, could be supplied from one end of the world to the other. We have an immense opportunity to achieve a big success. The success of Comhlucht Siúicre Éireann in the past is the best indication we could have of the success of the new system in the future.

In the West Cork village of Glandore, we can grow violets and send them to the Dublin and foreign markets. When an industry such as that can be carried out on a small scale, I can see all these maritime districts producing vegetables from their sandy soil. That is why I look forward to a great future for the agricultural output from the farmers, especially from the small farmers, in this new venture. At present the sugar company have a number of university graduates employed, not alone chemists or engineers but also agricultural and horticultural graduates. These are carrying out work of an advisory nature and therefore no farmer developing this vegetable growing will be left without adequate professional advice as to his soil and other requirements for the successful growing of the various products. Again, I congratulate Comhlucht Siúicre Éireann on their achievements and I hope that this important breakthrough will be very successful.

Professor Quinlan

I have great pleasure in welcoming this Bill which increases the share capital of Comhlucht Siúicre Éireann from £1,500,000 to £5,000,000. I should like to pay tribute to the work done by the company up to now. It is a well deserved tribute, but in paying it, we should analyse the factors which have contributed to that success and see whether these factors cannot be employed more fully in other companies in their future development. Many have given the outstanding characteristics of Comhlucht Siúicre Éireann as their drive, imagination and enthusiasm but we must go deeper than that. I think their outstanding characteristic is the success they have had in training and taking in technical people and ultimately giving them the responsibility of management.

Practically all of the company's present managers came in as technical people, carried out a technical job— it might have been as junior chemists in a laboratory—and progressed up to the head of the department and then into the actual field of management, becoming works managers, factory managers, and so on. That has been the pattern of development and in paying tribute to the company, we are paying tribute to the ability shown by those men and to the fact that technical people here as much as in other countries were given the opportunity of proving first-class managers. We should remember this lesson and we should reverse the prejudice against technical people in the field of management before it is too late. In fact, in many circles, it is regarded as a handicap to have a technical training and it is thought that technical people should be kept in their own domain and should not be allowed intrude into the sacred field of management. The sugar company have proved the reverse. This is not to claim that all management should be confined to technical people but if we regard the problem of the future as the problem of providing scientific and efficient management for the various industries, then we cannot afford to ignore the great reservoir of management talent that lies undeveloped in our technical personnel. State and semi-State bodies and all others should develop that management potential.

Another lesson to be learned from Comhlucht Siúicre Éireann is their co-operative spirit and we might say that to-day its leader is the best authority we have on the ideals of Sir Horace Plunket and Father Finlay and what they hoped to do through the co-operative movement. We find to-day, even in the format of a State company, the ideals of a co-operative being successfully employed and wedded to the concept of a State company. This reaches out first and foremost to the other partners in this great enterprise, to the farmers who are growing their beet and to their very active Beet Growers' Association, which at all times has worked in close contact and harmony with the management of Comhlucht Siúicre Éireann for the development of the industry. They have not hesitated at any time to use up-to-date methods and labour-saving devices to the mutual advantage of both themselves and the company.

We might say that Comhlucht Siúicre Éireann have the best public relations service in the country and we can attribute the lack of criticism of the company to the success of their public relations spirit and to their fostering of co-operation. Another lesson which we can learn is that the work of this company has not stopped in the factory, taking in the farmers' product and processing it from that on. At a very early stage, especially since the last war and since the present manager, Lieutenant-General Costello, assumed control, they have realised the necessity for a first-class advisory service to help in the growing end and today they have a first-class service manned by agricultural and horticultural graduates. It is a service which is second to none and it has the full confidence of the farming community. They have succeeded in translating the findings of the research laboratory and its recommendations, whether on weed control, plant seeding or land manuring, into actual practice in the field. The company have also had the courage to tackle factors that were apparently outside their domain. On the one hand they have produced the Armour harvester and on the other, they have undertaken the parallel problem of bog development which would seem to be outside the scope of the company as first constituted, but is certainly not outside the scope of a management with the imagination and energy that Comhlucht Siúicre Éireann have shown.

We hope that all these factors will carry over, as I know they will, to the new venture in food processing, which is far bigger that the initial venture of sugar processing. Much more depends on it, because it has been calculated— and I do not think it is an underestimate—that in five years this could reach the dimensions of an industry worth £100,000,000, so a great deal is at stake. We should realise that the much publicised accelerated freeze-drying process, known as AFD, is only one minor aspect of food processing, and while the company are to be congratulated on their energy in tackling it, we should sound a note of caution that it is still rather in the experimental stage, at least on the economic side.

Undoubtedly the process is all right, but it has still to be proved that it is really economic and will be able to compete against other processes. We should have full confidence in the company that they will be able to change processes, if necessary, and go forward with the whole problem of food processing, but we should be careful not to expect too much from one process alone.

The sugar company have also shown their co-operative spirit in their approach to all the university centres. At one time or other, they have worked with all centres. Naturally I am proud that the pioneer work in beet costing was done by a member of our dairy science faculty, Professor Murphy, of Cork. He provided a steady basis for regulating the price of beet between the farmers and the factories ever since the survey was carried out in 1947. That is a record in industrial relations, that the formula and adjustments have been accepted by both sides ever since.

We are providing here up to a maximum of £3½ million of State money. This is share capital, so it may be remunerated or not, depending on how the company are doing. If it is not remunerated, that is a certain subsidy by everybody to the company and consequently those who are a great distance from the factories are contributing to that subsidy just as those who are close to them. But those who are close to the factories are placed in a preferential position, having such a short delivery distance. There is therefore, in justice, a case that people 50 to 60 miles or more away should not be precluded by distance from their share of the developing market in vegetable production. In other words, if needs be, a subsidy should be paid to equalise delivery costs of the raw materials to the factories. Otherwise, the people outside the region, having contributed as taxpayers, will yet be unable because of their physical location to partake of the advantages of this development. Very serious consideration should be given to that by the Minister if the need should arise. I would suggest to the Beet Growers' Association and the sugar company and other organisations that may be developed that they should keep that principle in mind, and not be hesitant in seeing that travel or delivery charges are levelled out, if necessary, by a certain element of State subsidy.

I should like to feel that this company in their accounts would refrain from the more glamorous type of accounts which we are treated to very much by our State companies, of focussing all attention on what is called a working surplus, with the papers then blazing forth that the company have been making so much in a year, the working surplus having been arrived at sometimes without any and often with little payment on shares—in other words, remuneration of the capital involved. It would be far better if all State capital given to those companies had to be remunerated at the rate prevailing at the time, and then the accounts balanced up, with the State returning portion of its share dividend by way of subsidy to the company, if necessary. Let us not present accounts that do not convey a true picture of the industries.

We should, also, in paying tribute to those companies, realise that they are in no way in competition with private enterprise. They play a different role in our economy. For one thing, they are monopolies and have not got that competition from within which private enterprise must face. On the other dividends on shares, if the workings do not justify a dividend, whereas if private companies forego payments on shares for any length of time, they know what will happen in the future. We should give credit where it is due to the two sectors, and when we come to speak of the State sector, we should seek to analyse the reasons for success, as I have tried to do in the case of Comhlucht Siúicre Éireann, and apply those to our other developments. If we do that, we will make the maximum use of our talent here, and develop a unique version of Plunket's ideal of co-operation emanating from a State body, and in that way will create a solid structure capable of withstanding competition in the times that lie ahead.

Mr. Mooney

I wish to join in congratulating Comhlucht Siúicre Éireann on the success they have achieved. With Senator Fitzpatrick and other Senators, I should like to plead for extension of the company's activities to counties such as my own. There has been mention of the western seaboard, and I take it that the people who mentioned it include a county such as Leitrim, because we have a coastline of about three miles between Donegal and Sligo. We are therefore a maritime county and are very proud of it.

Comhlucht Siúicre Éireann could indirectly be of some benefit in the initial stages to counties such as Leitrim. From the point of view of the development of the potato processing industry, Leitrim is ideal. We had an excellent reputation for potato growing, but, like many other products that come from the land, our people got out of potato growing because of the lack of market and unsatisfactory prices. Comhlucht Siúicre Éireann could expand their activities in that sphere into County Leitrim and the counties mentioned by Senator Fitzpatrick. To get over the difficulty of transport I suggest there should be collecting centres to which the farmers could bring their produce for collection by the sugar company.

Another way in which my county, and the adjoining counties of Sligo and Roscommon, could be helped is by the use of our native fuel industry. The sugar company established a precedent in regard to that in Tuam. That factory was adapted for the burning of native coal, particularly Arigna coal. Arigna stretches into the three counties I have mentioned. The sugar company could do a good deal to help that particular industry. I do not know what the position is at the moment, but there was a time when they were using Arigna coal.

Mr. Lahiffe

They are using honest-to-God turf.

Mr. Mooney

I have no objection to turf. I hope they are not using oil. I ask the Minister to make representations to the company in relation to the use of the native product. Vegetable culture is apparently the coming thing. One of the problems— it may be outside the scope of this particular measure—in this particular line of business is the absence of horticultural advisers and instructors. That is a problem facing most counties which are prepared to cash in in this development. We know there is difficulty in getting such instructors and advisers, but the services of these people will be vital in counties where this development will take place.

In the event of a local development association, or group, successfully inducing a foreign firm to come in here, and develop on the same basis as the sugar company, I should like the Minister to assure the House that there will be no snags placed in the way of such a company and that one company will not be given a monopoly. There would be the advantage in the foreign industry coming in that they would already have established markets. It is possible some industries might be attracted here when we enter the Common Market.

Finally, as a nation, we need suffer no lack of confidence in entering the Community when we have such companies as Comhlucht Siúicre Éireann. Any who have felt we are neither prepared nor equipped to take our place in the Community can no longer entertain any doubts when they examine the record of Comhlucht Siúicre Éireann.

Mr. Desmond

Everybody welcomes the efforts of the sugar company to further expand along their present lines. Having made a success of the beet processing industry, they are now going into food processing. It is only companies like Comhlucht Siúicre Éireann that have the vision and the courage to expand. I hope that any financial assistance required will be by way of issue direct from the Exchequer. I do not think private enterprise would be prepared to take the risks the sugar company are taking. Quite a number, if not all, State-sponsored bodies are gradually expanding because they have the vision and courage to move forward when others might be hesitant.

This development will mean a great deal to rural Ireland because it will give an opportunity to those whose land was not suitable for the cultivation of beet. They will certainly benefit in the long run. Any money advanced by the Minister for this project will be money well invested.

Dr. Ryan

There is not very much I need say since there appears to be general agreement that the Bill is welcome. Certainly no one suggested that we are not proceeding along the right lines. There are, however, some comments I should like to make on some of the speeches. Senator Dooge said the company have been giving very good employment. He stressed the work done in the training of technicians, some of whom reached the top at management level. It may be possible that these technicians, too, may be availed of in other industries where their services might be required.

Senator Dooge also made the point that it is a pity we are not encouraging private investors. The Bill does not preclude the private investor. As a matter of fact, it was agreed, in talks I had with the Board, that the producers in particular should be encouraged to supply some of the capital. They were just as enthusiastic about that as I was. A drive will, I think, be made. Some of the producers will be asked to take a further interest by supplying part of the finances required, but not immediately. There is a certain degree of urgency about putting money in immediately and it would hardly be fair to ask the private investor at this stage to put money into a project which is comparatively new in this country and in which a certain amount of risk is involved. I think that risk should be taken by the State.

The point made by Senator O'Sullivan was endorsed by Senator Ó Ciosáin, Senator Fitzpatrick and others. Senator O'Sullivan said that we should try to give a bias in this development to the ultimate advantage of the farmer with the poorer land. I think that will be the result of this project. It may be true, as these Senators pointed out, that in the beet business the farmer with the good land, whether big or small, got the greater benefit from the company because he could produce a bigger crop. Especially as beet came to be somewhat mechanised, the crop suited the bigger farmer. With the growing of fruit and vegetables, there will be a certain amount of manual labour. A great deal of personal attention will be required. There, I think, the small farmer will have the advantage. He will be in a position to supply his labour and to give his attention to the production of these specialised fruits and vegetables.

Senator Quinlan spoke about the far away farmers and said they would have to pay for it. The way this is being organised will, I think, help farmers all over. So far, to a great extent, the sugar company have been relying on co-operatives. They are encouraging the formation of co-operative societies far away, perhaps, from the central factory. For instance, they have been organising co-operatives in the Killorglin district of North Kerry, in West Cork and in East Cork. The idea is to do the early processing in these co-operative concerns. Probably they will only collect for the first year or two but the idea is eventually to do some processing.

In the fruit and vegetables they collect, there is 80 or 90 per cent of water. It would be a very economic way of doing things to leave two-thirds of that water behind them by having the early processing done locally by the co-operative society and then send the partially-dried product to the central factory for dry processing. I believe that will be possible in certain cases —perhaps not in all cases. I do not want to go too much into the technical aspect of the matter as I am not competent to do so. I mention it to assure Senators that farmers far away from the central factory may be in an equally favourable position to produce fruit and vegetables for this project with those close at hand.

To come back to the idea put forward by Senator O'Sullivan and supported by many other Senators, in 1933, when the factories were set up, the Government at that time attempted to give the same benefit to the farmers in the west as they were giving to those in the south and in the east— Carlow in the east and Mallow in the south.

Mr. L'Estrange

It succeeded fairly well, did it not?

Dr. Ryan

They endeavoured to give the same facility to the farmers in the west but unfortunately the farmers in Connacht were not able to supply the Tuam factory and nearly every year beet had to be brought from Leinster. I am not saying that by way of finding fault. I say it to give the sugar company and the Government of the time credit for trying to give these farmers the same facilities. I think they will be able to benefit better now by the fruit and vegetables they will be asked to supply in the time to come.

For instance, the factory set up in Tuam for the production of instant potato will take a very big quantity of potatoes from the west. So far, they have not got enough. It is hoped the farmers of the west will supply very much bigger quantities of potatoes as the years go on. It will probably be of more benefit to the farmers of the west than beet growing is at present.

I cannot very well say much about the utilisation of this capital. I have a fair idea of what the capital is required for. In the first place, as I mentioned in introducing the Bill, the sugar company have already advanced about £2.3 million for the development of this food, fruit and vegetable project. It will therefore be necessary to supply that amount of capital straight away to the new subsidiary company. Whether it is done through the sugar company or directly is a matter to be decided in discussions with the sugar company.

The sugar company will probably want more capital also. They are looking to their own industry. They have to prepare for competition with the rest of Europe is case we all go into the same common market. They will have to extend and renew their factories and will need capital for that purpose. Apart from that, after very careful consideration, it was calculated that we might want about £3½ million for fixed capital and about £5 million for what might be regarded as working capital. It is expected that that provision will last for at least two or three years. If the new food, vegetable and fruit processing meets with phenomenal success, we might have to come back for more money within two years but I think it will probably last for two or three years.

One Senator thought the sugar company were not giving as good prices as they might. He thought they should be more generous in their prices. As far as I can judge, if we go into the Common Market, I think the sugar company should rather direct their attention to trying to enable the farmer to make a profit on the present prices. It would be a more useful and a surer way of conferring a benefit on the farmer than raising the price.

This accelerated freeze drying, as Senator Quinlan remarked, is evidently a very good process. It is new and was tried in this country for the first time. I think that so far it has not been tried elsewhere. It will be a great addition to the project but, as Senator Quinlan said, it is not everything. Other processes will have to be tried too. Probably it will not be possible to carry out the whole business under that system or it may not be profitable to carry out the whole business under that system. It is too soon to talk about these things yet because they are largely experimental but it certainly is not experimental in the quality of the goods being produced, which is first-class.

Senator Quinlan talked of the outstanding characteristics of the Irish Sugar Company, to which I have already referred, in developing the high technical training of men who come to the top there. He talked also of building on the co-operative basis. I quite agree that the sugar company, in building up this food, vegetable and fruit industry, have been relying on the co-operative idea. They appear to have approached it in a very successful way by getting the co-operatives built up as primary units for production and, I hope, also as primary units in processing as time goes on.

Senator Quinlan put a rather difficult problem before me when he said that all capital invested in State companies should be required to pay an ordinary dividend. That would not meet with the requirements, because, as I said already, State companies are usually set up for some purpose which would be too risky for private capital. When we started the production of peat, private capital would not take it on. The State took it on and eventually it was successful. It started paying dividends and has paid an ordinary dividend on the capital for some time. It was the same with the sugar company; it has also been paying a dividend on its capital. There are others that are not paying dividends but that is inevitable. If the State is asked to take on all the doubtful propositions, it is almost inevitable that some of them will not pay for a long time, if they pay at all.

I can assure Senator Quinlan there is no danger that any State company will be asked to compete with private enterprise. As a matter of fact, usually there is no private enterprise where a State company is set up. If there were any danger of such competition, that would have to be looked into and private enterprise would have to be guarded. I might also say on that matter, in answer to Senator Mooney, that if by any chance a group, say, in Leitrim or elsewhere got in touch with a foreign group who wanted to come into this business of processing vegetables and fruit, there would be no objection to that.

Senator Desmond spoke of the good work the State companies are doing and of the risks they are prepared to take which private enterprise will not take. That is the reason they were set up, because private enterprise would not undertake them, because there were too many imponderables involved. The project might be successful and it might not. It is therefore necessary to set up a State company to try the matter out and, if the State company is successful, in all probability, there will be many other companies started by private enterprise. If that is the case, there will be no claim as far as the State companies are concerned that they have a monopoly or that they should be left the field they have developed. The reason they are developing that field is to see whether it is good business or not. If they prove it is good business, we shall be very glad to see private enterprise coming along.

Question put and agreed to.

Agreed to take remaining Stages today.

Bill considered in Committee.

Section 1 agreed to.

SECTION 2.

Question proposed: "That Section 2 stand part of the Bill."

Professor Dooge

I should like to thank the Minister for the assurance he gave in his reply on Second Stage that nothing in the Bill will preclude the private investor from playing as full a part as he would be willing to play in the expansion of this company. He did mention perhaps that this might not occur in the very beginning but it would occur afterwards. This is very desirable because there is a great difference between an investor investing directly in the sugar company and investing in a national loan, a portion of which the Minister then gives to the company. I think this sense of identity and taking a thing in one step instead of two is very desirable.

It is also praiseworthy that both the directors of Comhlucht Siúicre Éireann and the Minister had the idea of associating the company with the producers in this matter. One of the reasons why this company has worked is the sense of identity which has been built up between the growers-suppliers and the company. If this sense of identity is further cemented by means of an investment in the company's operations, again we shall be coming closer to the co-operative ideal and at the same time towards highly competitive efficiency.

Mr. O'Reilly

It is desirable that this company should as far as possible, and as soon as possible, entice private investment directly into the undertaking envisaged in this measure. While it is a good thing to see the progress that has been made and the planning for the future on the part of Comhlucht Siúicre Éireann, the amount of private capital attracted is not sufficient to create an investment-mindedness as regards the larger, worth-while industries in this country. That is a pity.

The Minister said that State companies are used to undertake only projects which private enterprise, because of the great risk element involved, would not normally undertake. I do not fully agree with the Minister in that. I would not take the view that there was a very high risk element in investing in Comhlucht Siúicre Éireann now or in the past or that there would be a very high risk element in investing in the ESB. The real reason is that unfortunately we have not in our private sector, the investment-mindedness necessary for the development of a company or corporation of the size of Comhlucht Siúicre Éireann, the ESB or Bord na Móna.

An Leas-Chathaoirleach

The Senator is going well outside the scope of the section. He is making a Second Reading speech.

Mr. O Reilly

I shall obey your ruling and relate my remarks directly to the section which enables £3½ million to be given to the company. The one risk there is in this is that because bigger undertakings are financed almost always out of public capital, one would be inclined to ask how far it syphons off savings or money available for investment, thus leaving scarce money available for investment in private undertakings. That is very arguable. There is the fact that capital has not, to use Senator Quinlan's phrase, to be remunerated; in other words, dividends do not necessarily have to be paid, despite the fact that the undertaking may be very successful. In the private sector, the success of the undertaking would be judged by its ability within reasonable limits to remunerate the capital invested. That is an added reason why the Minister should encourage investment-mindedness in our people. Some people may say it is lack of technology, but our great drawback is lack of investment-mindedness. That creates the position that private people invest in large undertakings outside this country rather than in undertakings such as Comhlucht Siúicre Éireann. The Minister should create a position as soon as possible in which private capital will be attracted towards the development of such undertakings.

Dr. Ryan

I do not think it would be appropriate to go into the whole question of capital here. It must be remembered that the early sugar company was financed by private capital and was not a great success. Then it was taken over and bought out in 1933 by Comhlucht Siúicre Éireann, a State company. I agree with Senators to a great extent that we should, as soon as it is feasible, try to get private capital to come in, take over the capital we have in it and let us have our money for something else.

Mr. Moloney

Is the decision to raise the capital ceiling to £5 million partly due to development regarding the processing of food and fruit and, if so, will part of this increased contribution be made available for projects either by the sugar company themselves or by approved subsidiaries?

Dr. Ryan

Yes; it is for that purpose.

Question put and agreed to.

Section 3 agreed to.

SECTION 4.

Question proposed: "That Section 4 stand part of the Bill."

Mr. Moloney

I would be grateful if the Minister would clear up one point for me. He has already confirmed that the addition to the capital structure of Comhlucht Siúicre Éireann is partly to facilitate this very laudable project in regard to food and fruit processing. Under Section 4, the Minister has power to make advances to the company or an approved subsidiary. I take it an approved subsidiary will be any company set up with the approval of the sugar company to undertake this processing in an independent fashion and that that company will also be eligible for development grants from Foras Tionscal, the same as any ordinary commercial undertaking, in addition to any assistance they may get from Comhlucht Siúicre Éireann?

Dr. Ryan

It is not usual to give State grants to State companies. This will be a State company. Therefore, I do not think they will get the ordinary State grants. Of course, they will get capital, on which they will probably not pay any dividends for a few years. Anything they borrow will be chargeable as to interest.

Question put and agreed to.

Sections 5 to 12, inclusive, agreed to.

Title agreed to.

Bill reported without amendment; received for final consideration; and passed.